Broadband options
In a nutshell, broadband is a fast Internet connection that is "always on". Unlike a modem that is disconnected from the Internet when you've finished a session, broadband remains connected all the time, so you have continuous access to the Internet, e-mail and so on. The most common form of broadband is called ADSL (Asynchronous Digital Subscriber Line) and is provided by many companies, the best-known being BT.
Another difference between broadband and modem connection is speed, and it's speed that is the key attraction for hotel guests, as it allows them to do things like transfer and receive large files and view videos.
Mark Teasdale, managing director of RIEO Communications, a specialist supplier of communications technology for the hospitality market, believes that broadband makes a service stand out from the rest. "If a user was to download a PowerPoint file attachment of 2Mb over their modem, this may take as much as 10 minutes. Over a broadband connection, it is possible to download the same file in less than 30 seconds."
Because of this, broadband has already become an essential offering for guests. "It addresses very effectively the wants and needs of the vast majority of travelling businesspeople carrying laptops," he says. "Broadband is recognised and acknowledged as providing the service required by the market, and desired by ‘road warriors' staying in their rooms."
Broadband Internet access is having an impact on the hospitality industry in many other ways, too. It can act as a revenue generator, when used in conference rooms for video conferencing, and can also be used in marketing your property. For example, advertising the fact that you have broadband access in rooms is a good way to bring in business guests.
It can also be used for bookings, allowing you to respond quickly to a prospective guest's request or enquiry (you can reply to e-mail as it comes in, because your Internet connection is always on).
Broadband is, however, a complex technology. Derek Wood, an independent hospitality telecommunications consultant, agrees. "This whole [broadband] business has become very complicated, with most vendors adding to the ‘smoke-and-mirrors' image that this particular technology already has."
Pricing policies
Wood argues that guests will use broadband access at the expense of the analogue modem connected through the telephone system. "A hotel should carefully consider a call-charge pricing policy," he says, "otherwise the loss of revenue from the telephone system might not equate to the income from the broadband service. Where providers of the broadband service offer a profit-share option to the hotelier, it is likely that there will be a significant drop in telecommunications revenue." Because of this, he recommends that the hotelier own 100% of the broadband revenue.
So how can you make money from your broadband connection? There are two ways - to charge by the day or to charge by the hour or minute. Alternatively, you could offer both, so as to keep both high- and low-demand users happy.
Before you can make money from broadband, you need to have it installed. Broadband can be bought directly from a supplier, or you can install it as part of your in-room entertainment system. Two options emerge: one is what is called a Category 5 network, and the other is to install the network over the existing telephone system.
Installing a Category 5 network, as Teasdale explains, is a big undertaking, but also an important one for the future. "As a very rough ballpark figure, Category 5 cable can be installed at a cost of £100 per point [a point is where you connect to your computer network]," he says. "This figure can be a lot lower and a lot higher - lower if the hotel is either under refurbishment or is a new build, and a lot higher if the property is listed or if carpets have to be lifted and relaid. It all sounds a bit traumatic, but Category 5 is by far the better, more efficient, more reliable and more future-proof solution."
But as well as the benefits, there is a downside to broadband. One is that it can allow a computer hacker easier access to your computer network than other methods. For this reason, security is an important consideration. Woods points out: "A security issue to ponder is: can the guest in room 100 hack into the computer in room 101? The answer is yes, unless you have invested in expensive software to prevent it - which, of course, is what part of the payment to suitable vendors is for."
Another interesting new development for hotels is what is called wi-fi, which allows a guest to connect a laptop to a broadband Internet connection without cables. Ben Andradi, chief executive officer of in-room hotel technology supplier Quadriga, believes that wi-fi has a future in the hospitality industry. "Wi-fi, essentially, is Internet access - just wireless - and, if Internet access is a valid revenue stream today, then wi-fi will only help to enhance it. Right now, wi-fi doesn't contribute a great deal to hotel revenues but, very soon, we will see more investment, and consumer take-up increasing."
How much will it all cost?
The cost calculation for installing broadband can be complex, depending on which of the two options you choose. Derek Wood estimates the following figures for the costs of the two systems. These assume that you buy all the equipment outright.
Category 5 Assuming that the necessary cabling is already installed in the hotel, for a 50-bedroom hotel, it would cost approximately £17,000 in capital expenditure to buy a system, or £4,300 for annual maintenance and rental, or you could pay £650 per month over a five-year period.
Non-Category 5 If you don't have a Category 5 system, then a DSL system, which runs over the existing phone line, can be used. In a 50-bedroom hotel, it would cost about £27,500 for the installation and to buy the system outright, or £6,900 for annual maintenance/rental, or £1,050 a month over a five-year period.
As Wood explains: "These figures exclude wireless connectivity and any outlets within banqueting rooms, etc. However, when you compare the prices of the two systems over, say, a five-year period, it makes interesting reading, especially if the hotel already has a network infrastructure."
On top of these costs comes the cost of the Internet connection itself. This again depends on what you decide to buy - for example, an ADSL connection would cost about £1,000 to connect to the service plus £500 a year for the rental.
Because installing broadband is such a complex issue, with many expenses, it's a good idea to use an independent consultant who can guide you through the complex maze of pricing structures and costs.
Who to contact
Three companies who provide a direct service are:
Inter-Touch 01932 834100
STSN 0118 949 7070
RIEO Communications 0870 600 7701
Three that provide broadband through in-room entertainment systems are:
Quadriga 020 8987 0560
ETV Interactive 01259 720319
Derek Wood 0117 961 2938
