Mobile Offices

Hotels search for in-room technology that is not only ahead of the curve but profitable as well.

By Rebecca Oliva, Technology Editor -- HOTELS Magazine, 10/1/2002

When the 250-room Dorchester Hotel in London renovated its already touted guestrooms in 1988, General Manager David Wilkinson purchased new televisions and redesigned the guestrooms. More than 10 years later, the décor needed some minor touch-ups, but the televisions were outdated and unprofitable. In order to compete with other business hotels in the area, Wilkinson says he needed a television system that could handle the Internet, e-mail and other needs of savvy business travelers.

“When it came time to replace the TVs and cabinets, it would’ve been short-sighted to replace the old with the new,” Wilkinson says. So instead, The Dorchester installed an all-in-one system, which combines a complete business center, including fax, printer, high-speed Internet access (plug-and-play and Web TV) and computer with a state-of-the-art entertainment system in each guestroom.

Around the globe more hotels are installing high-tech communication systems such as these to attract business travelers. If not a complete business center, hotels are adding other high-tech amenities that help attract repeat guests and drive incremental revenue.

Michael Squires, president of Softscribe Inc., Atlanta, a technology consulting company, says as long as hotels are getting a payback they will put anything into their guestrooms to lure potential repeat guests. “Once the business travelers start coming out again, amenities like these will be necessary,” Squires says. “For them, these kinds of amenities might just be the thing to keep them coming back.”

It seems many hotel companies believe that statement as they have invested substantially in in-room technology. Fairmont Hotels & Resorts, Toronto, recently debuted its Virtual Concierge program to help guests troubleshoot their own technology or technology provided by Fairmont. Inter-Continental Hotels and Resorts is coming out with an entire in-room technology program. Details are still in the works.

High-Tech Wonderland

With an initial investment of around US$7,500 per room, Wilkinson expects to receive a return on investment in three to five years, and he says, The Dorchester Group is using the hotel as a test site. But he admits a major goal of the system is to attract repeat customers from the business traveler market.

Despite the recent history of unprofitable PCs in guestrooms, The Dorchester implemented a computer in each room with one point of differentiation: guests use plasma TVs as monitors. Since plasma TVs have high resolution screens, guests are able to make better use of them as computer monitors. “A plasma screen allows you effectively to combine business and leisure in one system,” Wilkinson says. “It allows you to do things you normally would not be able to do.”

Made by NEOS Interactive, a technology company based in the UK, the system consists of CAT 5 high-speed cable, a Compaq computer with a Pentium 4 processor, Microsoft’s Word, Excel and PowerPoint, a wireless keyboard and a NEC 42-inch (107 cm) high-definition monitor with a pixel size of 848 x 480. The system includes extensive entertainment options such as digital movies and a Bose sound system. Guests can send and receive e-mail and access the Internet directly.

To support all of this, The Dorchester installed fiber optic cables that provide a high-speed Internet connection. Guests pay a flat fee to access the Internet (around £15, or US$22). About 90 rooms have the NEC televisions; the others have Loewe 28-inch (71 cm) screens. Rates for high-speed Internet access is £15 (US$23) for 24-hour use of laptop connectivity or Internet/e-mail through the TV; Microsoft Office is £5 (US$8) for 24 hours.

Quantity Vs. Quality

Reaction from guests has been very good. Wilkinson says many guests are pleasantly surprised to find a PC in their rooms, so they don’t have to lug their own laptops.

Squires says business travelers are willing to pay extra for the added convenience of leaving the laptop behind. “Many business travelers are tasked with so much heavy responsibility, and they can’t find amenities such as PCs, printers, fax machines and high-speed Internet access everywhere,” Squires says. “They will come back to where they do find it.”

But offering a total package in in-room amenities isn’t always necessary. Many guests are just looking to connect to the Internet without any hassles. This sentiment is just what the high-tech Elliott Grand Hyatt Seattle, Washington, believed. The 425-room hotel offers high-speed Internet access via its laser beam by Terra Beam. The laser allows a 100MB Ethernet high-speed Internet connection, both fiber and fiberless optics, and a system wired with more than 10 miles (16 km) of cable and three miles (4.8 km) of fiber optics. What this means to the guest is faster Internet connection with a reduced chance of access failure.

According to Michelle Feist, MIS manager, the Elliott, the fast connection speed draws more guests to use it. She estimates 13% of occupied rooms use the high-speed Internet connection. Additionally, the hotel has a back up T1 line, which virtually eliminates the possibility that guests will ever be affected by a system “crash.”

“With the term ‘state-of-the-art’ bandied about so much these days, we knew we had to create something truly exceptional,” says Derek Bottles, chief technology officer, R.C. Hedreen, the hotel’s developer. “We also needed a competitive advantage as a new luxury hotel in the Pacific Northwest.”

The secure Internet connection allows Elliott’s business travelers to continue working at a speed that is equal to or better than their connection at the office, Feist says. Each guest-room includes an On Command entertainment system with movies on demand and Web TV, which allows guests to check e-mail and surf the Web using the television as the monitor.

Other in-room amenities include HP Hotel Printing solution, which allows guests to print from their laptops without pre-registering for the service. Guests can print to an HP Color LaserJet 4600 printer located at the front desk via the Elliott’s Ethernet/Internet network. Since the high-speed Internet access is a free amenity, the Elliott generates revenue from guests who use the printer by charging them US$.50 per page.

Driving Revenue

Offering high-speed Internet access is becoming a norm, Squires says. “It is much easier to add it to the room rate rather than charge guests per hour,” he says. “The ROI on that will be that it will differentiate your hotel,” he says.

Like the Elliott, the Hay-Adams Hotel, located across from the White House in Washington, D.C., offers high-tech amenities such as high-speed Internet access at no charge to guests who have laptops. General Manager and Vice President Hans Bruland chose specific amenities that guests would appreciate. Bruland says he doesn’t want to inundate the guest with technology. “When we went through the renovation, we didn’t want to over-engineer the room,” he says. Other free tech amenities include local calls, access to toll-free long distance numbers and an in-room digital movie library.

“Long distance access that isn’t exorbitantly pricey is going to have to become a necessity,” Squires says. “Every business traveler needs to use the phone whether they use a cell phone or not.”

But Bruland says he has found other ways to generate some in-room technology revenue. Recently, Hay-Adams installed Bartech System’s e-fridge mini-bar system, which automatically implements a charge to the guest’s bill. Since it installed 145 e-fridge systems, Bruland says mini-bar revenues have doubled due to the accuracy of the billing procedure and overall attractiveness of the bar to guests. “We moved the bar to an open shelve, situated near the television,” Bruland says. “The merchandising of the material is far more clever than before.”

The system helps the hotel save on labor costs as well. Since the e-fridge is interfaced with the property management system (PMS), housekeeping staff doesn’t need to check every room to replace items. “When you have a manual mini-bar, the customer often is inconvenienced by a member from housekeeping knocking on the door to check if anything has been taken from the mini-bar,” Bruland says. “It infringes on guests’ privacy too much.”

In addition to the accuracy in billing and labor savings, the e-fridge can act as the brain of the room in Bartech’s Intelligent Room concept, in which the thermostat, electrical outlets, safe and door lock are linked into the e-fridge and connected online to the hotel’s network. Information can be sent to Bartech’s server and then to the hotel’s PMS via a network that also serves as a gateway to the Internet.

And Bruland says, the e-fridge offers other high-tech amenities that the hotel has not yet exploited. The system includes a software interface that allows hotel guests to provide feedback via their PDA to hotel management. Although Bruland says he opted out of using the system as the Intelligent Room system, it is something he is thinking about for the future.