HITEC 2013 Special Report by HFTP

Table of Contents 7

Where There is Technology, There is Something New

A Look Ahead: Memo to Hoteliers

Distribution: The Rise of the Metamediaries

Distribution via Mobile: A Good Night's Sleep in the Palm of Your Hand

Business Intelligence: Building Strategy With Analytics

Green Technology: The Next Big Thing in Green Technology — None??

An introduction from the HITEC 2013 Advisory Council Chair By Ken Barnes

Advice for 2014 and beyond from citizenM hotels founding partner By Michael Levie An era in which giants in technology and media are entering the travel industry By Cindy Estis Green Customize your online inventory for optimal viewing and access via mobile devices By Sebastien Leitner Apply business intelligence to drive guest satisfaction, profitability and productivity By Menka Uttamchandani

Embrace energy efficiency to save much money and resources By Naomi Stark

Globalization: Go Local As You Grow Global

Future Technology Architecture: PaaS — One Central Hub, A Wide Selection of Apps

Beyond a one-for-all digital marketing strategy, customize for regional markets By Bill Bernahl

A model that allows other companies to build on top of a base architecture By Terry Prime

BYOD: Applications to the People! Rethink Your BYOD Strategy

Mobile: The Next Major Innovation Cycle — Mobilizing the Internet

Mobile: Consider Customization

Flashback: Internet Telephony, It's On The Way

Develop a policy based on the applications and data employees need access to By Ken Smith, CISSP, CISA, CCSK Leverage Wi-Fi networks to engage and provide value to guests By Bob Friday

Bring mobile apps in-house for a data secure tool connected to the central CMS By Thomas Castleberry, MBA, MCSE, MCSA, MCT, MCP A look at a past trend with an article from the June 1998 issue of The Bottomline By Edwin Pemberton, MHS

© Copyright 2013 by Hospitality Financial and Technology Professionals; Austin, Texas. All rights reserved. No part of this HITEC Special Report shall be reproduced or transmitted in any form by any means, electronic or mechanical; including photocopying, recording or in any information or retrieval system, without written permission from Hospitality Financial and Technology Professionals. HFTP® and HITEC® are registered service marks of Hospitality Financial and Technology Professionals.

HITEC 2013 Special Report

HFTP

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SPECIAL REPORT STAFF Frank Wolfe, CAE Executive Vice President/CEO Frank.Wolfe@hftp.org Eliza R. Selig Editor/Director of Communications Eliza.Selig@hftp.org

HFTP's ProLinks Webinars offer a chance to engage and connect virtually with innovative thought leaders on the most relevant topics to the hospitality industry.

Jennifer Lee Advertising Sales / Director of Marketing Jennifer.Lee@hftp.org Steven Stout Director of Meetings & Special Events Steven.Stout@hftp.org

HITEC 2013 ADVISORY COUNCIL Chair Ken Barnes White Lodging

Free for HFTP members

Vice Chair Kris Singleton Cosmopolitan Resort & Casino Cihan Cobanoglu, CHTP, Ph.D. University of South Florida

Past topics include: • PCI Security Standards • Mobile Applications • Social Media Strategies

• System Selection • Data Security • Wi-Fi

Christina Cornwell Hilton Worldwide Cindy Estis Green Kalibri Labs Mark Haley, CHTP, ISHC The Prism Partnership, LLC Bryan Hammer, CHTP Starwood Hotels and Resorts Worldwide Bruce Hoffmeister Marriott International Edward Hopcroft Starwood Hotels & Resorts

Get Started Visit the Membership/ProLinks section of the HFTP web site at www.hftp.org to view the upcoming webinar schedule.

David Johnson, CHTP Washington Duke Inn & Golf Club Robin Koetje, CHTP The Hotel Group, Inc. James Lingle James Lingle Consulting Anna McFarland, CFE, CHAE, CHTP, CPA Global Hospitality Consulting Ian Millar, CHTP Ecole Hôtelière De Lausanne Allison Morris, CHTP American Casino & Entertainment Properties LLC Raman P. Rama, CHA, CHAE, CHTP JHM Hotels Richard Siegel Hospitality Upgrade Richard Tudgay Omni Hotels & Resorts Frank Wolfe, CAE Hospitality Financial and Technology Professionals Derek Wood Derek Wood Associates Ltd. Lyle Worthington, CHTP Horseshoe Bay Resort 11709 Boulder Lane, Suite 110 • Austin, TX 78726–1832 +1 (512) 249-5333 • (800) 646-4387 • Fax +1 (512) 249-1533 www.hftp.org • www.hitec.org

HITEC 2013 Special Report

Where There is Technology, There is Something New The HITEC Special Report highlights the direction industry trends are moving toward. The curse and blessing to having a career in the technology industry is that there is always movement towards change. While this makes our day-to-day responsibilities far from routine, it also makes it a challenge to deploy technology solutions in an efficient, secure and reliable manner. As technologists we have to balance the flash with the useful, and discern what solutions will have real long-term value. And that's where HITEC comes in. Every November the HITEC Advisory Council gathers to set the HITEC program for the following June with the goal to build a framework that offers a candid look at hospital-

Ken Barnes

ity technology. To set the agenda, our group, with diverse experiences,

HITEC 2013 Advisory Council Chair

has a thorough discussion on what issues are important to our industry. This includes for the education program, as well as in this Report. While the topics might be familiar, the difference is that there is always progress, the details of which you will read in the pages that follow. We hope you will find this useful and thought-provoking; helping you get a picture of where hospitality technology is headed. Iâ&#x20AC;&#x2122;d like to thank the authors who have volunteered to share their knowledge within these pages, as well as the members of the Advisory Council for their assistance with this project. A special thanks goes to council members Lyle Worthington, CHTP and Edward Hopcroft who helped review the submissions. While HITEC has run for 40 years, it is the ever-evolving technology discussion that continues to bring us back year after year.

Ken Barnes is vice president of IT for White Lodging based in Valparaiso, Ind.

HITEC 2013 Special Report

TECH TRENDS

A Look Ahead

A Memo to Hoteliers By Michael Levie

As a founding partner of Netherlands-based citizenM hotels, Michael Levie is known as a maverick in the technology field, mirroring the reputation of the company itself as a breed apart. Heading the group’s operations, he has taken an unconventional approach to the industry’s many technology challenges. Publication The Hotel Yearbook asked him what advice he would give to his counterparts around the world for the year 2014 and beyond.

he impact of technology on the hospitality industry is significant; I guess we all agree on that. It hits us from various angles, falls into clearly different categories, and as our guests are getting spoiled at home, they expect the same from us hoteliers. In-depth technology knowledge is needed these days to stay up with all the changes and new opportunities. So how can we hoteliers deal with them adequately, make our hotel lives simpler and have an appropriate answer to the new, high-technology demands of our guests? First, become aware and have a clear view of how many systems and different pieces of software we operate, are adding and are allowing to complicate our hotel system’s structure. Just because it is offered by vendors, or available against OPEX conditions, doesn’t mean it adds to the (guest) experience. Second, break down the main hotel technology providers into possibly three areas, and have them subcontract all other (sub)services. SaaS systems and remote access allow for total outsourcing and major savings. Reducing to three vendors gives you three first-line support contact points, thus a strongly simplified technology landscape and staffing requirement. So which three areas are we talking about?

1. Hotel systems: SaaS offering PMS / CRS / CRM functionalities, with subcontracted services like POS systems, kiosks and more.

Michael Levie is a founding partner of Netherlands-based citizenM hotels, and heads the group’s operations. Levie has worked for various international hotel chains including Sonesta International and NH Hoteles, which took him to assignments all over the world.

HITEC 2013 Special Report

A Look Ahead

2. Smart rooms and building systems: IP-based in-room technology converging over central networks are a solution for providing the latest and most flexible offering. This can include in-room content, or door lock technology and more. 3. Internet: This goes way beyond our Web and mobile sites, but rather addresses the fact that it is integral to our way-of-life. This field calls for experts way beyond our industry and is a must to educate yourselves about. And then there is demand management, which is the combination of channel management, distribution, revenue management, Internet transparency (concerning both rate and online reputation), and of course the macro and micro influences of the market. Dividing these tasks up among different departments, i.e. not bringing them together in one P&L top sheet line item (“distribution costs”), is asking for trouble. Yet 95 percent of the industry is set up this way. To make a quantum leap, you need a shift in mindset. And after years of tough recession, when we have become concerned about the financial impact of what we do, not acting will only make things worse. So get educated; ask for help from professionals; admit to what you know — and more importantly, what you don’t know — and stop being led by vendors.

Legacy should mean taking a new look at current possibilities, thinking of security, thinking of short-term and long-term flexibility and first designing where you would like to be next. Only then should you look at what you have and create the bridge, operationally and financially. In our hotel industry, only a few companies can afford great and up-to-date CIOs who function crossdivisionally and form part of the top of our organizations at board level. Most have tech-savvy individuals who have been promoted up from within the organization, and who advise senior management on the future. Often they only have (operational) experience to draw upon, and are hardly (or not at all) capable of providing vision. So my advice is not to take all of this lightly; to get support from experts from outside your organizations; to get the base education yourselves and lead this process — which is a vital one for the future success of your companies. No, you don’t need to know it all, but rather just enough. Keep in mind that our guests are totally spoiled everywhere, and we won’t get away much longer with what we have managed to get away with so far. Waiting is not an option. ■ Article provided by Hotel Yearbook, a compendium of high-level insights and ideas about the future of the global hotel business. A special edition on hotel technology will appear in the summer of 2013 at www.hotel-yearbook.com

HITEC 2013 Special Report

TECH TRENDS Distribution

The Rise of the Metamediaries By Cindy Estis Green

An era in hotel distribution when some of the giants in technology and media are entering the travel industry, creating a new category of intermediary, many with metasearch capabilities.

otel distribution continues to evolve as consumers tap more kinds of online content on their path to a hotel booking. For the last 10 years, there were online travel agencies (OTAs) and hotel brand sites. Those were the primary conduits for electronic hotel bookings and that is where marketing resources were applied. In the last 12 to 18 months, there has been a wave of development responding to consumer demand for a more refined search process and better intelligence on the travel and hotel options. Google Hotel Finder emerged as a hotel-specific search engine and had a companion in the Google Flight Search tool, all part of what has been called travel “metasearch.” The notably inefficient process for consumers to visit seven to eight sites1 (or more) in the run-up to a hotel booking flies in the face of Google’s goals for search. Honing in on the need to streamline and enhance the travel shopping process, Google then removed all consumer reviews from its site, except those reported on Google directly, and announced the acquisition of Frommers Travel Guide, undoubtedly to enrich their travel content. Although Kayak has been the goto place for travel search for many, with the longest tenure and dominance in metasearch, Google’s foray was followed in the last two to three

Cindy Estis Green is CEO and co-founder of Kalibri Labs, a company that offers analytics solutions that enable hotels to measure and monitor business mix and the resulting contribution to operating expenses and profit. A 35-year industry veteran, she is the co-author of the industry bestseller, Distribution Channel Analysis: A Guide for Hotels, published by the HSMAI Foundation and AH&LA. Estis Green is also a member of the HITEC Advisory Council and an inductee to the HFTP International Hospitality Technology Hall of Fame.

HITEC 2013 Special Report

Distribution

years by many start-ups such as Hipmunk, Vayama, Adioso and Simple Honey. In response to this phenomenon, the online travel agencies (OTAs) have been highly motivated to improve search as they compete with metasearch sites to simplify the traveler's shopping experience. The original benefit delivered by the OTAs to make a wide range of inventory available for any given destination was essentially a type of search engine, but it could be quickly supplanted by the metasearch engines if they don’t come up with a more compelling offering. After all, the almost $2 billion spent in search marketing by the top two OTAs confirm that consumers will usually start with a search engine before reaching an OTA; and if their needs are met to view most of the hotels in a destination, they may not have a need to make that OTA visit. To this point, by early 2013, Priceline announced the $1 billion acquisition of Kayak; and Expedia, for similar reasons, acquired Trivago, a German-based metasearch engine.

New Players in the Travel Market Concurrently, consumer’s appetite grew for rich media like video and photos, along with social media content such as consumer reviews. Consumers increasingly seek interaction with each other and with their travel suppliers that has led to the incorporation of more social components to many sites including Trip Advisor and its emerging competitors such as Hotelme (in collaboration with USA Today), as well as a sharp rise in consumer commentary on online travel agency and hotel brand sites. In late 2012, Facebook announced a management team dedicated to the travel vertical that is hard at work finding ways to connect hotels to those who have interacted with them on a Facebook fan page and the network linked to these consumers. Facebook has launched a beta version of their new social graph search tools driven by algorithms that find products and services similar to what a consumer’s Facebook friends “like” and travel is high on the industry list targeted to benefit from this search capability. Twitter is not far behind in naming a head of travel and targeting the lucrative online travel shopper. They want to leverage their high level of consumer adoption to create an advertising platform available to hotels and other suppliers to provide them visibility in the travel shopper’s path. All of these developments happened while mobile growth was skyrocketing. Every category: online travel agencies, hotel brands, search engines and social sites are diving into mobile to tap the unquenchable thirst of consumers who can’t get enough use out of mobile devices — smartphones, tablets and all the hybrids in-between. In the last year, Apple has begun deployment of the first phases in its iTravel patent which, when fully loaded, will include a full-service travel app allowing the user to make

Commissions, transaction fees and media costs will dominate marketing budgets going forward and the challenge will be to manage these relationships in a way that does not allow the value gained by the metamediaries to be at the expense of the value of the hotels on which they depend.

travel reservations, manage confirmations, check-in and control the in-room or on-flight experience. With the massive adoption of Apple mobile products, this app could be popular with consumers who will find the all-in-one, endto-end nature of it a great convenience. What is not clear is how Apple will tap into hotel content such as inventory and rates to facilitate the hotel room shopping experience and how their monetization of the app will affect hotel distribution costs. No doubt Apple will charge for all this convenience and the suppliers will be more likely to pay, not the consumer. We are now in an era in hotel distribution where some of the giants in technology and media have decided to enter the travel industry creating a new category of intermediary, many with metasearch capabilities. Although largely media-based as opposed to the original transaction model typified by the OTAs, they are sometimes referred to as metamediaries. They will serve as the gatekeepers: they will have the upper hand on what the fees will be for those using them to gain visibility and they will extract value from the hotel industry; in so doing, they will strengthen their own market caps and their hold on consumers. And the implications for hotels? Distribution costs are high and rising for the hotel industry. There is a limit to how much a hotel can pay to acquire a customer. Commissions, transaction fees and media costs will dominate marketing budgets going forward and the challenge will be to manage these relationships in a way that does not allow the value gained by the metamediaries to be at the expense of the value of the hotels on which they depend. ■ 1. Estis Green and Lomanno, Distribution Channel Analysis: A Guide for Hotels, (HSMAI Foundation 2012), page 133

HITEC 2013 Special Report

TECH TRENDS Distribution via Mobile

A Good Night’s Sleep in the Palm of Your Hand A By Sebastien Leitner

Customize your online inventory for optimal viewing and access via mobile devices.

ccording to the U.S. Department of transportation, airlines cancelled 78,862 flights in 2012, leaving millions of passengers stranded. Lucky for them, finding a last minute hotel room has never been easier thanks to apps and mobile web sites and the mobile devices that power them. Passengers on the 115,978 cancelled flights in 2011 were not nearly as lucky. Real time access to hotel inventory, enhanced by GPS, now enables hotels to pick up last minute bookings from stranded travelers, late night revelers, spontaneous vacationers and others who need a room on the fly and want the confidence that comes from having a confirmed booking in hand.

Optimize Mobile Offerings As branded and independent hotels attempt to find the budget and the means to develop their own mobile web sites and apps that work seamlessly across numerous platforms like iOS, Android, Windows, etc., and devices of varying sizes, smart revenue managers and the technical people who advise and support them might consider the following to optimize their hotel’s mobile offering:

1. Be where the shoppers are According to PhoCusWright’s February 2013 U.S. Mobile Travel Report, OTAs dominated the hotel booking segment claiming two-

Sebastien Leitner is director of hotel connectivity for Expedia® Lodging Partner Services.

HITEC 2013 Special Report

Distribution via Mobile

thirds of all mobile bookings in 2012. Furthermore, mobile leisure / unmanaged business travel gross bookings totaled nearly $7.9 billion in 2012, or 6 percent of the online travel market. PhoCusWright predicts this number will grow to $25.8 billion by 2014 and represent 18 percent of the online travel market. To give an example from our company's perspective, 30 million travelers have already downloaded Expedia group apps, and that doesn’t include the 140 mobile web sites in 70 countries and in 35 languages used by travelers worldwide. It’s safe to assume that affinity customers will check a brand’s mobile app first, but the unaffiliated, transient guest will turn to an OTA who can provide geographically relevant rates and availability, regardless of brand, plus the ability to book the room immediately.

The best mobile apps and optimized web sites, through end-to-end connectivity, place the booking in the hotel’s reservation system and the confirmation number in the customer’s hand virtually instantaneously.

2. Leverage Existing Resources The need for a mobile presence is well established, but standalone apps and optimizing a web site for mobile access drives incremental costs and is technically challenging. In fact, a recent study conducted by Mobiquity found that 35 percent of connected travelers would be less likely to book again with a travel brand after a slow, confusing or non-optimized experience, and that 52 percent of tablet owners and 60 percent of smartphone owners complained about sites that were slow to load. OTAs, specifically Expedia and Hotels.com, are investing the resources and are making great strides in developing best-in-class mobile experiences. While you’re developing your own mobile strategy and perhaps your company’s app, doesn’t it make sense to maximize your existing relationships and take advantage of the channels they’ve already put into place?

3. Make Inventory Accessible The dynamic nature of mobile technology virtually has eliminated the need for thresholds. Be sure your team is removing any barriers to potential bookings (including any “last room available” restrictions) and make sure that the hotel is set to accept reservations up until your property-specific cutover, but at a minimum until midnight.

4. Demand Connectivity Mobile platforms should provide both the customer and the hotel with real time connectivity — a confirmed booking rather than a reservation request. The best mobile apps and optimized web sites, through end-to-end connectivity, place the booking in the hotel’s reservation system and the confirmation number in the customer’s hand virtually instantaneously.

5. Optimize Content Travelers browsing on their smartphones want to quickly and easily see the information that is relevant to them: location, amenities, availability and rates. To optimize conversion, make sure that you custom-build your online content for smartphones based on your customer’s needs, relevancy and existing best practices. Conversely, shoppers using a tablet tend to behave more like those working from laptop or desktop computers. They want more in-depth content and great imagery. Your content should fuel their dreams and help them map out a plan so that they can book when they’re ready.

Go Forth No one doubts the growing scope of mobile technology. In fact, data from Morgan Stanley’s Mobile Internet Report projects more people will access the Internet globally on a mobile device than on a desktop by the year 2014. The decision for hoteliers is not if they should go mobile, but how to get there as quickly and cost effectively as possible. ■ • PhoCusWright. U.S. Mobile Travel Report. February 2013. http://www.phocuswright.com/products/4246 • Mobiquity. The Connected Traveler: Mobile Satisfaction Report. April 2013. http://www.mobiquityinc. com/our-ideas/white-papers/connected-traveler-mobile-satisfaction-report • Morgan Stanley. The Mobile Internet Report. December 2009. www.morganstanley.com.

HITEC 2013 Special Report

TECH TRENDS Business Intelligence

Building Strategy With Analytics By Menka Uttamchandani

Apply business intelligence to drive guest satisfaction, profitability and productivity.

ravelers everywhere have a myriad of hotel options and with the transparency of the market over the past several years, are well informed of not only the choices available through traditional hotel marketing channels, but also of previous guestsâ&#x20AC;&#x2122; unfiltered opinions shared via social media. Recent guest research showing guests less and less likely to return to the same hotel makes the market more competitive than ever. How can our industry understand what potential customers are looking for and then provide it? Business Intelligence (BI) can be a strategic key to manage enterprise information to enable us to make smarter decisions, allowing us to better understand our business and guests on both an individual and company or agent level. This deep business insight can drive revenues, manage costs and guide strategic direction. As clichĂŠd as it sounds, this can enable us to better market and book the right room at the right time at the right rate, increasing revenue, profitability and satisfaction â&#x20AC;&#x201D; both during periods of vulnerability and positive economic times.

In-house or Outsourced BI has been around in our industry for years, but in recent times has become further widespread with many more companies realizing its value to an organization. An important decision is whether to invest in this capability in-house or in partnership Menka Uttamchandani is vice president of business intelligence for Denihan Hospitality Group, which owns and operates boutique hotels across the United States.

HITEC 2013 Special Report

Business Intelligence

with a vendor, and depends on the size, type of hospitality operation, skill sets available, among other things. If feasible as an in-house function, there would be an internal dedicated team whose primary responsibility it is to consistently monitor, manage and analyze ever evolving data and opportunities, with actionable reporting and insight shared with a wide audience. If BI is outsourced, it is imperative to elevate this to a true partnership with the vendor, as in-depth knowledge of the operation and its business processes has large implications on setting up the business rules correctly within the data. Not doing this correctly can derail the best efforts, putting the credibility of the information on the line. Not as obvious, but critical, is the management of the data and database processes for repeatable integrity, timeliness, etc. of the data.

Gain a Competitive Edge Every hotel company has massive amounts of business and customer experience data; it is what one does with that data, such as providing relevant dashboards, click through deep dive reporting and analytical insight, which can give a company a competitive edge. Unlocking knowledge on data as varied as guest feedback (both scores and text comments), spend statistics, seasonal trends, expense metrics, loyalty indicators, etc., fosters a better understanding of the business. Account dashboards can provide the sales team with historic patterns and future on books / expected business for their accounts, which when compared to the hotel’s overall patterns and needs, helps them make considered decisions. Building an analytics-friendly culture within our organizations will allow client-facing management and corporate support teams with the data access and insight they need to take smart, calculated risks. Risks that grow the business and enhance the customer experience. Using a 24/7 available reporting portal, hotel revenue management teams can help predict booking behavior patterns. On a daily basis, they can estimate what room rate trends are likely to be, through what channel guests will book and for what length of stay, as well as the likelihood, timing and segment/channel of cancellations and no shows. This insight can boost productivity by up to 40 percent as these teams may spend up to half a day finding and collating this data, if not readily available. Using such reports to predict what business would come in when, enabled a Denihan hotel near the United Nations to run twice the average rate of the competitive set during a U.N. General Assembly week.

The Big Picture On the guest level, tapping into individual guest comments received can enable us to understand and deliver on

Unlocking knowledge on data as varied as guest feedback (both scores and text comments), spend statistics, seasonal trends, expense metrics, loyalty indicators, etc., fosters a better understanding of the business. specific customer preferences and analyze how our guests interact with our hotels. For instance, through customer data analysis, at Denihan we found outside noise to be the number one challenge across our 11 New York City hotels. In response, we launched a “Put NYC on Mute” campaign, providing earplugs in nightstand drawers in all guestrooms. An action that has improved guest satisfaction in that area. BI tools also allow a more rounded view of the guest by combining transactional, attitudinal and geodemographic and psychographic information on the guests. Such a profile viewed in context of guests’ feedback over the years can result in powerful intelligence to drive the direction of a hotel renovation, remodeling rooms to address specific needs of that guest base. For example, based on such feedback and guest profiling for Denihan’s Affinia Manhattan, we knew that we had to address the diversity of travelers that stay there (a balance of business and leisure, in addition to family and long-term stays). Using this information, Denihan remodeled the rooms to create areas that could be multipurposed: incorporating a relaxation zone, a work zone and a sleep zone; using stylish and comfortable furniture that could actually be used in a number of ways. Convertible sofas can be used by families, and mobile ottomans can be moved by the coffee table or by the bed depending on the need. All of these touches have elicited positive feedback from guests. Analytics can make a huge difference in the business decisions we make every day on many aspects, from pricing, segment and channel management, to customer insight and beyond. With 80 percent of new data created being unstructured and of increasing complexity, traditional analytics are no longer sufficient. It will be critical to embrace advanced predictive analytics capabilities, with data mining and text analytics finding buried patterns in the data, such as differentiating between causal and co-relationships. The benefits achieved will allow BI to provide us with hidden insights to facilitate growing our business profitably and better serve our customers — enabling a higher level of performance across our industry. ■

HITEC 2013 Special Report

TECH TRENDS

Green Technology

The Next Big Thing in Green Technology — None?? R

By Naomi Stark

It's not about the next new thing, but fully embracing energy efficiency to save much money and resources.

ecently I enjoyed a gorgeous spring Florida day. After an unusual week of solid rain, the sky was now as blue as can be. Looking left, right and forward, I was embraced by brilliant green grass carpeting that merged with lush green trees. Carefully manicured landscaping accented the beauty of this gorgeous day. As I soaked in all this beauty, I wondered, “Is all of this green actually all natural?” Mother Nature (as unpredictable as any female) is only consistently green with the efforts of humans. Irrigation systems and landscaping equipment maintain and sustain this beauty. Unpredictable weather patterns would leave this “green” brown much of the year without the effort of people and technology to balance it out. Therefore, if even Mother Nature isn’t all that “green” without technology and investment by human effort, how can we expect our industry to be “green” without effort and investment? The green topic has been an ongoing concern for a while now and still, many hoteliers continue to operate without — or at least minimally — green technology. Why? Is it because the technology doesn’t exist? No. Is it because we lack the studies, statistics, seminars or articles which prove the financial and social advantages for those who embrace green technology? No (you are reading this article after all). Reasonably, a definite challenge exists due to the many competing, equally legitimate,

Naomi Stark is president of Stark Service Solutions, LLC, which delivers customer service enhancement products to the hospitality and medical industries.

HITEC 2013 Special Report

Green Technology

priorities facing an industry with limited resources during a recovery from the less than fun economic times we all know so well. Could another legitimate factor be denial? Certainly. Not all, but too many owners, investors and operators still cling to the past: “Green is too expensive. It’s inconvenient. It can wait.” Eventually, reality catches up with denial. The unfortunate fact is that denial could cost some their operation if they don’t take advantage of financially sound green technology options available. When most of us entered the industry we didn’t have the options we do today. But that is just it, today the options are plentiful. That makes me wonder, who will be in business tomorrow? Will it be those managing and reducing their rising energy costs? Will it be those managing their water consumption? Will it be those who efficiently manage their labor costs and preventative maintenance programs with technology verses manual paperwork? The obvious answer is, yes. The current green technology trend in the hospitality industry is: fully embracing it. IHG and Marriot have been reaping significant financial benefits for several years from their aggressive green initiatives. Marriott International Hotels’ temperature management system reduced water consumption by 58 percent since 2007. They’ve reduced the number of servers in its server farm by 53 percent, a savings of $3.7 million. Holiday Inn’s (InterContinental Hotels Groups) energy-efficient lighting systems estimates a savings of $4.4 million, 52 percent reduction in kilowatt hours annually. Consider, if you are a branded operator, do you simply satisfy minimum requirements or are you looking for ways to stay a step ahead?

The Green Challenge Let’s address the first challenge: “Many competing, equally legitimate, priorities which face an industry dealing with limited resources.” (aka: "I don’t have time, I’m too busy!”) Fair enough. You have your hands full. Your budget is maxed and you don’t have the time to deal with anything other than the here and now. Got it. Have you considered a Green Coach? A professional whose specialty is assessing your current circumstances, your goals and your reality (budget, time, etc…), and who is up-to-date on all the newest and best options available for your hotel size and type? As an example, Cindy Beata, founder of Tec360 (www.tec360.org), is helping busy general managers and owners find immediate, affordable options that guarantee an ROI in a matter of months. Not selling any particular product, yet representing a diverse repertoire of proven industry options, Cindy and her team are matching the right products with the right hotels.

As for the second challenge preventing hotels from fully embracing green technology: Denial. Really?? Okay, if we must. I won’t attempt to change your mind by going on about the environmental social responsibility the hospitality industry has or the limited natural resources available or the exploding global population which will only add demand to the limited natural resources available. Simply consider the financial advantages your competitors have been enjoying: • Best Western Kelowna, Canada installs a solar hybrid water-heating system which heats up to 90 percent of the water for the their indoor swimming pool, two hot tubs and 154 guest rooms during the four summer months; in the winter the solar heating system can cover nearly 60 percent of the hot water heating with an estimated saving of $30,000 per year. http://www.bestwesternkelownahotel.com/green-info/ green-hotel-initiatives.html • Marriott implements improved dishwashing systems and supplies at properties in the U.S., bringing the total number of full-service properties using these systems to 153. “We estimate that participating properties have realized 4,200 fewer pounds of plastic waste, 4.25 million gallons of water conserved, 2.2 million kwh of energy saved, and 135,000 therms of natural gas reduced.” http://www.marriott.com/Multimedia/PDF/CorporateResponsibility/MarriottSustainabilityReport_2011 and2012condensed4MB.pdf • The Montage Beverly Hills, Calif., (Montage Hotels and Resorts), installed in their underground parking garage Carbon Dioxide (CO2) sensors and Variable Frequency Drivers (VFDs), allowing exhaust fans to activate only when needed, reducing the electricity required to run the garage ventilation system by over 85 percent — an annual savings of over 3.4 million kwh of energy (= $420,000). This was an example used in the HITEC 2012 Green Initiatives session, and the winner of the first People’s Choice award, presented by Dr. Sunny Kim, Dr. Dan Connolly and Naomi Stark. If you are still not convinced that green technology is not a fad, that it is essential in sustaining your operation, that you can be financially green without effort or investment in green technology, then okay you win. Just know you’ll be missed at future HITEC events because your operation was lost, because you simply couldn’t afford to keep your doors open and your electricity on anymore. ■

HITEC 2013 Special Report

TECH TRENDS Globalization

Go Local As You Grow Global By Bill Bernahl

Move beyond a one-for-all digital marketing strategy, and instead customize content for regional markets.

merging markets will fuel continued expansion in the travel industry. Airline passengers are estimated to triple by 2030, driving related growth in all travel categories and fostering increased cultural cross-pollination. While travel executives are increasingly focusing on global issues, many major brands are still taking an approach primarily centered on the United States and Western Europe. This is especially true digitally where brands are now challenged to move beyond the basics and truly optimize their digital experiences for global consumers.

Glocalization Coming of Age Glocalization is the idea of adapting your products and marketing for countries and cultures in which you are operating. While international trade and travel has made the world smaller in many ways, local values, languages, tastes, channels and buying behavior form a broad mosaic of opportunity against which your marketing messages play. Adapting your products, marketing and digital systems to local needs can dramatically improve performance and customer satisfaction. As an example, changing the photography on the Chinese version of a hotel web site when viewed from China allows you to include photography much more relevant to Chinese customers traveling within China. In a recent study, ads created to run globally underperformed localized ads nine times out of 10. Bill Bernahl is the vice president of e-commerce and marketing systems for Hyatt.

HITEC 2013 Special Report

Globalization

Maturing Digital Platforms To quickly engage with international markets, many brands led with country/language specific implementations to gain speed to market. Most major brands are now moving to unified global platforms capable of delivering regionalized experiences. These platforms allow brands to provide more powerful tools locally while maintaining brand identity and decreasing costs. As an example, Hyatt has consolidated more than 20 campaign e-mails systems we had to serve markets around the world to one system and created a single shopping/booking experience that supports hotel content and booking for all our hotels in 10 languages. Through these efforts, we’ve put more capability in the hands of our local markets, improved legal and brand compliance, and are saving over a $1 million annually in platform costs.

Global Online Trends Social media is exploding around the world — especially outside North America. Facebook now supports more than 70 languages and has over 1 billion active monthly users. More than 90 percent of these users are outside the U.S. In developing markets social media engagement is especially high with 97 percent of Internet users in metro Indian, Chinese and Brazilian markets engaging in social media each month where Weibo (Chinese social media site) and Orkut (social networking site owned by Google, and popular in Brazil and India) play strong roles. To take advantage of digital trends in global travel, here are some things brands should consider as part of their plans for 2013 and 2014:

1. Go Local, All The Way Now that most brands are covering the basics, international customers are demanding a higher level of engagement. Dodgy translations, campaigns that are not locally relevant and stock photography of Westerns leave customers disappointed and more likely to seek other brands. Managing global brands in diversified markets is a challenge. It is difficult, if not impossible, to effectively support local digital needs from a single corporate headquarters. Yet, digital marketing does require expertise. An effective route many have found is building regional marketing teams with the right resources to not only develop appropriate local content, but that are able to create branded content quickly to meet increasingly short marketing and social interaction cycles. Many campaigns utilize a global concept with consistent branding and then have their messaging and media localized. Often this consists of reconceiving pieces of create for the target market rather than simply translating them. An area often overlooked is optimizing for inter-

An effective route many have found is building regional marketing teams with the right resources to not only develop appropriate local content, but that are able to create branded content quickly to meet increasingly short marketing and social interaction cycles. national SEO. While global search engines are chasing Google in terms of technology and scale, they have their own nuances. Ensuring your content is optimized for international search engines, such as Baidu or Yandex, will substantially improve your performance.

2. Don’t Neglect Social With the explosion in social media globally, be sure you’re engaging with all your customers. Be sensitive to how your customers engage in social around the world. In the U.S. there is more of a focus on consuming and forwarding social media rather than creating. With social, it is even more critical your content be locally relevant to connect with your customers. Use analytics to focus your international spending and resources to engage with the rapidly growing markets for your business.

3. Create a Global Infrastructure For your web site, speed rules — increasing conversion, search engine ranking and customer satisfaction. An Amazon study found a one percent increase in revenue for every .1 second decrease in page load time. Just because your site is fast in your principle market doesn’t mean it is fast for customers around the world. Being on the backbone of the Internet is a good start and generally a good base for global performance — the speed of light is pretty fast after all. Using Content Delivery Networks with good international presence is key — especially in Asia. You should also consider that many users in developing markets still may have slow connections for “the last mile.” Consider further compressing your data and reducing number and weight of image and other files to ensure good performance for bandwidth challenged global customers. International travel will continue to grow and regional optimization will take on even more importance. Working now to build the processes and systems to position for this growth will ensure you’re maximizing your current returns and able to capitalize on new opportunities. ■

HITEC 2013 Special Report

TECH TRENDS Future Technology Architecture

PaaS — One Central Hub, A Wide Selection of Apps I By Terry Prime

PaaS provides a platform delivered in much the same model as SaaS; plus, allows other companies to build new services on top of its architecture .

n today’s rapidly changing business landscape, the hospitality industry can easily become left in the dust when it comes to technology. With such a wide variety of new technologies, products and services entering the market, how can hotels and management companies ensure that the products they are using will sustain their future growth, support their strategic business initiatives and maintain their software investments? A significant part of the answer will be Platform-as-a-Service (PaaS).

Background to Cloud and SaaS Before there was "the cloud," hotels were at the mercy of bulky, expensive hardware and software that required a team of IT experts to set up and continuously manage. This hardware and software was characteristically an island, only accessible at the office it was located. It did not integrate with other software systems (e.g. PMS, sales & catering) and was oftentimes slow-running. Even if the systems performed adequately, the version of the application running could be many releases behind the software vendor’s latest release, which means the hotel could be missing out on the latest features that could help their business. When it finally ran out of steam, hotels were faced with an expensive and risky hardware and/or software upgrade. These legacy business systems are now being replaced with Terry Prime is the chief technology officer for The Knowland Group, a technology firm that delivers marketing products and services. With over 25 years of experience in the computer and telecommunications industry, he has been a leader in a number of SaaS and business intelligence companies.

HITEC 2013 Special Report

Future Technology Architecture

something much more versatile, reliable and inexpensive: cloud-based Software-as-a-Service (SaaS) products. So, what is the Cloud, SaaS and PaaS? The "cloud" refers to an information system that resides at a remote data center that is typically accessible via the public Internet, and SaaS is a software application that is delivered as a service normally from the cloud via the public Internet using a Web-based browser or mobile device. Most models of SaaS provided by a vendor host multiple customers on the same platform, often referred to as a multi-tenant system. This spreads the infrastructure and labor costs, and at the same time leverages the expertise of dedicated and experienced IT teams to deliver a highly reliable and scalable service that is very inexpensive and often charged on a monthly subscription basis. Since the management, maintenance and upkeep of the software and infrastructure is undertaken by the SaaS provider, hotels and management companies can forgo dedicated IT resources while ensuring use of the most up-to-date version with the latest features. The infrastructure is usually virtualized and can be upgraded seamlessly and in real-time without interruption of service. The advantages of using the cloud and SaaS are tremendous and have been proven to positively impact everyday business functions from payroll to HR, and PMS to sales and catering solutions within the industry. Never before has technology allowed for greater collaboration and integration amongst hotels, vendors, and even hotel guests.

PaaS — The Next Wave The next wave in the SaaS and cloud revolution is Platform-as-a-Service (PaaS). PaaS provides a platform delivered in much the same model as SaaS, but in addition allows other companies or independent software vendors (ISV) to build new services on top of the PaaS architecture. This then creates an eco-system of Web and mobile applications that yields even more value from your data by integrating previously isolated systems, delivering new decision support logic or visibility through data analytics. These third-party applications will be easier to integrate and managed, offering a more consistent user experience. To ensure security and maintain integrity, ISVs must pass certification with the PaaS vendor, and customers must authorize access before data is shared. Examples of PaaS services today are Force.com from Salesforce.com or Amazon Web Services (AWS). With a network of ISVs harnessing existing features from the PaaS vendor’s library to build new pre-integrated applications, the speed at which these new applications are distributed will accelerate, providing unprecedented

levels of actionable business intelligence to the hospitality industry. PaaS will also provide existing hotel systems with the same level of access to maintain the investment and leveraging the combined value of the systems. According to a report by research firm TechNavio, the global PaaS market is forecasted to grow at a 49 percent compound annual growth rate through 2016, and achieving revenues of $6.45 billion by 2016. What do industry professionals need to keep in mind to stay on top of this trend? Hotels and management companies should take note that not all SaaS or PaaS systems are created equal. The implementation and knowledge base of the selected vendor is paramount. Always investigate the experience of the vendor and its professional IT team. Many vendors of legacy standalone applications have attempted to build cloud-based solutions, but without the experience or expertise to understand the differences and challenges of building a multi-tenant system. They often struggle with changing their business model and pricing from a point software sale to that of a highly available service company. Some companies were formed with only SaaS and PaaS products in mind, and it’s in their very DNA. Their products, organization, pricing and business objectives are crafted specifically to deliver cloud-based services. When searching for a reliable SaaS or PaaS solution, look for vendors that have a published open standards based API, using RESTful or SOAP (Simple Object Access Protocol) Web services. Make certain that the vendor’s architecture is horizontally scalable with the levels of security you expect, and that the infrastructure is robust and redundant with no single points of failure.

Moving Forward The possibilities and opportunities afforded by cloud technologies, PaaS in particular, will continue to evolve and adapt to the ever-changing hotel and hospitality industry. In the short term we are likely to see legacy property-based systems giving way to cloud-based SaaS applications that offer greater flexibility and reliability at a more affordable price, with the leaders providing PaaS offerings in the form of integrations to major hotel and hospitality systems. Moving into the medium to long term these leaders will build ecosystems of applications amongst hospitality systems and ISVs that will provide fully integrated solutions for the industry. ■ • TechNavio. Global Platform-as-a-Service Market 2012-2016. April 12, 2013. http://www.technavio.com/ content/global-platform-service-market-2012-2016.

HITEC 2013 Special Report

TECH TRENDS

BYOD

Applications to the People! Re-think Your BYOD Strategy By Ken Smith, CISSP, CISA, CCSK

Develop a policy based on the type of applications and data employees need access to, and allow them to get real work done in a manner they prefer.

irst, BYOD isn’t just about smartphones and tablets. And when many speak about BYOD, what they are usually talking about are either Corporate Owned Personally Enabled (COPE) or supporting devices other than Blackberries. These shouldn’t really be lumped into the category of BYOD, but in mainstream media and marketing materials they usually are. True BYOD facilitates users who would like to use their personal devices for work. The benefit is supposed to be lower cost, because people will usually pay for a personal device of their choosing with a carrier of their choosing. But companies need to account for the business use of such devices, and some form of reimbursement is typically provided in exchange for the user making the device available for work use. Another touted benefit of BYOD is that companies will no longer need to provide support for user devices. But in the real world this has turned out to be only partly true. There is still an expectation of a certain level of user support. And since most of the time a Mobile Device Management (MDM) solution is used, there are components that companies must manage and provide support for. So while companies may not be managing the entire device, they are always managing at least a portion of it.

Ken Smith, CISSP, CISA, CCSK is senior security solutions architect for GreenPages Technology Solutions.

HITEC 2013 Special Report

BYOD

But for many organizations, trying to figure out how to deal with the intricacies of true BYOD is a challenge. For example, what do you do when a user’s personally owned device doesn’t interact well with your e-mail system? The user likes the device and thinks the problem is on your end, not theirs. They even told you they took it to the phone store and nothing was found to be wrong with the device. Now what? If the organization had provided (or at least paid for), and managed the device, the situation would be easier to address. This is why many organizations have gone with Corporate Owned Personally Enabled policies.

Supportive Strategy Many vendors out there are touting products to help companies with BYOD by giving them tools to keep those scary BYOD devices off their internal networks. Or limiting the capabilities of BYOD devices in order to reduce risk. But many of these vendors are missing the point. Users of these devices need to be able to get real work done and really do need access to that critical internal database even though they are not using a corporate provided device. Organizations need to be thinking in terms of end user computing strategies instead of BYOD; they need to be able to facilitate access in a manner that’s reasonably device agnostic. Whether it’s an iPhone, Android phone, iPad, Android tablet, a corporate provided Windows notebook, corporate provided Windows desktop, a personal Mac Book Pro or a personal Windows desktop, the ultimate goal is to give users access to the applications and data they need from end user computing devices that they like to use. The best way to accomplish this is to start your planning not from the endpoint device, but from the applications and data. For example, if all of your business applications are Web-based and your mobile users have a secure method for remote access to these Web applications (that meets your security policy requirements for the classification of data that users will be accessing), then you don’t need to spend a lot of time figuring out how to handle the delivery of applications to endpoints, regardless of the device type. In this case, your organization may decide that a mobile device management solution is not needed, and that a BYOD policy makes perfect sense.

If users with mobile devices need access to an internal application that provides a user with access to a database that holds credit card data, things are quite different. The company may decide that the only way to reasonably demonstrate compliance with PCI DSS is to allow this type of access only with a corporate owned, managed and secured device that uses two-factor authentication.

On the other hand, if users with mobile devices need access to an internal application that provides a user with access to a database that holds credit card data, things are quite different. The company may decide that the only way to reasonably demonstrate compliance with PCI DSS is to allow this type of access only with a corporate owned, managed and secured device that uses two-factor authentication. Could delivering this application to users’ personally owned devices still be viable and PCI compliant if it were done using some form of virtual desktop solution? If so, does it make sense for the organization to implement an MDM solution to manage the virtual desktop application on the user’s device? Or should the organization provide users with instructions for downloading the application and configuring it themselves? Figuring these issues out might seem like a lot of work. But if it’s done correctly, you will end up with a strategy that is much more in line with your business needs, your security and compliance requirements and more likely to please your users. Instead of focusing your efforts on supporting a buzzword, your organization should figure out how to provide employees with the tools and data they need to more effectively carry out their duties in a manner that they actually prefer. ■

HITEC 2013 Special Report

TECH TRENDS

Mobile

The Next Major Innovation Cycle: Mobilizing the Internet By Bob Friday

As mobile operators, hotels can leverage their Wi-Fi networks to engage and provide value to their guests.

Bob Friday is vice president and chief technology officer for Cisco Wireless Networking Group.

HITEC 2013 Special Report

hroughout my career, Iâ&#x20AC;&#x2122;ve watched two mobile worlds, living side by side, for the most part ignore each other. On one side, we have the mobile cellular voice world that we have all come to depend on in our daily lives, which has freed us from our fixed voice lines. And on the other side, we have the mobile Wi-Fi data world, where most of us got our first taste of the mobile Internet on our laptops in our homes, coffee shops, airports and hotels. With the introduction of the iPhone in 2007, these two mobile worlds began to collide. This transition has been the catalyst for what I think is the next major innovation cycle: mobilizing the Internet. With the shipment of smartphones now exceeding that of feature phones (IDC, Q1 2013), every mobile user will soon have the Internet in their hand. And for many, mobile devices will bring the Internet to those who would not otherwise have access. In this new innovation cycle, how we access the people, things and the ever growing amount of data around us in venues will fundamentally change. Networks and devices will increasingly use your location and other context to bring the local services and information that is relevant to you within two clicks on your mobile device. This ends the days of scouring the Internet to find the information relevant to you.

Mobile

Connectivity Within Hotels Two years ago, I attended my first HITEC conference and started working more with hospitality organizations, and the pain point I heard was common throughout the industry: guests were bringing in mobile devices and wanted the mobile Internet to access to their personal social networks, video content and business data. Mobile Internet access had moved from a necessity for just the business traveler to a-critical guest service for all guests, on par with power, light and water. And upgrading their Wi-Fi networks with high-density carrier grade Wi-Fi deployments has now become a top business priority across the industry, as the demand for mobile Internet has begun to climb exponentially. Another realization I have heard from several hotel executives is they are starting to realize they are basically being asked to become mobile operators. In addition to needing to provide a great secure seamless cellular / Wi-Fi mobile Internet experience, they can leverage their Wi-Fi networks to engage and provide value to their guests. Their wireless network is moving from just being a cost center to a strategic asset that can detect, connect and engage their guests.

Detect. The mobile operator experience is as follows: for guests who have opted in to loyalty programs, venues and hotels can now detect guests as they enter the venue and start providing a differentiated and personal experience to each guest. They can also leverage their networks to provide foot fall analytics that allow guests

to find services such as the shortest coffee lines, and provide their operations department real-time information on where associates are needed.

Connect. As a mobile operator responsible for authenticating guests and providing a secure network connection, hotels can form roaming partnerships with other mobile operators and hotels. Properties can also create unique guest experiences by partnering with social networking companies and other identities who may have network credentials on the mobile device.

Engage. Once guests are connected, they can engage with local services and information relevant to the venue within two clicks on their mobile devices via the mobile OS, browser or loyalty application. Imagine guests walking into your hotel and being notified of the local services, information and real-time messaging, depending on the guests' location. As a mobile operator, the hotel owner of the future will need to understand the capabilities of mobile devices and how to fully leverage them in their wireless networks. When you look at the horizon of mobile devices and mobility you can see new capabilities coming in the areas of: indoor location, local service discovery, Wi-Fi authentication, augmented reality, session management and mobile payment. And what is over the horizon we can only imagine with anticipation. â&#x2013; â&#x20AC;˘ International Data Corporation (IDC). Worldwide Quarterly Mobile Phone Tracker. April 2013. http:// www.idc.com/getdoc.jsp?containerId=prUS24085413

HITEC 2013 Special Report

TECH TRENDS

Mobile

Consider Customization By Thomas Castleberry, MBA, MCSE, MCSA, MCT, MCP

Bring control of mobile apps in-house for a data secure tool connected to the central CMS.

ontrolling your own destiny, and owning your own data both seem like logical business requirements; but, both are not always the easiest to recognize that you are in control. You are, and now is the time to take the reins. One way is to consider moving your customerfacing mobile apps under one central CMS solution and customize them in-house so that they are fully integrated with your onsite database, and keeping the information within your secure firewalls. As hotels move to mobile integration, itâ&#x20AC;&#x2122;s important to remember that if you plan to give a guest an iPad to check-in remotely that it should actually talk to the PMS (Property Management System). Or for F&B, that mobile solutions talk to the POS (point-of-sale) system and send kitchen orders to print at remote kitchens, and remote bar orders print where they need to. Or that selfservice paperless casino comps are recognized and deducted in real time from the player tracking systems and so forth.

Bringing it Home While the popularity of SaaS is on the rise, in the last few years the hospitality industry has also seen a paradigm shift from vendor-based enterprise with property-hosted CMS solutions to corporate- and property-owned solutions developed by vendors and brought in-house. This trend allows for blending consumer facing peripherals with corpoThomas Castleberry, MBA, MCSE, MCSA, MCT, MCP is executive vice president and chief operating officer of Skywire Media based in Las Vegas, Nev.

HITEC 2013 Special Report

Mobile

rate management tools, a method that allows individualization by the company team member with data control. The same goes for consumer data, purchasing history, integration touch points, all of these elements are slowly working their way inside the firewalls and offering better control over access to sensitive integration touch points. This setup offers a way to eliminate mobile and Web delivered solutions that merely deliver ill sized graphics and loosely coupled mobile web sites. The even bigger issue is often the duplication of data entry required for the guest that comes from having multiple vendor-hosted apps separate from the central CMS. In many scenarios, the guest has credentials for the mobile app, then needs to re-enter data for making reservations or making on property purchases. Not something a user is happy to do. This is because mobile users expect a more tightly integrated user experience when downloading and browsing apps for hospitality establishments. Having the ability to store user credentials within the mobile application, and pass through those credentials on to native interfaces is a much richer experience. Having the ability from a mobile device to book a room, make restaurant reservations or golf tee time are examples of how users have become accustomed to using highly sophisticated and integrated solution. In addition, under the control of the IT departments, important customer information is not as vulnerable to holes in the corporate firewalls. With in-house solutions, the analyst can focus on transforming unstructured data into structured, usable and actionable data.

Getting Started There's no denying that the employment of an SaaS comes with the advantage of access to feature enhancements. So if you were to consider moving forward on building a customized application, make sure to structure into the initial vendor contract a means for staying current. Something that can alleviate these and many other concerns while still providing for and allowing customization. In addition, as you do move forward, select a vendor willing to work with you: to integrate their solutions to optimize and eliminate the duplication of data entry, to map out a successful future migration, to prepare a plan ensuring that code is delivered and updated regularly, and to guarantee the data held within can be farmed appropriately. With a careful initial approach you have the chance to offer your guests a mobile app that is something more than a glitzy ad, but a tool that delivers on utility and beauty. â&#x2013;

HITEC 2013 Special Report

TECH TRENDS

Flashback

Internet Telephony: It's on the Way By Edwin Pemberton, MHS

With talk of future trends in this Report, it is interesting to look back and read a perspective from the past. Here's an early trend article from June 1998, originally published in HFTP's The Bottomline magazine.

sing the Internet for making phone-to-phone (as opposed to PC-to-PC) calls still must pass some technical and regulatory hurdles, but it is close enough — and important enough in hotel operations — to demand attention.

Impact on the Hotel Industry For the hotel industry, Internet telephony will mean significant reductions in the cost of central reservation operations, telemarketing and administrative calling. On the downside, it could mean major reduction in revenues in the hotel’s telecom department, and would make present call accounting software virtually useless. The call accounting challenge stems from the fact that call accounting systems usually "rate" guest calls according to distance, and add a percentage as a surcharge. That method has been profitable for the hotels, but for Internet-based calls, the hotel call accounting systems will be able to charge only for the local calls necessary to link with the Internet. For example, there will be no cost differential between a call from New York to Philadelphia, and a call from New York to the Philippines. The pending arrival of phone-tophone communications via the Internet is reaching the global telecommunications market during a period when it is already in a frenzied state trying to handle the impact of the:

Edwin Pemberton, MHS, was director of the telecommunications division for Chervenak, Keane & Co. at the time this article was written.

HITEC 2013 Special Report

Flashback

• U.S. Telecommunications Act of 1996. • European Community’s telecom rules which became effective last January. • World Trade Organization’s global pact, negotiated last year. • Impending inauguration this year of the Iridium Project, whose network of low-earth-orbiting satellites (LEOs) will permit calls to be made to and from anywhere in the world. • Worldwide trends of privatization and deregulation. Internet telephony is just one more ingredient in that complex mix, and has the potential of becoming one of the most important.

Background Phone-to-phone Internet calling quietly entered the telecom market in 1995 when VocalTec, a small Israeli company, introduced a software program that made it possible for people to speak with each other using their PCs and a microphone. However, people could only talk to other PC-users who had the same software and were simultaneously logged on to the Internet. The concept took a major step forward in 1996, when VocalTec created a "gateway" computer that connected the Internet to the telephone network. That allowed people to speak to each other over the Internet using regular phone lines instead of PCs. The advance was a major break with tradition. The basic design of the telephone network hasn’t changed since AT&T invented it more than 100 years ago. It’s a vast highway where every call has its own lane, or circuit. A telephone call ties up an entire circuit, even when people pause between words or put the phone down to answer the doorbell. The Internet is much more efficient. Internet Protocol (IP) calls travel a short distance over copper phone lines to the nearest phone company office, where a gateway computer converts the sound of the voice into the ones and zeros of computer language and breaks it into little pieces known as packets. Compressed packets are thrust into the Internet data network, where they share lines with other transmissions. The result is that Internet calls are much cheaper that regular calls.

Among the ones to watch: • Level 3 Communications, Inc., founded by James Crowe, WorldCom’s former chairman, has announced the building of a $9 billion network based on Internet technology that can transmit voice, data, fax and video. By year end, Crowe expects to sell data and fax services at low rates in six U.S. cities and expand nationally and internationally as fast as possible thereafter. • GTE Corporation bought BBN Corporation, a company that helped create the Internet and has extensive Internet assets. GTE also acquired the rights to a quarter of the capacity of the network Key West is building. GTE is conducting tests with voice and data over the same Internet network that now carries its data. GTE, the most aggressive of the old-line phone companies, is betting that all the traffic will flow over that converged network. • Qwest Communications International, which combines a fiber optic network with IP technology, has launched a 7.5 cents per minute long-distance service for individual consumers and has special rates for businesses. In March, Qwest agreed to acquire LCI International, the fourth largest long-distance carrier with twice Qwest’s revenues, for $4.4 billion and stock. • Vienna Systems has announced a partnership with VIP Call to deploy a global Internet telephone network. Vienna has a nationwide private network in place. • Lucent Technologies has unveiled software for voice conferencing over the Internet. Lucent will make the modules available to other vendors developing Internet voice-conference applications. • In Europe, the move to the Internet is being led by Bertelsmann AG, a media giant in Germany, which plans to offer long-distance discounts of 30– 60 percent less than the local phone company. • Not to be outdone, the local phone company, Deutsche Telekom, plans to offer its own Internet service on a trial basis. • AT&T has gotten into the act internationally with a joint venture called AT&T-Jens. An executive of that company calls the existing phone networks "for the 20th century" while referring to the Internet as "the telephone network of the 21st century."

The New Wave A wave of IP companies is entering the telecom market, bringing technical advances or targeted business approaches such as long-distance faxes based on IP, or IP-based networks just for international calls. Internet telephony is certain to produce a range of companies offering the hotel industry gateways to the Internet for the transmission of phone calls and data. 30

HITEC 2013 Special Report

John Sidgmore, WorldCom’s chief operating officer, estimates the scope of the Internet invasion this way: "By 2004, more than 99 percent of communications bandwidth could be used for the Internet." Those are big numbers. Our hotel industry would be well advised to keep aware of what’s happening, and assess how we can use it to our advantage. ■

Distribution

HITEC 2013 Special Report