INTERNET SERVICES IN THE GUEST ROOM

This article is, of necessity, somewhat technical. But, it should give the Manager a conceptual understanding of the subject while still providing enough information for the systems people to further develop these concepts to meet the unit's specific requirements.
I was recently sitting next to a hotel management company executive who told me that he is negotiating with his in-room entertainment suppliers to provide Internet access for his guest rooms. We have been reviewing the need for upgrading hotel wiring and networks for the last year. This time we will take a look at this TV set approach to providing Internet access and see what it means and then discuss some alternatives that might be considered if this method is used.

WEB TV

Probably the simplest way for hoteliers to offer Internet services to guests is through the television set using a WEB TV "type" product. WEB TV is a copyrighted product name for a specific device. Other companies are, however, also offering similar products. I will use ITV (Internet television) to refer to these products generically.
ITV products consist of a small computer with a dedicated graphics based software package that loads whenever the device is turned on. This software package essentially a WEB browser like Microsoft's Internet Explorer or Netscape's Navigator. Also in the package is a relatively fast modem that runs at a maximum speed of 28.8 or 33.6 thousand bits per second (KBPS).

Using one of these devices means that one of the telephone lines in the room will be tied up whenever the guest is using the system. As a result, the guests will not be able to make or receive calls unless a second telephone line is installed in the room. Moreover, those hotels who use call waiting will have to disable this feature to prevent the Internet calls from being disconnected when the ITV modem hears a call waiting tone.

Probably one of the most important issues relating to ITV service is its impact on telephone equipment and service costs. ITV should be viewed as an entertainment vehicle, not just a business tool. It will not be unusual for guests to spend an hour or more using the service, in addition to any other phone calls that they may make. As a result the need for local telephone lines for Internet access could easily double or triple adding $2 to $6 per room per month in telephone department operating costs. An additional $1.50 to $2.25 per month in maintenance charges will also be incurred for the second lines in the guest rooms.

In most parts of the country, hotels charge a single fixed amount for each local call ($.25 to $.75) made by a guest. This type charge will not begin to cover the capital costs for the additional telephone lines (~$300 to $500 per room) and ITV devices ($300 to $700 each) or ongoing operating expenses for trunks and telephone system maintenance. As shownbelow, the capital and operating costs for this services can easily equate to almost $45 per room per month.

In areas like NYC and Los Angeles where hotels often bill local calls an a 'usage' basis, this might be a profitable product without enhancements.

One solution to the trunk problem, also provides a revenue opportunity. Install a WEB server in the hotel and connect the ITV devices to the internal WEB server where the hotel can include its own advertising as well as selling space to other local merchants.

The WEB Server can then be connected to a local Internet service provider on a high speed connection. Products that make these connections can also include a 'call accounting function' that lets the hotel bill guests for the time that they spend outside the hotel on the Internet. Once connected in this manner, the same WEB Server can also be used as a "Home Site" for the hotel's Internet advertising and links. Revenues will accrue from:

• Guest billing
  
• Sale of advertising space
  
• Room and service sales over the Internet.
  

Within two to three years, however, expect ITV devices to be replaced by Java based network computers that give PC capabilities and high speed Internet network access to guests.