One giant leap: the potential impact of 5G on the hotel industry

The InterContinental Shenzhen in China recently revealed it is to become the world’s first 5G smart hotel, having signed an agreement with telecoms giant Huawei. Promising guests everything from 5G robots to VR rowing machines, could this signal a new dawn in the digital transformation of hotels? Ross Davies reports.

If asked to forecast which country will be the world’s first 5G superpower, most would bet on China.

It stands to reason. Earlier this year, Beijing distributed licenses to its three largest telecoms carriers – Huawei, ZTE and Datang – to roll out the next generation of mobile internet connectivity.

Huawei’s issues aside – Washington has slapped the group with a ban on buying crucial US-built components and software, citing national security concerns – China remains the undoubted frontrunner in the latest leg of the global telecoms technology race.

It is therefore of little surprise that the country is home to the world’s first 5G smart hotel, as part of an agreement signed by InterContinental Shenzhen and Huawei.

Announced in April, the hotel in Shenzhen – a strategically important city in south-eastern China that links Hong Kong to the mainland – becomes the industry’s first end-to-end 5G network.

Guests staying at the InterContinental Shenzhen, a Spanish-inspired luxury business property, can expect to experience a range of 5G applications through both their smartphones and customer-premises equipment (CPE) terminals. These include 5G robots, able to convey guest information, destination guidance and goods delivery; cloud computing terminals; cloud games; films in 4K ultra high-definition; and virtual reality rowing machines.

These recent events in Shenzhen beg the question: is the rest of the global hotel industry set to follow suit anytime soon?

Not so fast: Standardisation issues and low coverage

Not so fast: Standardisa-tion issues and low coverage

The answer is not clear-cut. On the face of it, the benefits of 5G on the guest experience are self-evident: faster download speeds, increased network capacity and lower latencies (the lag between sending a command and receiving a response). But for 5G to become a going concern in the hotel industry, wider issues need to be ironed out first.

These mainly pertain to standardisation and commercial application – not to mention the fact that the network is still unavailable in most parts of the world. 5G only arrived in London in June, while the network is limited solely to a small number of business users and developers in New York.

“Early adopters will be able to maximise their advantage through data analysis.”

However, that’s not to say hotel operators needn’t start planning for a future coverage roll-out, says Peter Gbedemah, a London-based telecoms entrepreneur and computer scientist.

“It’s still early days, but 5G is a fast-evolving area that will offer hospitality operators an opportunity to differentiate from competitors,” he explains. “Early adopters will be able to maximise their advantage through data analysis and trialling the use of 5G across a variety of products and services.”

Creating a brand narrative: 5G could be a platform for augmented reality and VR

Given the increasing feature of Internet of Things within the hospitality space – from hotel loyalty apps to voice interaction and smart thermostats – the incorporation of 5G would appear to make a lot of sense. The majority of today’s hotel guests have come to expect such levels of personalisation and service automation, whether it be in the form of virtual reality or in-room voice assistants.

“Those that can really harness 5G’s use will prosper, creating a brand narrative and experience before guests have even set foot inside the hotel,” says Gbedemah, who founded telecoms service provider Gateway Communications in the late 1990s, before it was acquired by Vodafone Group for $700m in 2008.

“Those that can really harness 5G’s use will prosper.”

“It will be tremendously valuable for establishments that take advantage of this opportunity, distinguishing themselves from the competition and securing the interest and loyalty of their customers.”

“Gone are the days where hotels and room types are chosen from a brochure,” continues Gbedemah. “Augmented reality allows guests the ability to select rooms before they arrive, trialling their features on the website. Soon virtual reality will transport them right inside the room with the option to configure it according to personal preference.”

Building for the future: What can hoteliers do to prepare themselves?

According to tech experts, the leap between current 4G Long Term Evolution (LTE) technology – as found in most hotels – and 5G is seismic. The latter is said to be around 1,000 times faster than the former. For hoteliers, bridging such a technological chasm could require a period of acclimatisation. Practically speaking, is the hotel industry ready for 5G?

“While we’re slowly starting to see the emergence of sites where 5G is available, there still isn’t sufficient infrastructure in place yet to facilitate its full rollout,” says Gbedemah.

“There will come a point where access to 5G will become a necessity.”

“Hotels and other hospitality outlets will need to construct aerials and provide access for telecommunications networks to be installed within their properties. From a design point of view, newer establishments that can incorporate them in the initial construction phase are better off than those having to adapt their infrastructure later down the line.”

Consumers, says Gbedemah, have taken for granted the progression of telecommunications since the turn of the millennium. The marvel of wireless internet access at the hands of 3G -first introduced at the start of the last decade - now feels like another lifetime ago. At some point in the future, it will be 4G that is the distant, quaint memory.

“There will come a point where access to 5G will become a necessity and it’ll be used as a selling point for guests, just as Wi-Fi has,” he says. “This is particularly relevant for remote and high-end locations that can offer 5G as an additional feature that city-dwellers and business travellers have become used to.”

Home is a feeling 

The premium and luxury end of the hotel sector, where Schmidt operates, can act in the same way that Formula 1 influences the wider automotive industry, with ideas intended to satisfy the most demanding customers in the world gradually filtering down to more affordable market segments, from premium hotels to serviced apartments. When it comes to luxury residential trends for ultra-high net worth travellers, the aim is increasingly to blend the best virtues of residential and hotel ambience.

“We’re seeing now this blend of wanting all the mod cons of my private home – I want it to feel like a home and not like a cookie-cutter corporate chain, but I want that home to be open to people like me,” Schmidt says. “So it’s this new thing that is partly behaving like a domestic residence – the scale, the grandeur, the size of rooms, the non-corporate design, more random in a way, more lived-in. And yet they want the sociability, the buzz of the hotel experience to bring some animation into those quasi-domestic spaces.”

Accounting for the human factor and social dynamics in the hotel residential theme is certainly trickier than judging the right curtain material or the perfect sofa set for the lobby, but it can be all-important. ‘Home’ has always been more of a feeling than a structure, and more about people than things. In this way, the residential trend isn’t simply a box that hoteliers must tick – it’s a frustratingly intangible quality that all hotels should try to blend with other design and branding objectives, all in the service of boosting human connections.

“You want them to feel like they’re at home, but you also want them to feel like they’re getting the best service ever.”

“From three-star to five-star, what makes the hotel experience memorable for guests is their exchange with human beings, not technology,” Shaw argues. “You want them to feel like they’re at home, but you also want them to feel like they’re getting the best service ever.”

Striking the right balance between home comforts and the memorable experience that hotels can provide will always be tough, especially as the hospitality industry continues to drill down towards the core of what customers expect. Branding experts like Schmidt are paid to stare into the industry’s crystal ball in search of revelations, but there are no easy answers.

“I think the industry is struggling to find [a balance], and I’ll admit we are too,” Schmidt says. “We’re working on a project where we’re trying to find what this next thing is. I don’t have the answer yet; we’re literally working on it as we speak. We’re trying to find that space where there is exchange, there is dialogue, there is conversation going on between the hotel, the community and the guests, but at the same time the hotel becomes slightly more reclusive, can be less open.”

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Cover image credit: Hilton Hotels and Resorts