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Wireless Changes Everything, So, Do Ya Want a Latte With That or What?

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June 01, 2003
Wireless | Technology
Jocelyn Valley - Jocelyn.M.Valley@us.ibm.com.

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© 2003 Hospitality Upgrade. No reproduction without written permission.

Wireless is allowing people and businesses to communicate and operate in ways that have historically been impossible. On its way to exploding into a multi-billion dollar industry in the next few years, wireless has already attracted millions of users. Hospitality companies have a unique opportunity to increase the value of their core products and services by providing a wireless infrastructure for customers to connect to the Internet, check e-mail and utilize corporate applications. In addition, there is a significant opportunity for businesses to benefit from the network by offering customized guest amenities and equipping employees with wireless devices to improve upon current operational inefficiencies.

As the first large retail chain to deploy wireless, Starbucks has established approximately 2,000 wireless-enabled stores worldwide. While there has been an abundance of positive publicity around the deployment, users accessing the network are few and far between. At each location, between one and five people are estimated to be using the service every month, at a rate of $6.00 per hour for one-time use or $39.99 per month for unlimited access.

In a similar manner, McDonald’s has recently begun a pilot deployment at 10 stores in New York city, with several hundred more planned by year end. Customers receive 60 minutes of wireless access free with the purchase of an Extra Value Meal or can buy access for $3. The deployments are too recent to confirm the degree of success, but the initial pattern seems to be similar to that of Starbucks with relatively low customer usage.

Wireless at McDonald’s is a tougher sell because of the typical clientele. With more of a family-oriented environment than other merchants, McDonald’s is generally not considered a place where typical customers would bring their laptops. With the model still in its infancy and almost certain to change, businesses must be creative to lure customers into using the infrastructure. One way to do this may include renovation of current facilities to cater to laptop-savvy customers by adding comfortable seats, wireless printers and a workspace with enough room for both a PC and a burger. Another option is to offer free telephone calls via voice-over IP (VOIP), a technology that sends voice over the network in a similar manner as data. While VOIP is currently in development, the functionality will offer significant opportunity for stores of the future.

Above and beyond providing customer access, wireless can offer customized customer experiences and improve upon current operational inefficiencies. In instances where speed of delivery makes or breaks a business, as is the case of McDonald’s, creative ‘line-buster’ solutions can be deployed. These wireless tools range from remote ordering kiosks (staffed or unstaffed) and digital menu boards to devices that automatically control equipment.

Another area where wireless infrastructure is key is within the lodging space. Guest Internet access is becoming a standard amenity throughout the industry and travellers will soon find it as necessary as ice machines and cable television. Industry research recently conducted by IBM indicates the percentage of guests accessing wireless has been seen to exceed 20 percent in some cases, much greater than the uptake at food and beverage outlets. This is a key indicator that wireless is on the rise.

With a significant majority of hotels indicating Internet access can have an impact on occupancy, installing wireless needs to be considered in addition to wired solutions because of greater flexibility, faster implementation, fewer connectivity issues and reduced capital investment. In more and more cases, the availability of in-room, public space and meeting room access is a make-or-break decision for both the independent traveller and meeting planners of small and large group events.

Operational improvements can be realized when wireless devices are used for business functions such as check-in, checkout, bill printing, directions, concierge services, amenity requests, housekeeping, maintenance, point of sale, sales and catering and table management. While the number of these applications currently in use is minimal, redesigning today’s core processes tied to wired solutions will allow hotels to operate more efficiently, empower the guests with more resources and respond to customer requests in a more prompt and accurate manner.

How Does It All Work?
Wireless uses a family of specifications known as 802.11 to send high frequency signals to and from enabled devices. The most common standard today, 802.11b, provides acceptable connectivity speeds over a broad range of about 300 feet. Using a different approach, recently deployed 802.11a allows for faster data transmissions, but results in a relatively shorter range. In an attempt to improve upon both the connectivity speeds and range of 802.11a/b, 802.11g is currently in development.

Businesses implement wireless networks for customers and corporate applications two primary ways. In the first option, a local technology department installs access points as an extension of the wired solution. This allows the business to not only receive all revenue from the network but also tags it with the higher risk. The other option is to lease bandwidth from external providers such as telecom companies (T-Mobile, Sprint) or Cometa Networks, a joint venture of Intel, IBM and AT&T. In this revenue-sharing model, the provider ensures proper security, billing, bandwidth control, network maintenance and technical support.

Using a different approach than installing hotspots, the wireless Internet can also be found through a high-speed cellular system known as 2.5/3G. As an extension to the phone system, wireless devices are given an actual cellular phone number. While the technology is not widespread today and still under development, the portability and flexibility that is opened to users make it a technology that needs to be watched.

What about Security?
Gaps in current wireless standards (802.11a/b) expose some security concerns. The good news is that security is improving in parallel with this emerging technology. A wireless security standard known as 802.11i is targeted to be available the end of 2003. 802.11i is software that works on top of 802.11a/b to improve security features such as user authentication and key encryption. In addition, companies are utilizing other security techniques such as virtual private networks (VPN) to ensure that users access company information in a controlled environment. While the Internet will never be free from security issues, moving to the 802.11i standard in combination with other security measures at the device level allows wireless to be deployed throughout the industry without serious concerns. For more information on the security of wireless go to page 140 in this issue.

Decision makers are not to be discouraged by today’s low customer usage since wireless is still in its infancy. The introduction of wireless into daily life has focused to date on business travellers and will start to become mainstream in the next few years. The demand for communication anytime and anywhere is definitely on the rise. As an indicator of this explosion, Cometa Networks has pledged to roll out 20,000 hotspots in the United States by 2007. In addition, wireless is at the top of the list at Intel where the Centrino chipset, built specifically to run longer on battery power and connect more easily to wireless networks, was recently released.

With the tethers of wires removed, only a lack of creativity can limit the future possibilities of wireless. While the number of users today may not be impressive, the deployment of thousands of additional hotspots, decreased security concerns and more readily available wireless devices will strengthen today’s demand and make it a commodity across all food and beverage facilities, coffee shops and hotels. Wireless must be considered today – and even more opportunity exists for the future. The potential value can serve as a competitive advantage by enhancing customer amenities and transforming fundamental business processes to bring about greater customer satisfaction and employee efficiency.

Jocelyn Valley is an IT specialist for IBM in the travel and transportation industry. She can be reached at Jocelyn.M.Valley@us.ibm.com.

© Hospitality Upgrade 2003. Reproduction without written permission is prohibited.

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