In-Room Usage At Lo-Speed

<B>In-Room Usage At Lo-Speed</B>

By Bruce Serlen

After a year in which hotel companies eagerly partnered with third-party vendors to install high-speed Internet access connections in guest rooms, usage numbers now indicate that only 3 percent of guests are opting to use the services. Internal projections had been much more optimistic.

While hotel companies acknowledged that the 3 percent figure may seem modest, they also pointed out that the number grew through 2000 and the first half of 2001. "We've seen increased usage month to month across the whole system, which is basically what we expected," said Bruce Rosenberg, senior vice president for e-business and distribution at Hilton Hotels Corp. "Usage peaks on Tuesday and Wednesday nights, which confirms it's being used most by business travelers because these are the busiest nights for this kind of travel."

Marriott International, another large, multi-brand hotel company, tracks high-speed usage by brand, property and destination. "Usage overall is growing more than we anticipated, but only slightly," said Lou Paladeau, vice president of technology business development.

Usage is expected to increase as more hotels become equipped with the technology. "It's true hotels have been disappointed up to now," said Alan Zingale, manager of hospitality and leisure technology consulting for PricewaterhouseCoopers. "But it's a chicken-and-egg phenomenon, meaning there's not yet a critical mass of hotels wired for high speed. So business travelers--not finding it available in enough hotels--don't check in expecting it to be there." Instead, they rely on the hotel's regular telephone system, which may not be as efficient, but they're comfortable with it.

Certain hotel companies have some properties equipped with a wired solution, while others offer a wireless alternative. Generally, wired has seen greater usage than wireless. To use wireless, travelers require an Ethernet card for their laptops. "Our sense is that wireless will become as important as wired in the future," Rosenberg said.

At present, most hotel companies charge a flat daily rate for a wired format, typically $9.95 for unlimited usage. "We really haven't encountered any resistance to the charge," Paladeau said. "The $9.95 daily rate is comparable to what the competition is charging."

Hilton, in fact, experimented with lowering the price, but didn't see any effect on usage. "We even offered it for free in one instance," Rosenberg said. "Usage in that case actually doubled, but in terms of percentage, it still wasn't that significant a difference. It just doesn't seem to be a price-sensitive issue."

While usage has been disappointing overall, there still are business travelers who place a high value on retrieving their e-mail messages. Ironically, hotels in more remote locations reported especially intense interest, which may be a reflection of travelers' state of mind about being out of touch with their offices. "We're in very rural surroundings, which is why our property is so effective as an executive retreat," said Scott Johnson, general manager of the Big EZ Lodge in Big Sky, Mont. "But we see business travelers all the time who aren't comfortable unless they're hooked up to their e-mail, so we have high-speed installed for their benefit."

Likewise, international properties typically deal with differences in time zones. "U.S. business travelers who might call their offices more often are restricted by the time difference, so quick access to their e-mail becomes even more of a priority," said Adrienne Clark, director of marketing for Luttrellstown Castle, a hotel and meetings facility outside of Dublin.