Hoteliers Add Phone Fees For Net Use

<B> Hoteliers Add Phone Fees For Net Use</B>

By Cheryl Rosen

As the most mobile travelers adopt new ways to keep in touch with the office, two hotel suppliers are experimenting with a new concept in telephone access charges: the threshold fee.

Citing a worrisome tendency among corporate travelers to tie up hotel telephone lines for hours as they access the Internet, Hilton and Starwood Hotels have begun charging 10 cents per minute for lengthy calls to toll-free numbers.

Starwood, just finishing a 90-day test of a threshold fee that originally kicked in after 20 minutes, last week bowed to customer complaints and changed its threshold to 60 minutes instead.

"We found that 20 minutes is too short; we admit it was the wrong number," said Starwood senior vice president of staff operations Glenn Tuckman. "There's the question of whether it's worth upsetting customers. We decided it's more reasonable to give them an hour to do their work before charging an additional fee."

Hilton is sticking with 30 free minutes before charging 10 cents a minute. "People were getting online in the guest room and just leaving the computer on for hours and hours while they went out," said spokesperson Kendra Walker. "There are only so many lines available in a hotel, and our goal is that every guest should be able to pick up the telephone and get a dial tone, so we've had to add more lines. This was a way to recoup some of the costs."

In theory, Tuckman agreed: "We feel we've provided ample trunk lines in our hotels, but people who are at meetings all day tend to come back to their rooms, hook into e-mail and tie up a line for literally six or eight or 10 hours."

Tuckman said when hotels started charging for long distance calls, guests turned to telephone cards; when they started charging for toll-free access, guests turned to cell phones; and now e-mail. "Every time we try to capture telephone revenue, we force our customers to seek a new alternative," he said.

And indeed, corporate travel buyers already are looking for ways to mitigate the new fees. "Even though it's only 10 cents, with so many of our travelers on laptops for an hour or more, it's going to add up--and it's a trend that's only going to get bigger," said Lorraine Leavitt, regional travel manager for Hewlett-Packard. While she has been able to "negotiate away the fees in some cases at the property level," Leavitt has had little success at the chain level, though H-P is the nation's twelfth-largest travel buyer (<I>BTN</I>, Aug. 16).

Wyndham properties still charge a flat fee for toll-free access, ranging from 25 to 95 cents--but it has noticed the tendency of Net users to tie up lines, and falling profits from telephone revenues as cell phones undermine the hotel switchboard. "Revenues on telephone service are dropping like a stone just as the incremental costs are rising," said president Les Bentley. "I'd guess our revenues are down 20 to 25 percent over the past two or three years. It's fairer to charge by the minute for telephone usage, but it's very difficult to explain to the customer."

Like most chains, Wyndham's answer is to offer high-speed Internet access that reduce customers' online time--though Wyndham has added a unique twist. "We're going to offer high-speed Internet access to our best customers for free or close to free," Bentley said. "Our hope is to do away with 800-number charges altogether."

Hilton, too, will offer high-speed Internet access at a flat $9.95 per day. Currently in about 200 rooms per property at 15 hotels, the service will be available in 130 hotels nationwide by 2Q00.

At the buyer level, most companies concede they are ill-prepared to deal with rising telecommunication costs, and have little in the way of corporate guidelines. "I don't know one travel manager who has zeroed in on those costs, though I agree that they should," said Carol Salcito, president of travel management consultancy Management Alternatives Inc. of Stamford, Conn.

Others suggested that a line in corporate travel policies might help.

"Most travel policies already address telephone charges, if only to spell out that travelers may make one call home a day," said one travel manager. "The ones I've written also say that excessive personal telephone charges should be absorbed by the traveler--though 'excessive' is not defined--and that travelers should use their telephone cards instead of direct dialing from hotels."

If Internet access fees continue to rise, however, as he believes, "I could easily see adding a line to the telecommunications part of our policy and at least asking travelers to use the most cost-effective means of accessing the Internet whenever possible," he said, "just as we ask them to fill up their rental cars with gas whenever possible. Often they comply. But in a mission-critical situation, they pay what it costs to get the job done, and their managers allow it."

At IBM, the nation's largest travel buyer and home base to hordes of ThinkPad-toting travelers, road warriors already are educated in the most cost-effective ways to access online services and e-mail: Using local access numbers in major cities to access the IBM system, downloading their e-mail and then immediately logging off and responding to messages offline, then logging back on to send mail out. Travelers who do that should not need more than 20 minutes online, said worldwide employee disbursement systems manager John Rosato. If they want more time to surf the Internet, they could log off every 20 minutes, give someone else a chance, and then log back on, without generating a threshold fee.

"I think it would be a good idea to post a travel tip on our Web site warning our travelers to be sensitive to these new charges," Rosato said.

Some hotels are coming up with other alternatives to telephone charges.

"Certainly telephone usage is off since business travelers began carrying cell phones," said Ritz-Carlton spokeswoman Vivien Deuschl, but the hotel has come up with an option that will keep it from having to nickel and dime its high-end clientele for any telephone charges. "We are not going to impose a fee for toll-free access on our customers. Instead, we are considering a flat, competitive daily rate that will cover all long-distance telephone usage by guests."

Bass Hotels spokeswoman Kerri Wightman, meanwhile, said its "current policies for Holiday Inn, Holiday Inn Express and Crowne Plaza Hotels and Resorts would not allow for this type of additional fee, although it is a possibility for Inter-Continental Hotels and Resorts." And, she added, "this is obviously an issue we will continue to monitor, because it isn't fair to guests who want or need to make calls but can't because all the lines are tied up."

Bass corporate policy mandates that all Holiday Inn, Holiday Inn Express and Crowne Plaza Hotels & Resorts properties offer free access to 800-numbers and operator assistance, and "recommends a marginal mark-up over AT&T operator assisted rates for direct-dial, long-distance access."

At the 10 Inter-Continental Hotels & Resorts in North America, telephone charges are "driven by market conditions," but Bass has set a maximum charge of $1.00 for all calls.