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High Def-inn-ition

When black & white TV was the norm in American households, hotels lured customers with color TV. When color TV became widespread, hotels offered cable. Once cable was prevalent, the response was free HBO. And then hotels sweetened the inducements with video-on-demand, while cable struggled to introduce VOD.

“Cable has caught up; the two are at parity,� says Peter Klebanoff, VP of sales and industry relations for LodgeNet Entertainment, a major provider of entertainment and information systems for the lodging industry. “So the hotels are once again looking to deliver an experience that is better than at home.�

And that means high-definition television on a large flat-screen TV.

The technology upgrade is “part of an overall amenity increase in upscale, upper upscale and luxury rooms,� says Kirk Reed, a technology and leisure analyst for PricewaterhouseCoopers. Flat-screen HDTV has two main attractions for hoteliers, Reed says. “It's obviously a nice TV,� he says, but it also eliminates the need for the hulking entertainment-center armoires that dominate so many hotel rooms, a move that “frees up precious space.�

At the annual Hospitality Industry Technology Exposition and Conference (HITEC) gathering in Los Angeles last month, HDTV was a focal point of the show.

LodgeNet's Klebanoff says several of its high-end customers, including the Hard Rock Hotel in Chicago and the Beverly Hilton in Los Angeles, are installing 42-inch plasma screens in their rooms. LodgeNet, which services 5,900 lodging properties and 1 million hotel rooms, hopes to be under contract to deliver HDTV to about 50,000 rooms by the end of the year.

“A complicated cabling process�

But don't expect an industry-wide stampede. Robert Mandelbaum, an analyst for PKF Hospitality Research, says hotels tend to upgrade their room furnishings and technology every four to seven years; he doesn't anticipate flat-screen HDTV to be “everywhere� in the hotel business until a decade from now. And, indeed, the new plasma-screen installations at the Beverly Hilton are just part of a $60 million general refurbishing, according to Michael Robertson, the project's manager.

Robertson says that one brake on the move to HDTV will simply be a matter of logistics: “Hanging a plasma screen on a concrete wall requires a complicated cabling process.� And gone will be the days when a guest, angry over a malfunctioning TV, could be easily placated by quickly swapping it out for another one. “These are far more difficult to maintain and switch if damaged,� Robertson says.

But no matter how tricky they are to install and maintain, not providing them as a hotel amenity simply isn't an option in some quarters: Flat-screen TVs have dropped in price to a point where they are now just symbols of luxury rather than mad extravagance. “As consumers pay more [for hotel rooms], they are expecting to receive more in terms of conveniences and comforts,� says Smedes Rose, an industry analyst for the Calyon investment bank.

LodgeNet will be a prime mover behind the switch to hotel HDTV. The company's service pulls in local HD signals via over-the-air antennas at hotels, while cable networks are delivered via DirecTV. (Over 500,000 LodgeNet rooms rely on DirecTV).

LodgeNet's next-generation efforts revolve around its SigNETure platform. The HDTV service delivers 720-line progressive or 1080-line interlace video along with Dolby Digital 5.1 Surround Sound. A key component of the system is a 128-bit encryption technology (similar to that found in banks), which blasts out six decoding keys per second to make theft nearly impossible. “It's not easy to convince movie studios to give us VOD content that is sometimes still in the movie theater if the system isn't secure,� Klebanoff says.

Simplicity is another important feature. “A president of a major hotel chain told me he wants to make sure that guests won't need four remotes to access content,� says Klebanoff. Guests in rooms with HDTV sets won't have the option of tuning to the analog version of the same channel—a common cause of confused remote-juggling in many homes.

LodgeNet isn't alone in providing HD services for hotels. NXTV, a provider of Internet Protocol-based hotel entertainment services for more than 25,000 high-end rooms, including those in Four Seasons and Le Meridien hotels, has introduced a new HDTV set-top box. The company says it will display HDTV video-on-demand movies as well as other HD content.

James Miles, NXTV president and CEO, says the company will roll out the box this month. Features include the ability to display HDTV content delivered in MPEG-2 or MPEG-4 H.264 (an emerging standard gaining marketplace traction).

Next big thing: movie downloads

LodgeNet is eyeing a new wrinkle in the ongoing race to upgrade hotel-room technology: movie downloads.

The company has reached an agreement with Movielink to make some of the online movie distributor's titles available to guests for downloading onto a laptop. Movies would be downloaded from LodgeNet's on-site digital content server over the local area network (LAN), a service the company calls Entertainment 2GoSM. The thinking is that hotel guests facing a long trip home might be eager to download their own in-flight entertainment. With the movie coming from the hotel's server instead of the Internet, guests would have to wait only 10 minutes for their movie, instead of the hours that an online download often requires.

LodgeNet plans to begin offering this latest techno-amenity within the next few months.

Additional reporting by Rob Biederman