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Complimentary Telephone and Internet - Is This the Beginning of a Trend?

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June 01, 2005
Telecom | Bundling
Geoff Griswold - theomnigroup@mindspring.com

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© 2004 Hospitality Upgrade. No reproduction without written permission.

Some hotels are still charging outrageous rates for telephone usage and $9.95 a day for high-speed Internet access. Even with telecom usage on a serious decline, many hoteliers continue to use the same call accounting methods developed in the early 1980s—operator-assisted rates increased by a factor, ranging from 10 percent and up. The factor can vary by chain or by property, but has never been palatable to the guest.
A newer, fresher approach is to bundle at least some services into a flat daily rate. Pioneered by Marriott and others, this consisted of unlimited local calls and high-speed Internet for one daily rate. Recently, unlimited domestic long-distance calls have been added to some bundles. In other cases, the guest must join a loyalty program to receive the complimentary services.

Bundling Telecom Free to Guest
Microtel, a 266-property chain based in Atlanta, recently announced a bundle of unlimited domestic long distance, local calls and high-speed Internet available to all guests at no charge. The program is to be implemented by year end 2004.

Microtel is using ATM (asynchronous transfer mode) to transmit both voice and data (Internet) calls. This is a method of transmission that allows characters to be sent at irregular intervals or bursts. These cells can be prioritized, giving voice calls preference over data cells. This approach allows more of the available bandwidth to be used during heavy calling periods for voice.

Long-distance services are being purchased wholesale from a variety of suppliers, including ATT, Quest and Sprint. Telecom capacity is being increased at the property level to accommodate the new program. However, in all cases, recurring monthly costs have been reduced despite a 50 percent increase in capacity in some cases.

Internet access at each Microtel property will be wireless using 802.11b. The company will provide WiFi cards for guests who are not equipped. Self-installing software will be supplied with an SMC card that will function in all notebooks equipped with a PCMCIA slot.

Jon Leven, senior vice president of marketing for Microtel, points out that this bundle is a significant savings to Microtel guests. He said, “Providing these services free of charge to our guests represents at least a 20 percent reduction in costs based on our average rate.”

Steve Jacobs, executive vice president and CIO of Microtel, said the company had explored using voice-over IP (VoIP) as a possible approach. Jacobs said, “The cost of upgrading each property to properly use VoIP was not justified.”

The wireless access points used for high-speed Internet at each property are being installed by Microtel’s IT staff without the assistance of a high-speed Internet access provider.

The Benefits of ByRequest Loyalty
For over a year Wyndham Hotels and Resorts (Dallas, Texas) has been offering free local, domestic long distance and HSIA to guests who are members of Wyndham ByRequest. This guest loyalty program can be joined by anyone at no charge. In addition to the telecom and Internet services, members receive complimentary fax and copy service, at least 500 miles on a choice of nine airlines, express check-in/late check-out and a number of other benefits. To receive these benefits the reservation must be booked on the Wyndham Web site, www.wyndham.com, or though Wyndham’s direct reservation line.
The impact of these benefits has been significant on the ByRequest program. Membership has grown from 25,000 in the year 2000 to over 1.8 million currently.

The company did not have to add additional telecom or Internet capacity to accommodate this program. Rather, they partnered with various suppliers to help control costs and provide superior service. Wynd-ham partnered with Sprint (Overland Park, Kan.) for internal data network services, Wayport (Austin, Texas) for high-speed Internet, SDD (Delray Beach, Fla.) to provide centralized call accounting/management and MICROS-Fidelio (Beltsville, Md.) for property management.

Sprint uses frame-relay technology for transmission, which employs a type of packet switching in the form of frames and are variable in length. This includes accommodating data packets of 128 or 256 bytes that can be switched and transmitted over the network like Ethernet.

Mark Hedley, senior vice president and chief technology officer for Wyndham, said that both company CEOs and guests can see the real value in the ByRequest program. Hedley said, “Companies like the program for the significant savings and guests can now feel free to call their families at night and not have to worry about the cost.”

Are complimentary bundles a trend in the industry? Dan Phillips, COO of Atlanta-based ITS, a technology consulting firm, said that hotels have charged too much for too long for phone calls and have gone to complimentary Internet access too soon. Considering this, the market will probably remain a mix of traditional call accounting/Internet billing, fee-based and complimentary bundles, for the near future.

As guests become accustomed to unlimited long distance and high-speed Internet access at home and work they will expect the same service at a hotel as a required, complimentary amenity.

Geoff Griswold is a hardware and wiring specialist for the Omni Group. Geoff can be reached at (888) 960-8787 or theomnigroup@mindspring.com.

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