The need for a new generation of computers, data centers and security equipment for the nation’s hotels is driving up the expense of technology in the hospitality industry, says Mitesh Shah, chief executive officer at Atlanta-based Noble Investment Group, a privately-held company that invests in and manages hotels.

“The average [technology] cost for a 400-room hotel has been about $50,000 a year. That cost is going to go up as the brands start implementing new technology to take the place of systems that have been in place for quite some time,” says Shah. “That cost could be significant. It could be several hundred thousand dollars in additional costs over the next three, four or five years.“

That’s a major investment for a company like Noble, which manages 10,000 hotel rooms at 51 hotels in the U.S. under such brands as Marriott, Hilton, Hyatt and Starwood. The company has recently contracted with 12 new hotels, says Shah.

The upgrades involve both communications that make life more convenient for travelers and the unseen hardware that makes hotels function more smoothly. “A lot of computers were bought in 2006, 2007. We’re looking at a replacement of that. You’re looking at replacement and expansion of business data centers, and security costs for IT (information technology).”

Hackers are more aggressive than ever, and the cost of protecting hotel systems has risen accordingly, says Shah. Not only does a company have to replace computers, it also has to ensure that the latest encryption software is in place. But protective measures involve not just encryption, but also thwarting any compromise to corporate systems and executive communication.

That means C-suite personnel as well as the hotel general manager. “How do you enable the security for their laptops, for their desktops, for the overall network?” asks Shah.

Click here to read the rest of the story at National Real Estate Investor.