The InterContinental Hotel Group plans to upgrade its in-house entertainment systems throughout Asia-Pacific with a digital video-on-demand platform (DVoD) that could net technology provider Entertainment Media and Telecoms (EMT) more than AU$50 million over the next three years.

The planned roll-out--which will serve 40,000 rooms in four and five star hotels--will see the Group's analogue systems replaced by General Dynamics' Intrigue digital multimedia platform, capable of supporting HDTV, video, broadband, and voice- and video-over-IP.

With the multimedia platform, hotel guests will be able to surf the Internet or watch movies on-demand via their in-room television. Each room will also be fitted with an Internet connection for PCs or laptops.

EMT and the hotel chain have yet to finalise details of the contract but it appears likely that the pair will agree on a revenue sharing model in which the former will bare the majority of upfront costs to install the systems. Under such an arrangement, pay all capital costs to install the equipment and collect a share of revenue for services delivered over the platform.

Peter Dykes, EMT's chief executive, estimated that the company could secure minimum revenues of AU$10 million per year over the life of the contract after an initial capital investment of AU$25 million dollars. He said the company's gross revenue projection of AU$1.40 per day for each room the Intrigue system serves was a conservative estimate.

Although he concedes that SARS and the international security climate is currently impacting hotel occupancy rates throughout the region, he's cautiously optimistic that EMT can secure around 20,000 rooms from the Group.

According to Dykes, approximately 12 IHG sites--many in Australia--are currently waiting to take-up the new system. "We anticipate that we would pick-up around 10,000 to 15,000 rooms in the next 12 months," he added.

Dykes said most of the properties that were not contractually obliged to use Intrigue system contracts with incumbent suppliers were nearing expiry and the hospitality group would be recommending EMT's product.

EMT has earmarked movie entertainment, advertising and broadband services as the platform's three most lucrative revenue sources.

Part of the contract will be fulfilled by High Speed Internet Access (HSIA) technology specialist inter-touch. EMT will supply the broadband services through the in-house entertainment system while inter-touch will provide HSIA facilities for computers and hotel conference functions.

According to hospitality technology consultant, Ted Horner, large hoteliers could generate additional revenue advantages by piggy-backing voice, data and video in guest rooms. Horner said these chains could establish inter capital VoIP networks connecting their sites and offer guests local call rates for long distance calls.

"Traditional switches in hotels haven't made money because they've gouged guests," said Horner.

EMT's Dykes said although the General Dynamics system could support VoIP it isn't a cost effective to add it to the system currently.

Rydges Hotels was the first Australia based hotel chain to use the Intrigue system announcing early March it would roll-out the system in 28 hotels throughout its Asia-Pacific operations following a three month trial of the system at Rydges Hotel, Parramatta.

EMT is now preparing a request for tender to find a partner to supply broadband connectivity to its sites.

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