Case Study- Guest Room Telephones, F3TCH, & CAPEX

Summary:


1. F3TCH delivers a touch-less integrated endpoint with Voice, Text & Rich Text capabilities delivered on the guest’s own smart device.

2. F3TCH’s Hotel List Price, for F3TCH Voice, is $5 per room per year.[1]

3. Based on the figures below, the brand standard for guest room communications should be one (1) simple, basic guest room telephone per room complemented by F3TCH. This combination provides the lowest cost, highest functionality solution available today and provides the guest with convenience, higher technology, and a much better user experience.

4. The use of F3TCH to complement a revised brand standard for guest room telephones would potentially save the global brands upwards of millions of dollars in 2021. During this unprecedented time, every significant cost savings opportunity should be realized.



Background


For the purposes of this document, we are using real installations done in the previous 18 months. We are labelling the installation simply by state, in order to keep the analysis focused on the data rather than the brand. The guest room telephone brands sold at this sites will be simply named Brand A & Brand B. The objective of this document is not to single out any hotel brand or guest room brand, but to analyze the effect of introduction F3TCH into the overall solution.


What is F3TCH?


F3TCH is a mobile application for hotels & resorts. In its simplest form, F3TCH replaces the existing guest room telephone by offering the guest the ability to use their own mobile device as their guest room telephone. More importantly, F3TCH is the new solution to interacting with guests at the hotel during their stay. We have two patents that cover our process.


F3TCH’s Price to the hotel is $5.00. / room per year for F3TCH Voice. This includes the digitization of the hotel’s primary data, normally printed onto property “books”, or on other printed material like pop-ups or, due to COVID, with printed QR codes.


F3TCH has been designed to complement, and work with, the hotel brands own mobile applications. We do not do reservations, loyalty points, room keys, etc. Our one job is to ensure guest connectivity and to funnel all brand related activities to the hotel’s own branded mobile app.


F3TCH offers a hotel some very identifiable and distinct advantages. These are:


1. Technologically advanced integrated solution that offers Voice, SMS (Text), and RichText capabilities.

2. Reduction in CAPEX.

3. Reduction in Operating Costs.

4. New avenue to increase “on property” sales.

5. New and much more powerful way to reach your hotel’s checked-in Guests and maximize the Guest Experience.

6. A touch-less solution to help address COVID related concerns.


This study is mostly focused on CAPEX, touching a bit on Operating Costs with relation to printing material at the property.



Case Study Data


F3TCH can replace the guest room telephone, but it is new and that transition to full replacement may be a step too far. As such, we expect the most rational trend, with the deployment of F3TCH, will be the faster adoption of only one guest room telephone per room. We would add that when using F3TCH in the hotel, reducing the type of telephone in the room to the most basic, least expensive model, is the smartest move forward. While the examples in this white paper are new builds or complete retrofits, we estimate, based on our extensive experience with guest room telephony, that at least 10% of the hotels buy new guest room sets every year (once every ten years). It is more accurate to say that sets are replaced every seven years, so the 10% we use is conservative.


For the purposes of this case study, we are using price is $5/room/year. The average sized hotel in the United States (100 rooms) would pay $500 per year for F3TCH Voice.


For this study, we focused on three recent installations at sites across the United States, two of which deployed SIP to the guest room and one that was a retrofit with analog sets in the room. We will refer to these properties as California, Arkansas, and Texas. Here are the specifics for each:



An analysis of the above, confirms our thesis that, with F3TCH deployed, the best strategy is to opt for the lowest priced corded hotel phone, at a rate of one telephone per room. California deployed DECT/ SIP cordless telephones with a second cordless handset. That is a very high offering, giving the guest mobility and convenience. That offering comes at a cost of approximately $178 / room.


Under normal circumstances, a guest will likely ignore the beautiful SIP/ DECT cordless model, as much as they would ignore a more basic set. During these less than normal times, with COVID being a real concern with guests, the guest room telephone has, more than ever, become a glorified and expensive paperweight.


In California, the strategy of least expensive telephone, coupled with the adoption of F3TCH, would have yielded significant savings. Let’s use the Arkansas property, within the same hotel brand family as California, as an example. Arkansas deployed a single line SIP model by Brand A at a cost of approximately $68.16 per room (it is a corded SIP device). Using the Arkansas strategy, the California property would have deployed the same Brand A, corded SIP device, one per room, complemented with F3TCH.


Recall that the goal in California, was to offer the guest mobility and convenience as a “luxury” offering. In fact, the goal of offering mobility and convenience is greatly enhanced with F3TCH, after all you are not using a DECT cordless device, but a Samsung or Apple smartphone as the guest room telephone. Moreover, with regard to mobility, you can use F3TCH anywhere on or off site.


Regardless of manufacturer, or technology used, there is no guest room telephone today, or in years past, that can compete with either Apple or Samsung with regard to capability and technology. In addition, it is the guest’s own smart device, which means that the guest bought the phone, maintains it, ensures its cleanliness, and is familiar with the device’s operation. The concern with regard to COVID is minimized and the legal liability of keeping the device virus free falls to the guest. All of these are “wins” for the hotel.


Just on CAPEX, the Arkansas strategy, if used in California, would have yielded significant savings. We believe the Arkansas strategy when combined with F3TCH should be the new brand strategy across all brands. This is a one telephone, at the least expensive model, deployed with F3TCH. If used in California, this strategy would have offered significant cost reductions, while increasing guest facing technology and user experience:

Some important observations about the strategy above:


1. Saves roughly $105 per room or $64,477 in total.

2. Offers the guest a mobile application that is fully integrated with the hotel and can handle Voice, SMS, and Rich Text. (Texting options are an additional cost but utilize the existing PBX/ PMS infrastructure).

3. F3TCH does not require new systems to handle Text or Rich Text.

4. The amount saved, $64,477, is about what the hotel paid for the entire PBX. Think about that, the guest room telephone, a glorified paperweight, cost about the same as the essential communications platform required by the hotel. This imbalance is nonsensical.


In the case of an analog retrofit, like Texas, the use of F3TCH yields similar, if less dramtic results. The Brand B corded analog set cost the hotel about $38 per set. If you used a less expensive corded analog product, the cost would be about $12 less per set, and if you really went basic model equivalent, that savings could be $15 per set. That would yield a savings of about $3,588 - $4,485 per hotel depending on model. With F3TCH, you could pare down the guest room telephone to the most basic- no speed dial- configurations, and yield better guest satisfaction.


An analysis of one of the major chains showed that they have 487 hotels under construction in North America. Implementing a brand standard with F3TCH will yield a significant savings. For example:


Let us take the Hotel Brand A properties as an example of all SIP installations. An all SIP install makes a lot of sense in new construction, one network versus two (SIP & Analog to the rooms). May as well use SIP devices, as the cost of PoEs will offset the cost of gateways (if analog to the room) and trying to have analog devices running off gateways is more complicated. So there is a cost savings on new builds that makes all SIP installations a good strategy. If you modify the brand standard to allow one SIP corded device only, when complemented by F3TCH, instead of a DECT SIP Cordless then you could expect to yield a cost savings of about $105 / room. That is a savings at those six Hotel Brand A properties of about $202,125 or $33,687 per hotel in CAPEX savings.


Conclusion:


The adoption of F3TCH to complement the guest room telephone for any hotel brand would yield immediate cost savings in addition to providing a touch-less guest interface for guest communications. While we have some basic data on active construction, we do not know the current brand standards for each brand. However, based on the above, utilizing F3TCH in conjunction with the guest room telephone would likely yield a savings of at least $5,000 per property (SIP sites blended with some analog sites). That includes the cost of the first year for F3TCH’s service. At 487 properties under construction, that could mean a savings of $2.44 million dollars. But that is just one factor and one major brand.


According to this hotel brand’s website data, you have just under 7,500 properties with 1,400,693 rooms. That means that about 750 properties (10%) will be refurbishing their guest room telephones this year. That’s 140,096 rooms and if you apply the figures above and allow the most basic set with the use of F3TCH, that could yield at least $15 per room (assuming all are analog) in guest room telephone savings or $2.1 million in additional savings. We agree our numbers are based on assumptions, but we would argue that our premises are sound and that, if you did an analysis, you would find at least $4.5 million in savings at this one brand for just for 2021.


Indeed, after using F3TCH for a few years, it may well be that you could conceivably only offer guest room sets in 10% of your rooms, realizing tens of millions of dollars in savings every year. Not only are the savings significant, your cost reductions are for equipment that has terrible ROI and functionality.


That’s money that can be spent to save jobs as well as revenue generating products and services.


Recommendations:


1. Review brand standards with F3TCH in mind and reduce the number of guest room telephones per room to one set. Presidential Suites, or larger VIP guest rooms, would be exempt from the one telephone set per room rule, but could be reduced significantly.

2. The one telephone per room should be the most basic, least expensive model available that fits the general design of the room. It could be a basic set or even a nice looking trim line set.

3. For hotels that currently have two or more sets per room, take the second set, box it and send it back to the manufacturer for warranty/ repair. You should then receive the sets back in boxes, cleaned and ready to go. Store these sets and use them to replace sets as they go bad in the property. This could avoid having to buy new sets for a very long time and extend the time frame for full refurbishment by a few years.

[1] Offer as of February 2021. Terms could change.

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