Hotels Make Room For Internet Access

<B>Hotels Make Room For Internet Access</B>

By Bruce Serlen

Hotel chains are moving to the guest room, and beyond, to meet business traveler demand for high-speed Internet accessibility. Within the same week last month, Choice Hotels International said it will install Internet-ready computers in rooms and Hilton Hotels Corp. and Marriott International said they will make the Internet accessible in hotel lobbies.

The primary driver behind the chains' decisions for the redesigns: to give business travelers easier access to e-mail.

For frequent travelers especially, staying in touch with the office has come to mean the ability to retrieve--and respond to--the electronic messages left for them.

Consequently, travel managers want to be confident that high-speed access is available in every property in the hotel program. Given that some chains are not installing it in every room, travel managers also want assurances that their travelers are getting the high-speed-ready rooms. As for cost, most hotels are adding a surcharge per day for the service, an added cost that travel managers with negotiated rates typically don't want to absorb.

"E-mail clearly has become the killer app," said Will West, president and CEO of STSN, a provider of high-speed Internet access to Marriott International as well as other hotel companies. According to industry estimates, 60 percent to 70 percent of business travelers today carry laptops with them when they check in.

And as hotels quickly learned, traditional telephone lines in guest rooms are inadequate to meet the demand. "Hotels often find themselves approaching PBX voice line saturation," said Dirk Heinen, vice president of marketing for Wayport, another provider of high-speed access whose hotel clients include Wyndham International. "Dial-up systems for accessing the Internet are simply too slow and too costly. Where hotel telephone systems are prepared for calls lasting three-to-five minutes, data calls can last three hours."

Hotels' first line of attack continues to be guest rooms, as well as meeting spaces. "In today's environment, we consider high-speed Internet access an essential for business travelers," said Dan Banchiu, senior vice president for rooms operations for Marriott International. "Consequently, we started installing a wired system in Marriott, Renaissance and Ritz-Carlton properties, going into major U.S. gateway cities first."

That effort now has been expanded to all Marriott brands. "We intend to have 500 hotels wired by the end of the year. We chose a wired approach because it seemed the way to go today, though we believe wireless systems will improve over time," he said.

Marriott also made the decision to wire each room in each hotel. "We wanted to provide high-speed access as an option without the travel arranger having to request it when making a reservation," Banchiu said.

By wiring each room, a hotel avoids disappointing the traveler who may have stayed there in a high-speed-equipped room before. "It's a potential guest dissatisfier you just don't need," STSN's West said. "Once travelers come to depend on it, they're likely to be disgruntled if it's not there."

Yet other hotel companies are backing a less sweeping rollout. At Hilton Hotels, for example, a wired system is being installed at some hotels, while a wireless option is being provided at others. Given a particular hotel's percentage of business travelers, however, some properties will offer both options.

High-speed access, however, is not available in every Hilton room. Instead, a fixed number of rooms is being outfitted in a hotel, depending on the room count. Underlying the strategy is the desire to get rooms upgraded in as many hotels as possible, as quickly as possible.

According to Ariel Martinez, Hilton's director of e-business hotel technology marketing, more than 100 hotels had the wired solution in place by June 1, while the wireless solution was in place in 70 hotels.

While hotel companies acknowledge the importance of high-speed access to business travelers, few are prepared to provide it gratis. Generally, the charge per day for unlimited use is $9.95. "We're also testing value packages in an effort to define the best price point," Marriott's Banchiu said.

At extended stay properties, multiday discounts make particular sense. "Business travelers on long-term assignments are more likely to need to work in their rooms," said David Wigglesworth, president of the hospitality division of Darwin Networks, which provides high speed to Choice Hotels. "This includes other uses of the Internet beyond just retrieving their e-mail,"

Opinion varies on whether these charges eventually will get absorbed into the basic room rate. "Some chains are already choosing to absorb the cost the way they do the cost of basic cable television," said Gary Rabin, chief strategy officer for CAIS Internet, which is providing high-speed access to Hilton, Bass and other hotel companies. "But travel buyers whose travelers don't carry laptops with them could argue the service is more like the mini-bar. 'If we don't choose to use it, why should we pay?' "

Wigglesworth believes that high-speed access will become a basic amenity as time goes by, but not now. "For the foreseeable future, it will still be considered a premium and be priced accordingly," he said.

Wyndham International added a twist to the price issue in April when it launched its Wyndham By Request frequent guest program. High-speed access fees are waived as a benefit of membership, a first among hotel frequency programs.

"The ability to access e-mail more quickly surfaced again and again as a high priority for our business travelers," said Bill Morrison, director of Wyndham By Request, "so it made sense to make it a benefit."

Last month, Choice Hotels announced it is taking high-speed access in the guest room one step further, offering travelers not only the upgraded service, but the hardware to access it. Choice officials reported the decision a few days after Hilton's announcement--that it is placing kiosks in its lobbies to allow travelers to access their e-mails through high-speed Internet hook-ups--and preceded Marriott's announcement that as part of the overhaul of the lobbies of its Courtyard brand, it would make it easier for travelers to work in the hotels.

"Others are providing high-speed capability and assume travelers are carrying laptops with them," said Daniel Rothfeld, Choice's senior vice president of e-commerce and emerging business.

With nearly 400,000 rooms in its system, Choice intends to have either high- speed access or high speed plus a computer available in 50,000 of them by the end of 2001. The PC being provided is the Compaq iPAQ.

Even travelers with their own laptops may opt to use an already installed PC, if one is available. "Frequently, laptops need reconfiguring to work properly, so having a PC in place can be a time-saver," he said.

Choice is recommending a $5 or $10 premium in the daily room rate for rooms equipped with the PC, plus the typical $9.95 per day charge for the high-speed access. Rothfeld quickly added, however, that decisions about charges are up to individual property owners.

"As a franchisor, it's at the discretion of individual owners whether or not they want to add these services and, if so, what percent of rooms should offer them at what charge," he said. Depending on location and business/leisure travel mix, Choice recommends installing the high-speed capability in 70 percent of rooms and high-speed access plus a PC in 30 percent.

To administer the program, Choice created a separate hospitality technology subsidiary called Stay Connect, which expects to market these services to hotel companies other than Choice brands.

Experts not involved in the Choice experiment disagree on the actual value of providing computers in rooms. "Business people who are serious about remaining connected to their offices are likely to carry laptops with them," West said. "They'll have their own and want their own."

Security also could be a concern. "Travelers want to carry their files with them and not download them into a machine not their own," Banchiu said. "After all, you don't know who was in the room last."

Moving outside the guest room, lobbies and other public spaces in the hotel are the logical next places to provide travelers-in-a-hurry with high- speed access. Hilton's plan to satisfy this need with kiosks is a step in this direction.

In what's being billed as an industry first, Hilton plans to install the kiosks in 100 Hiltons and Doubletrees, starting this month, and expects to have 300 participating in the project by year-end. "We're targeting not only travelers who don't have a laptop with them," Martinez said, "but also those who have laptops, but just want to check a message--or even a stock quote on the Internet--quickly and not take the time to boot up their own machine."

Travelers not staying at the hotel--those keeping a business appointment, for example--may want the convenience of the kiosk as well.

In many hotels, kiosks may be available along with high speed in the guest room, but Martinez doesn't see this as a redundancy. "To the contrary, telephones are available in guest rooms, but pay phones also can be found elsewhere in the hotel," he said.

Hotels also will have the option of loading the kiosks with business software applications. "This would make the most sense at business hotels, where travelers unexpectedly can need this kind of support," said David Luck, vice president of marketing for Ekiosk.com, the outside vendor Hilton is working with on the project.

Initially, the kiosk will be complimentary for the first 10 minutes. "Each added minute will cost 25 cents, charged to a credit card," he said.

Depending on the hotel's size and demand for the service, it could have multi-kiosks onsite. "The logical place for a kiosk is the lobby," said Martinez, "but we also envision them placed near telephone banks, concierge stations and in pre-function space near the meeting rooms."

Hotels will have the option of choosing from 18 different models, depending on their layout. "Prototypes range from stand-up models that resemble telephone booths or ATM machines to tabletop and cyber caf&eacute; models," said Luck, who described the cyber caf&eacute; as consisting of two terminals at one extended tabletop.

Security concerns are an issue here as well. "They're certainly handy and convenient," Wayport's Heinen said, "but given the choice, business travelers will want their companies' e-mails coming into their own laptops."

The hotel lobby is also the focus of the Courtyard redesign announced last month by Marriott. Subsequent phases of the Courtyard brand overhaul will target guest rooms as well as the hotels' exterior.

"Business travelers are often multitasking, meaning they're so pressed for time they're doing more than one thing simultaneously, including accessing e-mail," said Craig Lambert, Marriott's senior vice president for brand management, select services.

"As a result, we set out to rethink the lobby space in a way that would allow for this increased computer usage along with possibly meeting with colleagues, relaxing and having a light meal," he said.

"Beginning in 2001, all new builds and lobby renovations of U.S. properties will incorporate the new prototype. Lambert estimated that it will be operational in 40 to 50 of the 450 Courtyards in North America within 18 months.

As at other Marriott brands, high-speed access also will be available in Courtyard guest rooms. Consequently, travelers will have the option of being able to work in their rooms or in the revamped lobby.