Hotels no heartbreak for EMT

EMT is rolling out General Dynamics' Intrigue digital multimedia system to provide in-room entertainment to up to 140,000 rooms at the UK-owned InterContinental Hotel Group (IHG), up to 5000 at Australian hotel chain Rydges and a potential 917 at Singapore-based group Amara International Hotels & Resorts. The IHG deal alone is potentially worth $50 million over the next three years.

Concurrently, EMT is partnering a high speed internet access firm, Inter-touch, to offer the first offsite support of both computer connectivity and digital entertainment for the hotel industry.

The traditional method of delivering entertainment into a hotel room is via a coaxial cable, using an analog video signal. Going digital means hotels can deliver videos, Internet access, laptop connectivity, games, TV and e-commerce to their guests using one system.

Kelly Sides, chief marketing officer at EMT, said the series of deals consolidates a six-month lead on the company's closest competitor, Maginet. Maginet is the largest provider of hotel video-on-demand services in the Asia-Pacific but is still developing a digital system.

"Maginet is still totally on analog. They are developing in digital but we've got about a six-month jump on them," Sides said. "No one else is delivering these digital services yet so we have a window of opportunity here as there are not really any major players right now."

Another local company, Instant Hollywood, has a digital in-room entertainment system but has so far only installed it in one hotel, he said.

Meanwhile, EMT has announced a partnership with high speed internet access provider inter-touch that, beginning with the IHG deal, will roll out a world-first system of hotel entertainment and computer connectivity support.

inter-touch provides high speed internet access for PCs and conference connectivity, including 24x7 helpdesk support. The EMT partnership will enable Intrigue to be supported the same way. "This partnership enables inclusion of the [Intrigue] digital video-on-demand system as well as the laptop users, and that is unheard of in the industry," Sides said.

"This is the first time it has ever been done and it's huge for the hotel industry. EMT will do it from one support centre in Boston [USA] and one in Sydney that maintains all systems."

He said EMT will use the same network and billing infrastructure as inter-touch, including support for "everything" around TV, video-on-demand, games, TV, internet and e-commerce. Hotels would save money by using the integrated offsite entertainment support system, he said.

inter-touch already has 32,000 rooms in 140 other hotels in 23 countries, so the alliance is EMT's chance to eventually push Intrigue into those hotels as well. "Although we're still finalising the details," Sides said.

He said Australia alone has 40,000 "top-tier" hotel rooms which could eventually install an in-room digital multimedia system but the Asia-Pacific region was growing fastest.

Sides said digital entertainment systems could generate three times the hotel revenue as an analog system due to the additional functionality.

"If you add the benefits of a [high-speed] internet network you can in time add the mini-bar, management or ordering system functionality," he said. "The infrastructure could also eventually provide for VoIP or for energy management. It's huge for hotels."

IHG incorporates InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Holiday Inn, Holiday Inn Express, Staybridge Suites and Priority Club Rewards brands. However, Sides said EMT would be unlikely to implement in all 140,000 hotel rooms.

"Honestly, we won't necessarily be doing all 140 hotels. It's unlikely we'll do Holiday Inn Kathmandu, for example," he said. "I think we'll do 70 this year and over the next 24 months start on phase two, into more niche markets like Taiwan, Japan, Singapore, Hong Kong and then Malaysia as well."

Sides said a January pilot in Rydges Parramatta had concluded in March.

Commercial rollout to the 27 Rydges hotels in Australia and one in Thailand has begun as a result. "Forty percent of their hotels are actually owned by Rydges, so those ones are a slam-dunk. The rest are only managed by Rydges but the very strong recommendation of Rydges Group to the other owners means we could get 100 percent," he said.

Sides said EMT is now in the process of signing its first contract with Singapore's Amara chain, which has hotels in China, Singapore and Vietnam. Initially, Intrigue will be rolled out to Amara Singapore's 380 rooms, but the deal could potentially extend to all three hotels.

"We do focus more on business hotels than resorts. Business travellers spend more time in their rooms, although people even take their laptops to resorts these days," he said.

EMT was signed as one of US company General Dynamics' three global channel partners last year. "We resell technology from General Dynamics, then operate, install, maintain and collect revenue. In our industry we call that an operator," Sides said.

EMT had looked at developing its own digital in-room entertainment system, but chose General Dynamics because it could be more easily globally standardised, he said.

Sides said General Dynamics' Intrigue system, based on a communications application originally developed by the US military, was one of only a few approved by the Hollywood studios for security reasons.

"Normal business software isn't very secure, but a communications network for movies has to be to protect against piracy," Sides said. "Hotel release is just 40-60 days after theatrical release."

ASX-listed EMT changed its name from Tele2000 late last year, in the wake of publicised concerns about the company's viability, including valuation of shares for acquisition and goodwill. The Australian Securities and Investments Commission (ASIC) had placed EMT on a list of companies whose accounting standards were under question.

However, ASIC reported in March that EMT was one of only five companies that subsequently brought their accounting policy into line with ASIC requests and changed their half-yearly financial results to 31 December accordingly.

Sides said the change of name to EMT, which stands for Entertainment Media & Telecoms, reflected the company's diversification into digital entertainment. "Tele2000 was strictly a telecommunications company selling wireless and fixed wire services. We still have those divisions but the focus was to have a digital product to provide to hospitality specifically," he said.

The name change was not related to Tele2000 problems in any way, Sides said.  "The company's been profitable, so definitely not," he said.

EMT then reported net profit of $425,000, up 49 percent on the previous period, for the December half on revenue of $4.89 million.

The company totals 250 staff in its four Australian offices and a single staff member in Singapore.