High-speed hotels lure techies

Hotels catering to business travelers are racing to install the latest lure: high-speed Internet access. But will it be worth the cost?

Hotels catering to business travelers are racing to install the latest lure: high-speed Internet access. But will it be worth the cost?

Road warriors have come to expect hotels to offer them fitness rooms, swimming pools and business centers with all the bells and whistles. Now, hotels catering to business travelers are racing to install the latest lure: high-speed Internet access.

Hotels hope to attract business and boost revenue by offering broadband service in rooms and conference halls. Business travelers and their employers like the efficiency of high-speed access.

And as more corporations equip employees' laptops with virtual private network (VPN) software that allows secure, mobile communications with the corporate computer system, many people expect hotel broadband to become as indispensable on a road trip as the company credit card.

"When you go on the road, your work doesn't stop," says Will West, president of STSN, a Salt Lake City-based company that delivers broadband to airports, apartments, convention centers, hotels and office buildings. "The ability to access the Web with a broadband connection is simply a part of doing business. . . . We think it's becoming an amenity people will change hotels over."

Jeff Kagan, a telecommunications analyst based in Atlanta, already does. A frequent traveler, Kagan, considers broadband an essential time-saver he's willing to switch hotels to have. The e-mailed PowerPoint presentations he often gets from companies seeking his coverage can take 20 minutes each to download at a 56-kilobit-per-second dial-up modem speed. "I don't have that kind of time," Kagan says. In the past year, STSN has installed systems for more than 100,000 rooms in 170 cities and 11 countries, West says.

STSN integrates network Internet Protocol (IP) switching, data and voice. It installs a Digital Subscriber Line Access Multiplexer (DSLAM) at the hotel's telecommunications room and connects to the Internet via a T1 (1.5-megabit-per-second) line -- or several T1s, if it is a large hotel.

In the room, a traveler plugs into the STSN box, either via an Ethernet port or a Universal Serial Bus port. If the guest has forgotten his Ethernet card, one can be borrowed from the hotel desk. An Ethernet cable, a USB cable and a USB driver are stocked in the room for convenience.

With a "smart" box in every room, the STSN system is able to provide room-level data security and diagnostic capabilities to assist the STSN 24-by-7 helpdesk in ensuring that every guest can get connected. Data packets go from the guest's laptop, through existing wiring to the DSLAM, out to a router and on through the Internet to their destinations.

Hotels using STSN typically charge US$9.95 per day for service. STSN believes that wireless Internet service will predominate in the future, West says, and STSN's boxes can be upgraded when that time comes.

CAIS is in more than 1.3 million rooms in 9,800 properties under master agreement; it has been installed in more than 750 properties in the past six months, says Evans K. Anderson, CAIS' executive vice president of sales and marketing. CAIS usually deploys a T1 line to the hotel, then, using existing phone lines, creates a local area network that ties guests and meeting rooms together using a proprietary technology.

In the room, guests merely "plug and play," provided they have Ethernet cards, Anderson says. Launching their browsers, they automatically are taken to the CAIS Web site, where they sign up for servicefor US$9.95 to US$14.95 per day.

Both STSN and CAIS give users more than connectivity. The companies also design hotel-specific Web pages that will provide guests with information about hotel amenities, the city's restaurants, entertainment and sights. STSN will design conference pages from which a conventioneer can download copies of presentations, check on upcoming speakers or even enter conference "chat" rooms to discuss the day's events. On Command, which recently relocated its headquarters to Denver, and LodgeNet, in Sioux Falls, S.D., are adding Internet access to their offerings.

Travelers can now flip on the television to cruise the Internet in about 30,000 rooms served by LodgeNet, says Peter Klebanoff, vice president for industry relations at LodgeNet, and acting senior vice president for sales, marketing and business development at InnMedia, a partnership LodgeNet has formed with Hilton Hotels. LodgeNet also has experimented with Ethernet connections in some rooms, he says.

On Command has Internet-enabled TVs in 120,000 rooms in 400 properties, says David Simpson, senior vice president of research and development, regional operations and engineering.

About 10,000 rooms also have Ethernet hookups. Those connections are typically T1 or greater speeds deployed through a number of technologies. On Command partners with Tachyon Networks for two-way satellite service and with Qwest Communications International for terrestrial connections.

TV screens have lower resolution and different aspect ratios than computer screens, and the On Command's @Hotel TV uses a customized browser, developed through partnerships with major Internet brands, for optimal page viewing and easy navigation.

On Command believes its approach has advantages for travelers and hosts. By tying into "that big, beautiful TV" in each room, "you don't have to carry a laptop," notes Nancy Gallion, senior vice president for marketing.

The TV platform also escapes some of the limitations of IP. "We may be able to provide a more clean, slick application that's much more satisfying to the guest. We're not limited by HTML, Java and ASP [Active Server Page]," Simpson says. And hoteliers like having a well-known service provider handle Internet access, Gallion says.

Broadband is also making its way into hotel banquet halls and conference rooms. High-tech conventions "are big revenue opportunities" for hotels, CAIS's Anderson points out.

In a hotel that is not broadband-enabled, a convention planner who wants high-speed hookups for, say, Web-based training, would have to order -- well in advance -- a T1 line to be brought in by a telephone provider, paying hefty installation and minimum-use fees. In broadband-ready hotels, high-speed access is available at a reasonable cost "It's live; it's there every day," Anderson says.

When the $80 million Westin Westminster opened in a Northwest Denver suburb last spring, it not only put Ethernet ports in all 369 guest rooms, it wired and powered its 50,000-square-foot conference center with state-of-the-art technology. Its ballroom alone has 18 GigaSpeed drops, eight fiber drops and 100 telephone drops; there's also a mobile rack that can be configured with up to 640 data drops.

The ballroom has enough electrical power to run a small city, hotel executives say. The hotel also has wireless Internet access. The entire hotel system was developed with Advanced Data Networks; Avaya, the telephone equipment arm of Lucent Technologies spun off this fall; Dell Computer; Sun Microsystems; and Vanion.

"We went to Avaya and said, 'we want to dream dreams, we want product consistency and we want something that is good for the next 10 years,' " says Bill Dougherty, the general manager at the Westin Westminster.

The Westin Westminster's $1 million investment started to pay off the first week the hotel was open, Dougherty says. The National Credit Union Administration moved its 1,000-person, nine-week-long training session from the Westin Tabor Center in downtown Denver to Westminster, Colo., to take advantage of the high-tech offerings. Still, Dougherty has found that the hotel offers more "gee-whiz stuff" than many guests have ever encountered.

For each tech-savvy group such as the NCUA, there are several to which Westin Westminster staffers have to explain all the bells and whistles. "The average meeting planner says, 'I've never had all that,'" he says.

On Command, too, says the vast majority of guests aren't hooking up at high speeds.

"The buy rates have slowly increased, and usage seems quite price-inelastic," Simpson says. "We're not seeing [high-speed access] is huge right now. Maybe it never will be."

LodgeNet's Klebanoff also believes the short-term outlook for hotel broadband is not bright. Connecting rooms at high speeds is "hugely expensive," he says, with costs ranging from $350 to more than $1,000 per room, not including the cost of T1 service to the hotel. And most travelers can't tie into company computer systems yet, because the use of VPNs is still rare.

As VPNs increase, as more hotels are built with Category 5 wiring and as more travelers become used to bringing Ethernet equipment with them on the road, broadband demand will grow, too, Klebanoff says. "This all takes time," he says.

Others agree.

"You're going to see the curve going straight up," analyst Kagan says. "The hotel business is very competitive, and this is a no-brainer, especially for your best customers -- business travelers." Broadband is so pervasive in offices that employees suffer from withdrawal when they travel. "They go on the road and have to go back to their dial-up modem, and that stinks," says Eric Rasmussen, a senior consultant at TeleChoice, a consulting and analyst organization.

Rasmussen speaks from experience: On one business trip, he fell asleep while waiting two hours for e-mail attachments to download on a conventional modem.

The pool of potential hotel broadband users grows every year. In 1999, 43.9 million Americans traveled for business, a 14 percent increase since 1994, according to the Travel Industry Association of America. The average business trip was 3.3 nights long, according to the TIAA, with most travelers staying in hotels.

Travelers' Internet usage has increased 200 percent from 1996 to this year. And hotels often find that laptop use can overload and jam a hotel's private branch exchange system, especially when a facility is hosting a large convention.

Such statistics helped convince Wingate Inn Hotels, a 4-year-old chain catering to business travelers, to equip its entire 100-hotel chain with Category 5 wiring and to provide free Ethernet service in every room. "If you don't have it, you're going to lose business," says Michael LaCosta, spokesman at the chain, which is a unit of Cendant in Parsippany, N.J.

The chain has seen overall Ethernet use grow from 8 percent in April to 15 percent in September; a few of its hotels in high-tech cities report use rates as high as 35 percent, LaCosta says.

Companies that specialize in hotel broadband systems use a variety of approaches. Two of the largest players are STSN and CAIS Internet, a Washington, D.C.-based company that delivers broadband to airports, convention centers, cruise ships, hotels, office buildings and public kiosks. LodgeNet Entertainment and On Command, both hotel entertainment giants, have moved into hotel Internet access as well.

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