Future Communications
Hotels install telecom systems that handle growing demands for low costs and high bandwidth.
By Joan Marsan, Technology Editor -- HOTELS Magazine, 9/1/2000
Wireless communications clearly have had an impact on consumer lifestyle. With an estimated 552 million mobile phones in use, there can be no doubt that travelers are increasingly connected. And while customers revel in the control and flexibility portable personal phones allow them, hoteliers cringe at the revenue-losing implications of wireless technologies.
The Wireless Advantage
But wireless isn’t entirely a losing proposition for hotels. At the Sheraton Suites Houston near the Galleria, Houston, Texas, a US$75,000 wireless system allows the hotel to prepare for the future while better meeting the needs of its present-day clientele. The 286-suite property is located in the upscale Galleria district of Houston, an area of mixed business and residential properties renowned for its shopping facilities. Seven miles from downtown Houston and centrally located between the city’s two airports, the Galleria district’s hotels have seen a growth in short-term group meetings business (an average of 20 to 30 people for two to three days) during the past year, a trend that is expected to continue.
Since business travelers comprise the bulk of this all-suite property’s guests, high-tech facilities are essential. Every room offers two phones with two lines, and the “smart suites” with their executive facilities on the 15th floor compliment the dual lines with a fax, copier and printer. Throughout the property, guests have access to high-speed Internet service. But it comes with a twist. Rather than offering a cable-bound system, the Sheraton offers the Richardson, Texas-based Mobilestar Network’s wireless high-speed access in guestrooms, meeting spaces and even the lobby of the hotel to regular subscribers of the service and to those who purchase daily access through the hotel.
Because the system is subscriber-based, meaning only those who’ve registered with MobileStar can access the wireless network, most users at the Sheraton Suites are meetings clientele, with an uptake rate of about one meeting per week. Charges for the service are levied on a per-person (or per hook-up), per-day basis. If a group registers for one or two users, the charge is about US$95 per person. With three to five users, the cost drops to US$85 per person, and with six to 10 users, it drops again to US$70 per person.
The subscriber-based nature of the service has helped the hotel to cultivate group business. By contacting lists of corporate MobileStar subscribers and informing them that the Sheraton offers the service, the hotel increases its chances of becoming a preferred lodging choice for those companies. This tactic attracts individual transient guests thrilled to be able to access the high-speed service to which they have grown accustomed to at their home offices, as well as the corporations’ meeting planners who prefer to book spaces already outfitted with their technical requirements.
While these pre-subscribed and meetings-oriented guests form the primary market for the hotel’s wireless service, other options under exploration would extend the service’s reach to more users. “Because it’s a new technology, a lot of people are interested,” says Rick Reed, director of sales and marketing. “So we want to make it accessible to them.” The hotel itself cannot sell subscriptions, but the hotel could hold an extra stock of subscriber cards that would be provided to guests for a daily rental fee.
Relying On Land Lines
Reed raves about the speed of the service (PowerPoint presentations download within minutes) and the ease with which meetings space can be prepared. And wireless has exciting implications for hotel operations: Temporary PMS stations could be set up quickly to handle morning check-out rushes. But consultant Ron Gaj of O’Neal/Gaj International, Hawthorn Woods, Illinois, says wireless service will never replace land lines. “They’re bending the laws of physics every day,” Gaj says, “But full motion color video still takes category-5 cable.”
Heeding Gaj’s advice, the Ritz-Carlton, Philadelphia, installed category-5 and fiberoptic cabling for the delivery of high-speed Internet service to guest quarters. Rooms also are outfitted with two dual-line phones (one cordless) and a single-line phone in the bathroom. And while call accounting isn’t as profitable as it used to be, Gaj says there will be a leveling off of losses.
“Hotels are going to have to reduce the rates they’re pushing on these systems,” Gaj says. And Reed agrees. Responding to customer complaints, the Sheraton Suites Houston dropped charges on 800 calls, which were tolled after the line was in use for 20 minutes. Customers will soon demand that hotel long-distance rates fall into closer alignment with rates consumers pay at home, Gaj says. But bandwidth, he says, will soon earn a fairer profit.
New devices, such as Boca Raton, Florida-based SDD’s JAZZ Internet accounting server, allow property managers to analyze and bill for the amount of bandwidth a guest uses in-room. A customer who places a local voice call would be charged a different telephone rate than a guest who places a local call to an Internet service provider and then downloads streaming video presentations. While customers have mixed attitudes about telecom charges, Gaj notes, most would accept appropriate charges that reflect greater and lesser intensities of use. “For hotels, things are going to become more flexible,” Gaj says.
Tech Briefs
Commerce Goes Mobile
An estimated 552 million wireless phones are currently in use, and 10% of them are Web enabled. By 2003, more than 900 mobile phones, about 80% of them Web-enabled, will link consumers with retailers. Swissôtel Hotels & Resorts and Thistle Hotels are providing service to these connected guests even before they arrive.
Swissôtel and Thistle have developed wireless application protocol (WAP) services accessible by enabled handheld devices, such as mobile phones, pagers, two-way radios and personal digital assistants. The services allow users to access information about a hotel from these handhelds. Guests on the go can use their WAP devices to locate the closest hotel. The Swissôtel WAP service offers directions and airport transportation, and Thistle enables WAP users to browse the latest special offers or e-deals. Both companies expect to add WAP-enabled reservations.
Just a small percentage of guests currently access these WAP services. But early implementation gives hoteliers a head start, says Karen Plumb, electronic marketing manager, Thistle Hotels. “This allows us to learn as the process moves,”Plumb says. “It takes too long to learn the technology if you wait until it’s commonplace.”
And the new technology promises to save hoteliers time. Creating WAP service requires only a reformatting of Web content. And ultimately, the concierge will field fewer calls, says Michelle Woodley, vice president distribution, Swissôtel.
Supplyline
Hospitality professionals, including representatives from the American Hotel & Motel Association (AH&MA), the Hospitality Industry Technology Integration Standards (HITIS) advisory committee, the OpenTravel Alliance (OTA), Microsoft, Newmarket International and Wyndham International, gathered at HITEC 2000 to accelerate e-commerce standardization discussions...
IDeaS, Eagan, Minnesota, and Serenata Intraware, Munich, completed integration of the yield management solution, e-yield, and the BookHotel Internet booking engine...
Four Seasons Hotels & Resorts, Toronto, signed a reservation services agreement with TRUST International, Frankfurt...
CAIS Internet, Washington, D.C., and INNCOM International, Old Lyme, Connecticut, partnered to integrate high-speed Internet and in-room automation solutions...
Everest Broadband Networks, Fort Lee, New Jersey, and Mitel, Kanata, Ontario, teamed to offer packaged voice, data and Internet services...
VirtualLINC, Dallas, partnered with Dallas-based ClipsCom to offer streaming video and customer satisfaction reports...
AremisSoft Corp., Soking, Surrey, U.K., launched on-line booking services at hotelsforbusiness.com and hotelsfor leisure.com...
On Command Corp., San Jose, California, introduced Screen Genie, an electronic survey tool...
Twelve Ritz-Carlton properties will install the Integrated Management Information Soutions (IMIS) system by Scala Hospitality, Lake Mary, Florida.
Michael Ball Talks Technology
Michael Ball, group director, sales & marketing, Shangri-La Hotels and Resorts, Hong Kong; former executive vice president of REZSolutions, Inc.
Q: How are you applying your experience branding the REZSolutions portfolio to Shangri-La?
A: Many years of consistent brand management and development in terms of physical infrastructure, service delivery and positioning have resulted in Shangri-La enjoying a well established and positioned brand image throughout much of Asia. Our priorities can focus on carrying that message to a wider audience. To have such a strong existing alignment between the physical product and the market perception is not something every hotel group enjoys, especially those who, like Shangri-La, have enjoyed recent portfolio expansion. If we have issues in this regard, they are related to the fact that in some markets, upscale travellers and intermediaries are not fully aware of the sheer scale of the group, with 37 hotels and more than 19,000 rooms under management.
The dramatic introduction of new information and distribution channels and technologies, coupled with the customer’s growing appetite for information, are a real plus for us. We intend to harness these opportunities to carry our message and brand to those target markets with a speed-to-cost ratio that was previously prohibitive. A simple example here is the recently revamped Shangri-la.com Website, which now contains more than 950 pages of information and is designed to build a personalized relationship with existing and potential new customers. Our philosophy is based on the premise that the more people know about Shangri-La, the more they like it.
Q: How does sales and marketing technology differ between the independents you have worked with and Shangri-La, and how does this change your approach?
A: The challenges and opportunities technology brings with it are broadly the same in my previous role and this, except given that we have a single PMS/CRS platform groupwide, introduction of enhancements, inventory control and distribution, and the implementation of decisions can be enacted faster. We are able to tie in our sales and marketing actions more closely to inventory and adopt a more yield management-driven approach. That said, while Shangri-La is a group of hotels, we operate in many different markets and must balance groupwide and local market demands.
Q: How are new technologies changing the face of sales & marketing?
A: I would make three points here, all related to the Internet effect. Without doubt, the increasing ability service companies have to establish a personalized relationship with customers and the growing expectations of customers to be in control of that dialogue, in qualitative and quantitative terms, will have a major impact. The consumer increasingly determines the effectiveness of marketing campaigns, calling for constant reevaluation of the media and format of creative used by hotel marketers.
Secondly, any gap between perception and reality in product offering is narrowing as communication and content-provision technology increases. This will likely allow for increased segmentation among hotel groups. A hotel brand without a clear positioning will likely find commercial life increasingly difficult.
Thirdly, regardless of size, hotel groups will be faced with a constant stream of strategic technology decisions having to be made against a tactical timeframe: single vendors vs. ASP models, yield management parameter settings, on-line vs. off-line resource allocations, and so on. The larger the group, the bigger the decisions, but the fundamentals remain the same for all.
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