Bandwidth Management Technology Whitepaper by iBAHN

Bandwidth Management Technology

ExEcutivE Summary

Hoteliers currently are faced with a difficult challenge – how to address the ever-increasing demand for more bandwidth by their guests. This rising demand for bandwidth is fueled not only by an increase in actual numbers of Internet users at the hotel, but also by an increase in use of bandwidth-intensive applications. Hoteliers need bandwidth solutions that are cost effective and will increase guest satisfaction. Guests expectations, while on the road, are established by what they have at home; nearly 60% of US Households have Broadband Internet connections (projected to more than 77% by 2012), with download speeds ranging from 2.5 – 10 Mbps for cable customers and 200 kilobits per second to 2.5 Mbps for DSL customers. There are several methods available to hoteliers to manage increased bandwidth usage. A traditional method is to continue to add bandwidth based on increased usage. Additional bandwidth management options include speed and throughput capping and guest managed bandwidth. With Guest Managed Bandwidth, a hotel can maximize the guest experience and potentially drive increased revenue. Guest Managed Bandwidth allows the guest to select and pay for the bandwidth option that adequately supports their bandwidth needs while staying at the hotel.

DEfinition of BanDwiDth What is bandwidth? Bandwidth is simply the amount of data transmitted over a network connection during a given time. In the early days of High Speed Internet Access (HSIA), a T1 provided more than enough

The Ideas In Brief: who have an unsatisfactory technology experience will not return to a hotel.

• a majority of guests

continue to increase the amount of bandwidth required to support guests

• bandwidth intensive applications

can result in new revenue opportunities and happier guests

• Flexibility in technology options

bandwidth to an individual hotel to meet the needs of business travelers who were just checking email and browsing the Internet. With the increase in usage and intensity of applications, most hotels have been required to upgrade their available bandwidth with multi-T1, DS3, DSL or metro Ethernet connections. The problem is that, even with greater levels of available bandwidth, a hotel’s entire bandwidth still can be consumed by a few individuals who are downloading videos or sharing files using “peer-topeer” (P2P) applications. These P2P applications

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Bandwidth Management Technology

are especially problematic to hotels because they automatically adjust to consume as much bandwidth as is available. In a recent test it only took four guests simultaneously streaming videos to consume a T1 (1.5Mbps)!

could account for as much as 80 percent to 90 percent of all traffic worldwide by 2010. During the 2009 presidential inauguration, CNN reported that 12 million people streamed video from their web site, the most in history.

One way to understand bandwidth is to think of a hotel’s network as a highway and data packets as cars. Data packets travel along the roadway to get to their various destinations. The maximum capacity (bandwidth) is dependent upon the size of the highway and the speed limit. If there is only one car on the highway, it will travel quickly and easily. If too many cars attempt to travel along the highway at the same time, the highway will become congested and speeds will become sluggish. A hotel’s network connection operates the same way. If the pipe is too small or if too many data packets are being transmitted at the same time, guest connection speeds will become very slow. This is especially prevalent during peak usage times at hotels, typically from 6pm to 10pm, when too many users are try ing to access the Internet at the same time. To avoid these traffic jams, the highway may be expanded by adding more lanes (bandwidth), but without proper traffic controls, even the largest highway can still become congested. This leads to dissatisfaction among guests who expect to be able to maintain their productivity and to use the Internet away from home as easily and efficiently as they do in their homes. Market studies continue to reinforce the guests’ number one concern around HSIA while at a hotel is “speed”…they expect and demand fast speeds.

While it is likely that Internet usage behavior will differ between business travelers and residential users, it seems clear that business travelers will visit and use high bandwidth applications. This change in usage, even if it represents only a fraction of the residential consumer use, will require significantly more bandwidth than previously needed in hospitality settings.

thE BanDwiDth ProBlEm Residential consumer trends are indicating bandwidth-intensive applications (video/audio streaming, movie downloads) are consuming a larger portion of Internet traffic. Video downloading and streaming are so bandwidth intensive that they may account for up to 50 to 60 percent of all Internet traffic. Experts estimate that video transmissions

For most business or leisure travelers, HSIA has become a necessity, an expectation. Travelers require Internet connectivity both for their productivity and their comfort while away from home. They also expect to receive the same Internet experience in the hotel room that they get at home. When HSIA was first deployed to hotels in 2000/2001, business travelers typically used the Internet to check email or browse the Internet; recent research has shown that business travelers are now among the most technology savvy users of the Internet and early adopters of the latest technologies. These travelers often are using bandwidth-intensive applications such as downloading video and audio and streaming video from YouTube and a myriad of other video download sites. It is estimated that one minute of text-and-graphics browsing consumes 2 to 200 KB of bandwidth, compared to more than 1,000 KB for audio streaming and 9,000 KB for video streaming. In less than ten years, growth in Internet usage and bandwidth requirements has changed dramatically. YouTube.com traffic alone in 2008 exceeded all Internet traffic in 2000. Internet usage is growing not only in the guest room, but also in the meeting and conference space. A recent New York Times article reported that demand for streaming video technology has spiked, as more businesses are choosing to add videoconferencing

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Bandwidth Management Technology

to their meetings. Another heavy consumer of hotel bandwidth is a virtual private network (VPN), where a business traveler sets up a secure connection with his or her main office. (See other iBAHN Technology White Papers on network security) Hoteliers now face the daunting task of providing sufficient bandwidth to meet the expectations of travelers, meeting attendees, and hotel back office. If the bandwidth “pipe” becomes clogged, hotel guests will experience less than desirable connection speeds and a poor Internet experience. Failure to meet these demands could impact satisfaction scores, return occupancy and a negative impact to REVPAR.

consume the entire available bandwidth. Bandwidth caps are typically set by the Brand Standard, such as 384K, which is sufficient bandwidth for email, Internet surfing and Skype™ videoconferencing.

In a JD Powers study, nearly half of respondents said they would not return to a hotel property where they had a negative Internet experience.

BanDwiDth throughPut caPPing

BanDwiDth managEmEnt SolutionS So Brands, Hoteliers and Asset Managers are searching for options. There are several methods available to manage bandwidth. One method is to install separate pipes in different areas of the hotel, such as back office, conference, and guest rooms – though this method may not always be the most efficient or cost-effective. Another method is to dedicate portions of the pipe for specific areas or events. This provides the hotel with more flexibility in allocating its limited bandwidth and provide for revenue opportunities. More advance techniques are needed to yield optimal hotel and guest experiences. Bandwidth speed capping and bandwidth throughput capping are two such techniques.

BanDwiDth SPEED caPPing A common method for addressing this issue is to rate limit bandwidth or place a throttle or cap on traffic over the hotel’s network. The purpose of the bandwidth cap is to limit users to a specified amount of bandwidth so that no single user or a few users can

The benefit of bandwidth speed capping is it provides a homogenous experience for all users. The challenge with bandwidth speed capping is it limits users who may need more bandwidth and effective capping is dependent on the bandwidth thresholds in the hotel. Dynamic purchase options can be added to facilitate the purchase of a higher Internet speed during the guest’s HSIA session.

Another common method for addressing bandwidth issues is to limit the amount of bandwidth that is allocated to a guest room. For example, a guest will be allocated 50 MB of data transfer during their HSIA session and if they exceed the allocated limit, they can purchase additional bandwidth. In a recent Associated Press article, AT&T, the largest provider of Internet service in the United States, announced that they have begun testing a new pricing plan in the Nevada market that will charge higher prices for those who want the ability to upload and download high density data such as video and audio files. The rationale, according to AT&T, is that 5% of the company’s subscribers use 50% of the total Internet capability. AT&T will place a monthly limit on the amount of data any one subscriber can download. Three other ISPs in the area also are testing bandwidth throughput caps and are offering various service tiers and bandwidth fees for overuse. As the trend to charge high-download users becomes increasingly prevalent and accepted in the U.S., business travelers may become more willing to pay extra for faster connection speeds in the hotel room. The benefit of bandwidth throughput capping is it is familiar to guests because of the move in the residential market to throughput capping. The

Bandwidth Management Technology

challenge with throughput capping is that the guest may be in the middle of Internet session and realize that the cap will prevent them from completing their tasks. There are options for dynamic purchase during an Internet session.

guESt managED BanDwiDth An extension of bandwidth speed or throughput capping is called Guest Managed Bandwidth, in which different speed or throughput levels are offered or assigned to users. Guest Managed Bandwidth also gives the hotel an opportunity to increase guest revenues by offering variable levels of Internet service. A common method is to place a bandwidth cap on some users (such as 384K), and to remove the cap for other users. Guest Managed Bandwidth enables hotels to offer different levels of service to their guests, while preventing individual users from consuming all available bandwidth. Hotels may opt to offer the lower speed or throughput option for their “free-to-guest” Internet access, for guests who only need to perform basic applications such as checking email or browsing the Internet. The higher speed or throughput option may be offered for a price to guests who require faster speeds for more bandwidth intensive applications, such as VPN connections and video streaming. Hotels also may choose to only make the higher option available for VIP guests or corporate customers. Going back to the earlier example of cars on a highway, Guest Managed Bandwidth allows for drivers to choose which highway they take…the regular “free” highway where speeds fluctuate or the toll road where they can drive faster, but will pay a fee.

Yankelovich and underwritten by iBAHN; showed that more than 50% of respondents are willing to pay for the use of HSIA. Additionally, more than 80% of those surveyed indicated that their companies are willing to reimburse business travelers for their HSIA purchase at hotels. Guest Managed Bandwidth also allows hotels that already charge for HSIA to improve guest satisfaction by offering a lower-priced alternative to their standard HSIA rates. Guest Managed Bandwidth can prevent individual users from consuming all of the hotel’s bandwidth. However, if the pipe is not large enough, it still can become congested. Another challenge with Guest Managed Bandwidth is that guests who purchase the higher connection option expect faster speeds. If the hotel is unable to dedicate or guarantee bandwidth for the higher connection options, guests may still experience slower connection speeds during peak usage times.

concluSion The constantly increasing demand for more and more bandwidth at hotels will continue at a rapid pace. Your guests expect superior Internet connectivity that allows them to be productive while staying at your hotel. Bandwidth Management will become a critical tool for hotels to stay ahead of the curve. Guest Managed Bandwidth allows the hotel flexibility in providing different levels of HSIA options to the guest, resulting increased guest satisfaction and new revenue opportunities for the hotel.

Guest Managed Bandwidth provides an opportunity for hotels to continue to offer free HSIA to their guests. However, hotels have the ability to charge for a premium HSIA option, without breaking their brand’s promise of free Internet. A recent iTRAVELLER study, conducted by YPartnership, in conjunction with