Something for nothing

Hotelier Middle East discovers why Nick Armstrong, general manager of Abc Digital Network, has decided to give his product to hotels for free

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By  Sarah Gain Published  October 11, 2006

|~|Armstrong,-Nick-B.jpg|~|Nick Armstrong.|~|Sometimes the best ideas hit you when you least expect it. Seven years ago, while he was getting changed in a hotel room in Hong Kong, Nick Armstrong was struck with the inspiration for his company, Abc Digital Networks.

“I had the next morning off and I was just chilling in my room, having a shower and getting changed, and I had the TV on in the background,” he explains.

“An advert caught my attention — it was for an excursion on a double decker bus to Stanley Market, just over the hill, on the mainland. And it looked good. I thought, ‘I’m not doing anything tomorrow…’ So I went on the bus.”

During the bus journey, Armstrong started to think about the effectiveness of this piece of marketing. “It’s subliminal marketing, really. The first thing everyone does when they get into a hotel room is turn the TV on and they leave it on in the background. If you’re hungry and you see a nice steak restaurant on the TV, and it’s in the hotel, then you think, ‘That’s where I’m heading next.’”

While interactive TV solutions are taking the global hospitality industry by storm, Armstrong insists his solution offers greater ease of use. “With interactive TV you have to scroll through 18 channels to find the restaurant you want, only to find out it’s on the 2nd floor. A lot of people can’t be bothered to do that. They’d rather just stroll out of the hotel and go to the next restaurant they see, and that’s not good for the hotel.”

With average occupancy rates consistently of over 90%, the real issue for hotels in Dubai is not filling rooms, according to Armstrong, but keeping guests loyal to their food and beverage outlets. “The secret is to keep your guests spending money in your hotel. What we’re trying to do is keep people eating in the hotel and using the hotel facilities, as opposed to going to the hotel down the road,” he says.

“The hotel channel is designed to give the guest a visual impression of the property they’re staying in. We give the hotel its own in-house marketing channel,” he continues. “It’s not a channel you would sit down and watch, like you would watch the news. It’s really designed so the hotel’s own channel comes on by default and is on in the background while the guest unpacks and gets settled in, so the guest learns about the hotel’s facilities.”

Abc Digital Network installs a set-top box in the guest rooms and a decoder in the television splitter room and then programmes the hotel channel as the default channel on each television set, allowing the hotel’s own corporate video footage to be broadcast to every TV on site, in guest rooms and public areas. The company will also install additional screens around the hotel wherever they are needed.

“The LCD screens can be installed in any public area — all we need to do is hook into the hotel’s LAN [local area network]. In the InterContinental in Dubai we’ve put screens above the gentlemen’s urinals in the public bathrooms. That just goes to show, you can put a screen wherever you want,” according to Armstrong.

“I provide this technology, the television screens and the management of the system, free of charge,” he adds. “I’m giving the hotel something for nothing, something that would cost a lot of money if they wanted to do it themselves.”

Indeed, one five-star hotel in central Dubai recently paid AED 180,000 (US $50,000) to a rival company to install and run a similar system on two plasma screen TVs, located either side of the elevators in the lobby, according to Armstrong.

In addition to providing its system for free, Abc Digital will also deploy a team to shoot the required corporate video for hotels that do not already have their own footage. The company can also animate any still photo the hotel wishes to use, and then edit all the material to music and burn it on CD. The hotel is then free to duplicate and distribute the CD in any future marketing efforts.

“We do the filming and editing at a very competitive price. At some of the production houses in Dubai, to do a corporate video for a hotel would cost in the region of AED 100,000 to 200,000 ($27,000 to $55,000). You can expect to pay AED 20-25,000 ($5500 to $6800) for an edited 15-second video of a restaurant or the swimming pool. We’ll provide the video at cost price, around AED 5,000 ($1400) per outlet. Most hotels we can do for about AED 15,000 ($4100),” he adds.

Armstrong is able to charge so little for his filming services, and to offer the hotel channel technology for free, because he makes his money by selling third-party advertising on the channel, targeting excursion companies, tour operators and the government sector. “I don’t want to appear greedy.
There’s too much of that here. I’m hoping to be able to share some of the revenue from the advertising with the hotels themselves in the future.”||**|||~|ickle-screen-B.jpg|~|Abc Digital’s LCD screens are suitable for installation in all public areasm, as well as in hotel guestrooms.|~|“There’s quite a broad selection of companies to target. Before we put any advertisers through to the hotels in our network, we show the hotels the advertisement. We ask whether they have a problem with any particular advertiser. If they don’t want us to put it through, then we don’t.”

Throughout the advertising loop, there are also hourly regional news updates courtesy of AME Info. International news is also updated twice a day to ensure the screen content changes constantly. “By changing the content every hour we’re creating interest so somebody who watches the channel regularly during a four- or five-night stay doesn’t get bored.”
At present, Abc Digital has a portfolio of 20 hotel clients around Dubai, the majority of which are five-star properties.

Although, having been in business for three years, Armstrong admits he is bemused as to why more hotels have not snapped up his solution.

“When I speak to the hotels they all love the product, but they want to know what the catch is. They can’t believe we’re giving them something for free, but there is no catch,” he says. “Maybe if we charged them AED 100,000 ($27,000) they’d be less suspicious…”

Armstrong also believes that the fact the system is provided completely free of charge is also to blame for hotels that already have it installed not fully utilising the solution. “If you give people something for free they don’t really care about it,” he maintains.

Directly after the video of a particular outlet, Abc Digital inserts a still frame showing a ‘promotion of the month’. At the end of the month, all the hotel’s marketing team needs to do is create a PowerPoint presentation, complete with any graphics, for each of its special offers, and send it via e-mail to the Abc Digital team so they can update the slides.

This might seem a fairly simple task, but Armstrong estimates only around 60% of the company’s network actually provides the necessary information. “We can actually update the promotional information as often as the individual hotel wants. Because we use the internet, if a hotel sends us a new promotion through at 10am it will be on every screen in the hotel before 11am. Yet few hotels take advantage of this potential at the moment.”

Abc Digital is in talks with several other hotels in Dubai and Armstrong hopes that by the end of the year the company will have a strong enough network within the emirate to begin to concentrate on moving into other markets.

“Once we’ve established the business share in Dubai, we’ll then emulate the infrastructure in Abu Dhabi, followed by Saudi Arabia, Kuwait and so on. I need to have the technology running in 25-30 hotels and I need the sales team in place here first. Once all that’s happening I’ll then emulate it in other places.”||**||

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