ENTERPRISE COMMUNICATIONS

This is a broad topic worthy of a few books, except that by the time that a book can be completed the subject matter has changed. We will cover a few broad topics including hotel related networks and the impact of rapidly changing client expectations resulting from the telecommunications technology revolution.

The hospitality based enterprise has four specific communications requirements:

• Within the hotel
  
• Among the Hotel and its External sales entities, like reservations systems and travel agents
  
• Between the hotel and its real and potential clients, guests and service suppliers
  
• From the reservations provider to the hotels potential clients and guests
  

HOTEL ROOMS ARE BECOMING COMMUNICATIONS SYSTEM MUSEUMS

Guest communications requirements are rapidly changing, even if the supporting hotel services are not. Travelers are overcoming the shortcomings of hotel communications by bringing their own services with them. In a sense, technology is passing by hotel operations, moving to a level where the hotel does not support a function, the guest provides his own solution. The solutions, however , like portable computers and cellular telephones are expensive for them to use. But, they are consistent and reliable. Moreover, even after many years of deregulation, many guest complaints still abound relating to the lack of the simplest of communications tools, the "modular" telephone jack in the guest room. Adding to guest options, the rapid emergence of cellular data services is laying the foundation for the guest to totally bypass the hotel communications systems. Unless hotels wish to see their major telecommunications investment turn into a giant intercom, used only for calling room service, action must taken to make their communications services cheaper and more functional than those brought by the guest.

DRAMATIC CHANGES IN CORPORATE NETWORKS, RESTRAINED BY THE PAST

The growth hotel industry technology has been based on the premise that a major portion of rooms business is generated by guests 'calling' to a central reservations number, with the resulting bookings being forwarded to the hotel. The rapid growth in public use of data communications, called Internet is changing the whole aspect of how rooms are sold and who sells them. Corporate networks have been based on a single computer center controlling essentially all of the information being passed within the organization and to its suppliers and clients. The Internet allows the current 40 million adult US Internet users of the service to connect to anyone that they want. Guests can shop directly with some hotels, at Corporate WEB pages, through travel services, like Travelocity ("Powered by Sabre").

Many people like this approach because they can often see what they are getting (picture of hotels and rooms) and they can choose their own packages without feeling pressure to make a decision. Remember, when their communications costs are fixed, consumers effectively consider these transaction to be 'free'. Highlighting these changes, an IS executive at one of the major hotel chains told me that they are seeing huge growth in traffic from their airline connections. The airlines are the ones providing the most comprehensive consumer and travel agent support. Individual hotels and their brand owners offer rooms through the Internet, but, travelers need plane reservations first. Once on that system, they are also offered options to book rooms and rental cars - no need to go to a hotel page. Travel agents are also boosting traffic because they are being given more information, through their airline connections, to assist with the quality and speed of their hotel room sales. They are, however, paying higher fees for these capabilities and they are in direct competition with the 'do it yourself' approach of the Internet.

The transition is just beginning to a future that places the central computer system at the hub of a very different network. The transaction processor will remain but it will be connected to many different delivery networks, each with its own cost structure. Like the airlines, hotels pay significant fees to parties participating in room sales. Hotels who can effectively sell their services with fewer intermediaries will have a financial competitive advantage.. Effective is the key word. You want to sell all the rooms available, when that is achievable, using all sales channels, then the focus turns to cost of sales, and, changing the channel mix to reduce costs while maintaining the occupancy levels. Internet based sales and partnerships within the Internet community will foster this approach. Both the hotel and the associated Brand will have to participate in this evolution. Moreover, just like consistency in room presentation is critical, WEB pages should have the same 'look and feel' so that Internet callers are comfortable moving between a brand's hotel pages.

The Internet also offers a new heretical concept that cannot be effectively delivered through traditional methods - virtual branding. Contracts notwithstanding, a hotel could have different brand WEB pages for the same property and allocate its inventory according to the effectiveness of brand sales.

What to do??? The concepts are relatively clear, but the underlying infrastructures and sales methodologies will be changed dramatically. Hotels are investing in new internal wiring and distribution systems as well as in-room technology. Corporate groups are rethinking how they deliver information to potential clients. Airlines are reaping big rewards by delivering deals to clients and NOT waiting for them to ask!

1. Hotels must establish services that are more cost effective than those that the guest brings with him:

• HIGH speed communications access through room devices, i.e. local area network access to T-1 connections,
  
• Cellular guest room telephones or personal digital assistants that guests use as their voice, data and e-mail communications hub.
  

2. Corporate systems must focus on new delivery methods and on fostering approaches that minimize sales expense:

• Use "push" technology like Pointcast to deliver information and special 'deals' to selected clients,
  
• Promote the most direct access method to the true product seller,
  
• Develop consistent content standards and actual delivery of information for each brand,
  
• Offload as much customer interaction as possible to each hotel's site. Central reservation system computers should provide the glue that links all of the properties, but, they do not have to conduct all of the transactions