There’s been a huge rise in guest expectations regarding in-room technology over the past few years, but these expectations aren’t exactly focused on any specific,wow-inducing gadgets; it’s really all about faster, stronger,more reliable Internet connectivity. Today’s hotel guests are now very likely to arrive with at least three of their own devices on hand (a tablet, a smartphone, perhaps a laptop, too) and an expectation that they’ll be able to reliably connect all of those to the Internet in their guestroom at the same time.
“We are a society today that has to be connected 24-7,” says Mark McBeth, VP for North America IT Operations at Stamford, Conn.-based Starwood Hotels & Resorts. It’s no longer just the millennial generation or business travellers who need to be connected, he says — it’s absolutely everyone. And there’s now an “insatiable thirst” for bandwidth, something McBeth has seen increase exponentially over the last three years. “We’ve basically seen a 100-per-cent increase on bandwidth minimums, year over year,” he says. This is a natural offshoot of the fact that guests are now using their own devices to stream video and music over the Internet on a regular basis.
“Up until about three years ago, we didn’t even have the capability to connect more than one device ‘per pay’ — where it’s free, we didn’t have that problem, but at properties where you pay for Internet, you would pay once but then have to pay again for your next device. So all of our service providers now must have the capability of allowing a minimum of three devices to connect,” says McBeth. Some Starwood properties’ existing service providers have had a hard time making that shift, but, as McBeth points out, this is Starwood’s new brand standard, so they don’t have a choice — they have to figure it out. “And if they can’t do that, they could lose the deal.”
Of course, higher bandwidth usage affects the hotel’s costs. “It’s similar to what we’re seeing with all technologies as they evolve and grow — as bandwidth requirements go up, bandwidth costs have also gone down,” McBeth points out. “So [the amount of bandwidth] we used to get for a thousand dollars a month, now you’re getting triple that for the same price. So the cost has indeed gone up, because we’re having to provide more and more bandwidth, but the cost of bandwidth has come down quite a bit.”
That said, many hotel brands, particularly in more upscale segments, charge a daily rate for Internet usage to offset the costs. Starwood, for instance, typically charges for Internet at its upper-upscale and luxury brands (such as the Westin, Sheraton, Le Méridien and W) — with fees ranging from $9.95 to $14.95 per 24-hour period, depending on the brand and property. (Platinum members of the Starwood Preferred Guests program get it free at all properties.) It offers free Internet at its “specialty-select” brands (Element, Four Points by Sheraton and Aloft). At the specialty-select properties where it’s free, the quality tends to be “a mixed bag — sometimes you get great performance and a great experience, other times it’s not so great; but it’s free,” says McBeth, who notes that the speed and quality of the Internet connection tend to be more reliable at the properties where guests are charged. “And, in the luxury space and the upper-upscale space, everyone is still charging.”
McBeth admits that having to pay for Internet is a common guest complaint, and this is the case at Starwood properties as well as throughout the industry in general. But since it’s the standard business model, especially in higher-end segments, Starwood is sticking with it for now. “We continue to charge for it, because people continue to pay. And, quite frankly, none of the [other] major brands have made the decision to give away Internet in the upper-upscale and luxury segment. When that day comes, we know the dominos will fall, and we will give it away for free,” he says. “But right now, it’s a revenue stream.”
Vancouver’s fashionable Opus Hotel, an independent boutique property, however, has made the decision to provide free high-speed Internet to all guests. “We offset costs by building it into the room rate,” explains Nicholas Gandossi, GM, who notes that rates start at $359 and go up from there. Overall, Opus has made a concerted effort to differentiate itself through its technology offerings. It is stocked with iPads and Samsung Galaxy S3 smartphones in guestrooms, and guests are encouraged to take the Opus devices out with them as they visit Vancouver. “We want people to take them off the property,” explains Gandossi. “Whether you are using Google Maps or you just want to see what to do in the city, it’s there for you without worrying about how to find a Wi-Fi connection at Starbucks.”
As for connectivity, when the Opus folks noticed the upsurge in bandwidth requirements a couple of years ago, they embarked on a project to increase the size of the hotel’s Internet pipe. “We recognized we not only needed to double it, we needed to triple it,” says Gandossi, estimating that it cost somewhere in the neighbourhood of $15,000 to make the upgrade. But he says customer satisfaction makes this worth every penny. “Internet speed is one of those things where no news is good news. People rarely say, ‘Oh, you have great speed,’ but they’ll definitely complain about slowness.”
At Marriott International, Inc., Scott Hansen, director of Guest Technology, echoes the thoughts of Gandossi and McBeth when it comes to the main priority: “Our primary focus is getting as much pipe into every hotel and to allow as many devices to connect as simultaneously as possible,” says Hansen. “The second priority this year revolves around guestroom entertainment. The traditional model that has owned the industry for the last 10 to 15 years has been video-on-demand — the $16 Batman movie, for instance. You buy that, and it subsidizes the cost of the equipment as well as providing revenue for the hotel. [But] we’re finding guests aren’t buying as much video-on-demand for obvious reasons: they’re bringing content with them on mobile devices, they’re finding content either stored or through online services like Netflix, and therefore the old model is not sustainable moving forward.”
Marriott researched existing alternatives and found nobody offered exactly what they were looking for, so they’re creating their own system with a technology partner. He points to four objectives of Marriott’s new entertainment model: “The first is an all-HD channel lineup, primarily focused on news, sports and weather…. Then the second component is an interactive program guide: a welcome screen and compendium embedded into the TV. The third component is what we call ‘over-the-top’ services — think Netflix, et cetera. The specific lineup hasn’t been determined yet, but you can expect some of the bigger players to be involved. And the fourth piece would be, ‘How do I connect my device to the TV wirelessly to project my own content?’ It’s a big endeavour.” The testing for this is going well, says Hansen, although he admits there are “a lot of unknowns.” They don’t know what the ultimate development costs will be, nor what the costs to individual hotels will be to implement it. But Hansen will say that it will be “minimally incremental to what [operators] pay today. I’m not going to say cost-neutral, but it isn’t going to be a significant financial sacrifice.”
Starwood has similar goals, exploring options for integrating content from guest devices onto the TV, for instance, as well as aiming to double the standard amount of HD channel offerings from 15 to 30 by 2015. Amid all these technological changes, however, McBeth stresses a practical philosophy that any hotel would do well to keep in mind: “At the end of the day, with all of this technology, the biggest point for the customer is this: stuff has to work,” he says. “Sometimes we over-complicate things and systems become so complex, with so many potential break points, that it can be a real challenge. But the bottom line is, it has to work.”
