High-speed Internet access in hospitality 2003

March 09, 2003 |

Many hotels, even some properties with significant business travelers, do not yet have high-speed Internet access available in all guestrooms.

by Chris Hartmann

Many hotels, even some properties with significant business travelers, do not yet have high-speed Internet access available in all guestrooms. Although usage continues to increase, paid access is still below 10% with free access only attracting 20% or so of guests. With business travel in decline, Internet access may seem less important, but there are several reasons why this is not the case. Firstly, there is a core group of executives, some, but not all in technology companies, for who e-mail and the Internet are indispensable. Without access, these travelers will not even consider your property. Next, communications technology is increasingly moving to the Internet. This includes everything from voice-over-IP (telephone conversations using a computer and Internet connection) to online business meetings to instant messaging. In my family, instant messaging among my children and their friends has far surpassed the telephone as their main means of communication. By comparison, cell phones are far more intrusive, are limited to one conversation at a time and even with caller-id, tell you far less about the caller and your desire to speak with them than the Internet-based channels. Finally, to people who use the Internet as the ultimate information and entertainment reference source, not having it available constantly is a tremendous hardship.

One of the other misconceptions about Internet access that prevents hotels from installing it is the notion that it will only get less expensive by waiting. It’s certainly true that the technology equipment, from cable to hubs, switches and routers will continue to drop in price. But already cat5e cable is below 10 cents a foot, while the per-port (single-wired connection) hardware cost can be as low as $10 and certainly not above $50 for the most expensive. That brings material costs per room from $25 to perhaps $100. I will talk more about alternatives like DSL/LRE and wireless, but for a standard wired room, the majority of the cost for wiring is in labor. Any decrease in materials will likely be offset by an increase in labor costs and both are likely to be far smaller than the lost revenue, either for paid connections or additional business, by delaying installation.

Glass, copper or air?

You are now no doubt convinced that it’s time to get this going in your boutique, but as yet inaccessible (to cyberspace), hotel. The next question that often comes up is “wired or wireless?”. Wireless access makes a lot of sense in common areas, including meeting rooms and F&B. In the guestroom, it’s a trickier question. Wired is almost always more expensive, even for a new property. However “piggybacking” the Ethernet connection on existing phone lines may save some money. Wireless connections are susceptible to interference, and they can be more easily “hacked”, although major wireless providers are equipping their networks to make this much more difficult if not impossible.

Wired connections can be built in one of three major ways. The first is with glass (fiber optic) cabling. The second is copper (cat5, cat5e or cat6). The last is using existing phone lines, either shared with a phone line or unused (DSL, LRE). New copper wiring provides the most expansion capability at a reasonable price. Cat5e and cat6 wires can run at 1 Gigabit/second. For perspective, consider that most networks in an office use a speed of 10 Megabits per second and this “Gigabit Ethernet” is 100 times faster. If the hotel has a full T-1 connection to the Internet (at a cost of $500-$1,000 a month), the Gigabit Ethernet connection is over 600 times faster. Fiber optic cable is more expensive than copper, more expensive to install and requires far more expensive network equipment. The only reason to use fiber would be to connect two locations where there was very high electrical interference between them, as glass is not affected by such interference. Wired Ethernet also allows other devices, such as video servers, thermostats, minibars and lights/appliances to communicate on the network.

DSL and LRE (LRE is Cisco’s version of DSL and stands for Long Range Ethernet) and similar technologies use special equipment that compresses Ethernet signals to allow a single pair of phone wires to carry data, even with a simultaneous voice (phone) conversation over the same wires. Although such data transmission is slower than a dedicated wire, it is more than adequate for an Internet connection or even “video-over-IP” now being used by some in-room entertainment providers. As you would expect, the equipment for these connections is more expensive than standard Ethernet equipment.

Wireless connections come in three main “flavors” at the moment. The vast majority of wireless devices use a standard called “802.11b” or “Wi-fi”, which permits fairly high-speed wireless connections (about the same speed as a basic wired connection of 10 Megabits/second). Recently a new version called 802.11a has begun to gain usage. These connections run about five times faster but the transmitter (called a WAP for wireless access point) and receiver (the computer or PDA) need to be closer together than Wi-fi. The effective distance of wireless connections depend on many factors and can even vary due to weather or outside interference. They automatically drop down to slower speeds when necessary though and even these slower speeds are plenty fast for Internet access. The third variety of wireless access is called 802.11g and is not fully a standard yet.

Some guests may have their own wireless PC cards or built-in laptop capability, but many will still need the hotel to supply the wireless device. Typically those are PC cards that fit into the laptop card slot, however they often require software (called drivers) to be installed on the guest’s computer. Although the providers who provide such access specifically to hotel guests often provide automatically installing cards, there is still software being loaded onto a guest’s computer that may subject the hotel to concerns by the guest. Besides a wireless card for your laptop, another way to connect to a wireless network is using a WEC or Wireless Ethernet Client (also called a wireless Ethernet bridge). These relatively new devices are actually 802.11b wireless receivers that have a standard Ethernet (wired) connection coming out of the wireless receiver. The advantage of these devices is that they require no special equipment to be installed on the portable PC and no software to be loaded on the guest’s computer Since a WEC has a standard Ethernet connection the computer connects to it just as it would to a wired connection. However some WECs need to be plugged into an AC outlet, unlike standard wireless cards that are powered by the computer.

Some additional considerations for wireless access are that wireless access points need both power and a wired Ethernet connection to function (though some wireless providers can supply power to the access points using the same cat5e data cable). In addition to the distance limitations, a single wireless access point can only handle a few connections simultaneously so putting one WAP in a room with 25 computers connected to the Internet is likely to yield poor service levels. Finally, while it’s easy to tell in which room a guest has plugged in their computer, it’s not even possible to distinguish a guest from a visitor when they connect wirelessly. This requires that wireless users (including WECs) use a password or credit card to gain access (unless the hotel does not charge for the service and doesn’t mind non-guests using the facility).

In choosing between wired and wireless access in the guest rooms and meeting rooms, you should consider cost, convenience, security, likely future uses and lead time.

Free for all or charge ahead

Current practices for guestroom access range from free Internet for everyone, to “slower speed” free, to loyalty program members free, to $12.95 a night. Meeting room Internet access is almost never free and generally costs $100 - $500 or more per room per day. There are pros and cons to each approach. Since completely free Internet access will have many more guests using the service, it will actually decrease the value of the service because at the end of the line (T1, DSL or Cable modem) everyone is sharing the same “pipe” to the Internet. Most guests who have a true need for Internet access do not mind paying a reasonable amount for that access, but certainly at a business property with a fairly high ADR, a small increase in room rate will more than make up for incremental revenue and is less likely to make guests feel “nickel and dimed”. A key capability regardless is being able to ensure that Internet access is up and running at fairly high speed at all times. This requires someone monitoring the connection and ideally a way of automatically limiting any one guest from using all the available Internet bandwidth. Finally, since the Internet connection can be used for everything from accessing illegal materials to providing copyrighted content to others, a hotel may want to consider using a third-party service provider who can limit the risk of a guest abusing this amenity. At the very least, the hotel should require the guest to acknowledge certain terms and conditions that specify the risks the guest is taking and acknowledging that the hotel cannot protect the guest from dangerous, illegal or malicious content or guarantee the privacy of their access.

Do you know the way to San Jose?

We touched briefly on how the hotel gets connected to the Internet, but we’ll take a bit more in-depth look at that question now. The main method is called a “T-1 line”. This line is a dedicated wire running from the hotel to the Internet. The rated speed is 1.5 Megabits (1.5 million bits per second). Since a data T1 is expressly for Internet access (T1s are also used for 24 voice telephone lines) they are by far the most reliable Internet connection. The offsetting factor is the cost which ranges from $500 to $1,000 a month. These costs are likely to continue to drop along with other telephone costs. Some hotels may want to consider a fractional T1, which can be anything less than 1.5Mb or can be shared with some phone lines (for example, 12 phone lines and 750Kb Internet access - ½ a T1- can run over the same T1 line). DSL connections, also available from the phone company are essentially fractional T1 lines and come anywhere from 192Kb (1/8 of a T1) and up. Business DSL lines can be either symmetrical DSL (SDSL), meaning they send and receive data at the same speed, or (like a home DSL line) Asymmetrical, (ADSL) in which case they receive data at a much greater rate than they provide it. ADSL is not recommended for guest connections because it is both less reliable and often will not allow a secure connection back to the office (called a VPN or virtual private network).. Cable modems provide a third connection method, and they generally run faster than even a T1 at a fraction of the cost. However that speed can vary depending on the number of other locations sharing the cable line and they also generally do not support VPNs. DSL and cable lines can range from 64Kb up to 7Mb (5 T1s); however, speed and uptime are usually not guaranteed as they are with at T1 line. In addition, the maximum speed of a DSL line is limited by the distance between the hotel and the other end of the DSL line; which is not something the hotel can control at all. If your hotel has a lot of government, medical, financial services, large corporate or technology business guests, a VPN will be very important. Make sure your Internet provider and firewall supplier both allow for VPNs.

Security

A final consideration for guest Internet access is security. Although “switched” networks (which most newer networking equipment uses) have some inherent security, there is generally little reason to have guests and employees sharing the same network or even Internet connection. For one thing, you may want to monitor and restrict employee access to both the Internet and e-mail, whereas that’s not appropriate for guests. ADSL and cable modems are OK for administrative access, especially with a network server appliance managing a couple of connections. Both networks should be protected with a device called a “firewall”, which makes it more difficult for malicious Internet users to attack or infiltrate computers within the hotel. Employee firewalls can also be used to ensure that viruses are not introduced into the network where that is left up to the individual guest when using the Internet in a hotel. VPNs provide an additional layer of security.

Conclusion

High-speed Internet access is not going away, nor is it getting less important to travelers. There’s no question that it will be as expected as a telephone in the room is today at some point. For a property with no existing wiring infrastructure, the time from concept to operation can easily exceed six months. Even for a pre-wired property, finding an equipment provider, ISP, installation company, and support source, finalizing configurations, and negotiating prices and contract terms will require at least three months from start to finish. Deciding whether and how to wire, who will provide the service, and what features will be available are not decisions that should be made in haste. This means that if Internet access becomes a standard feature among your competitive set or you want to distinguish your property in this way, planning needs to begin sooner rather than later.

Chris Hartmann - Chris Hartmann is Managing Director for the HVS Technology Strategies division of HVS International.