High Five

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High Five

By William Atkinson, Contributing Editor - 06/01/2007

Hotel operators are continuing to implement high-speed Internet access (HSIA) in guestrooms, exploring ways to leverage the technology to boost occupancy and drive revenue. However, achieving these goals isn't guaranteed simply by installing HSIA and advertising this fact on marquees and websites. The key to boosting occupancy and improving revenue involves strategic HSIA installation and management. This means providing HSIA features that are the most attractive to guests, making their experiences the most enjoyable, and encouraging them to return time and time again.

There are five big selling points that will likely become differentiation points for HSIA in the near future, especially with technically savvy group business such as meeting planners, explains Chris Hartmann, managing director of HVS Technology Strategies (Mineola, N.Y.), the world's largest hospitality-specific consulting firm. According to Hartmann, hotels need to be able to say to meeting planners and individual guests: "Here is the bandwidth we have available. Here are the tools we have to manage and control this bandwidth. Here are the options available for tiered access if you require more bandwidth. Here are the security features we offer. Finally, we also offer wireless HSIA."

Bandwidth availability
A standard application for hotels, according to Hartmann, is a single T-1, which is 1.5 megabits, shared among 100 to 200 rooms. "If you provide this service for free, you probably experience about 50 percent usage at peak time," he notes. "Under such circumstances, the bandwidth available to any one room is miniscule compared to what guests have in their own homes." In addition, technology that requires very high bandwidth, such as TV or video in real time, downloading TV shows, or watching streaming shows from the Internet, is just starting to take off. Over the next three to five years, he believes, these will become very dominant applications. "The question will be how to provide all of the necessary bandwidth to guests," Hartmann states.

Unfortunately, according to Hart-mann, this isn't a problem that individual hotels will be able to solve on their own in the long-term. "The industry itself needs to address this problem — finding better ways to bring in availability of cheaper bandwidth to hotels, such as DSL, fiber optics, or cable modems," he suggests.

Hotels that rely heavily on convention business especially need to understand the importance of sufficient bandwidth to meet the needs of convention participants and individual guests simultaneously. One such hotel, the Hilton Anatole (Dallas), is a large convention-driven property with a lot of meeting space. The property uses Swisscom ( www.swisscom.com) HSIA technology. "We currently have a DS3 circuit for the hotel, and we share this circuit between the guestroom side and the meeting side," reports Jeff Mondlock, director of finance. "However, we are considering purchasing another DS-3, so we can segregate the traffic between guestrooms and meeting rooms." One reason, he explains, is because there have been a couple of instances recently where the hotel experienced a lot of bandwidth requirements on the meeting side, which ended up slowing down availability on the guestroom side. Given just how much it relies on convention business, Hilton Anatole realizes that sufficient bandwidth is critical to attracting convention business while at the same time satisfying the needs of individual guests.

Management and control
Even if you have what might be considered sufficient bandwidth, it must be managed and controlled properly so that a few heavy users cannot purposely or inadvertently use most of it for themselves, leaving other guests with insufficient availability.

"These days, the biggest trend in HSIA is bandwidth management and control," states Hartmann. "Guests expect Internet service, and they expect it to work reasonably well. When they have a problem with access or availability, they don't know what the problem is and probably don't even care. They just want service." According to Hartmann, research shows that guests who are not happy with Internet service often don't return to the property.

More and more, providers are starting to offer bandwidth management and control to make sure that one or two guests who know what they're doing don't take the majority of the bandwidth on the property and shut everyone else out.

Bandwidth management and control is important not only for guest use, but also for internal use. Accor North America (Carrollton, Texas) uses New Edge Networks (www.newedgenetworks.com ) for its internal HSIA needs, such as corporate communications and administrative staff. "We wanted to get away from the aging frame-relay technology, where bandwidth costs are relatively high compared to some of the newer technologies such as broadband," explains Jessie L. Burgess, Jr., director, IT telecommunications. "We are planning to get into several new applications, such as property management systems that require more frequent backup for added resilience." This requires additional bandwidth and the ability to deploy the bandwidth relatively quickly. Accor North America currently has several hundred of its properties using DSL today, running secure VPN tunnels across those DSL circuits. "Since the broadband connects to the Internet, we can manipulate our VPN tunnels the way we want across the Internet," he explains. "This allows redundancy, in that properties are connected to our data center and, as a backup, another virtual tunnel to our headquarters."

Tiered access
One burning question these days is whether to charge for HSIA or not. Some experts believe that charges are reasonable, given that the service incurs extra costs for the hotels. Others believe that it should be free, just as electricity and hot water are, as a way to attract new guests and return business. One way to deal with the question is to offer both free and paid service, called tiered access. "Some hotels offer tiered access, where basic access is free or at a modest charge, but if guest wants a higher throughput or a VPN that requires a higher quality of service, they pay extra for that," states Hartmann.

One such company is Huntington Hotels. "We pioneered free high-speed Internet access six years ago," reports Ray Cruickshanks, general manager, Residence Inn Los Angeles LAX/El Segundo, and area manager for Huntington Hotels (Los Angeles), which uses iBAHN ( www.ibahn.com) HSIA technology. In terms of tiered options, the hotel offers free bandwidth at DSL speed, and guests can also purchase higher speed HSIA. "Guests seem to like this option," states Cruickshanks. "Our occupancy averages in the mid- to high 80s and low 90s, and we believe a lot of this is due to our Internet service."

Currently, according to Hartmann, security issues surrounding Internet access don't seem to be a big priority among guests. However, he believes, these issues will become much more prominent in the future, particularly with wireless Internet access. "One thing driving this relates to more and more news stories about business executives staying in hotels and having their computers hacked into and thousands of credit card numbers stolen," he notes. Hartmann adds that Deloitte recently did a survey of hotel customers to find out how easy it was to get into their wireless networks. "It was abysmally easy," he reports.

On the wired side, guests will want to know that a hotel has security v-LANs or an all-switched network. On the wireless side, guests will want to know that the hotel has the ability to detect rogue access points.

According to Daniel Connolly, Ph.D., security can be more of a problem for cost-sensitive guests. Connolly is an assistant professor at the University of Denver, and a member of the board of the Hospitality Information Technology Association. "In a lot of hotels, guests end up using free wireless service that is available in the lobby because they don't want to pay for the fee-based wired service in the room," he points out. They would prefer not to have to use the lobby service, though, because, in the lobby, they have to deal with privacy concerns and distractions. "With hotels saying that they emphasize 'guest experience' heavily, is this the kind of 'experience' they want guests to remember?" Connolly asks. His recommendation is that in-room wired service should be free so that guests needn't feel compelled to use the wireless lobby service, which can be fraught with more security concerns.

Right now, according to Hartmann, 802.11b wireless is pretty basic, with the standard 11 megabit connection. The 802.11g has been out for awhile, as has 802.11a, which offers different frequencies and higher bandwidth connections. "The 802.11h is not a standard yet, but is quickly becoming one, and it provides more reliable, higher bandwidth," he states. Just as higher bandwidth and more powerful service are becoming differentiators on the wired side today, Hartmann believes that improved wireless service will become a strong differentiation factor for hotels in the future.

One company moving ahead aggressively in this area is Choice Hotels (Silver Spring, MD), which utilizes HSIA technology provided by Telkonet (www.telkonet.com). "We began to consider wireless Internet access for our economy segment almost three years ago," reports Kevin Bradt, division president of economy market brands for Choice. "We wanted to make sure we could provide an affordable solution. We also wanted to make sure we could provide a consistent solution, especially within the walls of each property."

The properties are experiencing what Bradt terms "incredible adoption by users — hundreds of thousands of them. We are seeing a big spike in individual business travel, largely because we offer and advertise the availability of wireless," he states.

Now that the properties have a 100 percent consistent platform throughout the entire chain, they can build on it. "In fact, within the next one to two years, we will be redefining the Internet experience for our guests," says Bradt, who was not yet ready to comment further on the developments.

Hotels that stay abreast of the latest HSIA technology, understand which of these are most important and appealing to guests, and then actively advertise these, will continue to see increased occupancy and revenues as a result.