Hear and Now

By George Koroneos, Contributing Editor | November 01, 2005

These days hospitality providers are swimming in an alphabet soup of acronyms, what with guests demanding everything from Wi-Fi to DSL Internet access. But now there's a four-letter word that is saving money for both the guest and the hotel--VoIP. Also known as IP telephony or Internet telephony, voice over Internet protocol is the process of taking a traditional phone and manipulating it so that it works over a broadband line, thereby eliminating the costs associated with long-distance calling plan and wiring installation. The actual VoIP signal only uses tiny portion of bandwidth freeing a hotel's Internet super highway of any additional traffic jams.

According to Gartner Inc., by 2007 97% of new phone systems installed in North America will be VoIP or a hybrid of VoIP and circuit-switched systems. Sales of PBX systems were expected to drop 32% in 2005. Analysts are also quick to tout the applications enabled by VoIP, a development operators view as a much-needed revenue opportunity. Administering conference calling on behalf of executive guests holds the most promise. Another is unified messaging, delivering all of a guest's email, fax and voice messaging to one display.

Last year, the Ritz Carlton in Sarasota, Florida (which boasts a 266-room hotel and additional bungalows and condos around the property) added a membership division consisting of 18 employees, but didn't have an office ready for the new hires. "Voice Over IP lends itself very well for setting up small offices that have no infrastructure," explains Dave Chin, IT director at the Ritz Carlton. Rather than run telephone and data lines to a makeshift office, the IT department installed a VoIP setup using an Avaya (avaya.com) switch and a single CAT 5 Internet cable wired to the office.

VoIP's best feature is the savings, according to Chin. "The entire infrastructure is handled in house," Chin says. "You don't need a contractor to pull telephone lines. The traditional telephone market is very labor intensive. They have to hire a whole host of people to install the network. But we set up these temporary offices in two days."

Expanding applications

The Ritz Carlton presently has VoIP enabled in all offices. However, when it came to wiring the beach club, the hotel ran into a snag. "We wanted to get a dial tone at the beach club, but we didn't want to buy another $200,000 switch," Chin says. Using the latest in microwave technology Ritz's IT crew was able to wirelessly send a signal to the beach club and connect it to the network at a minimal cost.

"Traditionally, if you want to connect two locations, you have to order T1 telephone lines through the phone company," Chin explains. "Phone lines, however, can get really expensive. You're paying approximately $600 a month for T1 access."

Microwave technology, however, is point to point. Using small satellite dishes the size of a TV dish, hotels can beam a VoIP line from one location to another. In addition, a typical T1 connection only carries approximately 1.5 MB of data, while this satellite solution can carry almost 45 MB of data. "The beauty of it is, once you install the system, you don't have to pay any additional money for the connection," Chin says. "All you pay for is the equipment. It would have cost over $1 million to run fiber cable for a traditional connection."

Shaner Hotel Group spent $3 million with AT&T to link its 23 properties and corporate headquarters via VoIP. The investment will pay off by eliminating the need to support multiple phone systems and by reduced calling costs among properties. While Shaner's monthly cost for data and phone services is fixed, the infrastructure will allow it to offer guests free or flat rate, bundled Internet and phone services, including unlimited calling, without variable costs for the hotel. Future uses for VoIP may include include call forwarding, one touch dialing, electronic guest services such as reservations and special requests and advanced hotel management functions.

Winning the hearts and minds

Management at the Langham Place Hotel, a 665-room, five-star business and leisure property in Hong Kong, decided to look toward the future by investing in a high-end data network with both wired and wireless high speed connection built directly into its infrastructure.

"IP technology gives us a competitive advantage that lets us grow our market share and stay ahead of the curve," says Brett Butcher, managing director for the Langham. "We believe we'll continue to win the hearts of business travelers who are technologically savvy. Our guests appreciate the speed and convenience this hotel provides."

Guests at the Langham are offered wireless Cisco (cisco.com) IP phones that can access an Internet connection from anywhere in the hotel. Wireless connections scattered throughout the hotel create a literal Wi-Fi bubble that in effect has turned the entire hotel into a wireless hotspot. Guests can use a plethora of features built into the phones such as short wave messaging and Internet connectivity.

While it's too early for the hotel to gauge the ROI in dollars and cents, Butcher says that based on exposure gained in the hospitality marketplace as a front runner in VoIP and wireless integration, the hotel has already made a handsome return on investment.

Hardware made easy

A hotel operator looking to go down the VoIP road might find the process of selecting a provider somewhat daunting, especially since the technology is relatively new. What is easy is the hardware connection. With voice and Internet running over one line, a property only needs to run one CAT 5 line to each room. VoIP-enabled phones are also available with a pass-through feature, allowing the hotel to wire a CAT 5 cable to the phone and then wire the phone directly into a laptop.

To make a case for implementing IP telephony, says Langham's Butcher, "First, you have to want to provide your customers with cutting-edge technology and understand the inherent value of this proposition in attracting and maintaining your clients. And second, you have to get close to what the technology can now offer and envisage what the future could hold." By migrating hotel services and legacy voice systems into a converged Cisco IP infrastructure, the hotel is already set for any future upgrades.

For example, some higher end hotels in Las Vegas have integrated the technology further by patching the cable into a set-top phone unit in each room with a touch screen display that acts like a concierge for guests. On the display, guests can access dining information, check-in/check-out, or even listen to music.

IP telephony, however, isn't the end all in communications. Because the signal relies entirely on computer-driven technology, the rate of failure increases significantly. The technology is also susceptible to power fluctuation, because it is being powered by the hotel. A standard telephone connection is powered by the central phone company. That said, most modern phones are digital and also can crash during power failure.

As the technology further matures, bugs and quirks inherent in with VoIP technology should decrease, while new features will continue to be introduced to the hospitality market. At the Ritz Carlton, Chin is now preparing for a full wireless rollout. Theoretically, guests will be able to lounge by the pool with their laptops wirelessly connected to the Internet, and talk wirelessly over the Internet using a VoIP headset unit featuring Bluetooth connectivity. Says Chin, "Guests will actually be able to do all their work while lounging poolside." How's that for convenience?

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