Hospitality solution providers profit from connectivity, customization

Hospitality VAR Hotel Internet Services profits by wiring up hotels, casinos and condos and supporting end-user customers.

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In a world that hinges on connectivity, gone are the days when you can turn off your phone, ignore your email and enjoy vacation. In recent years, the need for Internet access everywhere, from multimillion-dollar hotels to RV parks, has provided value-added resellers (VARs) with a new market to explore and profit from.

Gary Patrick, president of hospitality solution provider and network reseller Hotel Internet Services (HIS), based in Agoura Hills, Calif., noticed this trend five years ago and decided to act. "What we saw was an ever-increasing need to have access to the Internet wherever you were traveling," Patrick said. "People were becoming more and more dependent on the Internet, and so we felt that there would be a great demand for that."

Patrick noted that in some hospitality sectors, especially casinos, Internet adoption was seen as somewhat problematic and against the grain of their business model. In short: Casinos want people out on the floor gambling, not holed up in their rooms in front of computers.

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The fact that many business conferences are hosted in Las Vegas added more demand for a new class of hospitality solution providers.

"When we started in 2003, at many of the casinos … it was frowned upon to provide that amenity. But they quickly saw that if they were going to have people [staying at their hotels] comfortably, they were going to have to provide them some means to get onto the Internet," he said.

The rise of the hospitality solution provider

For some establishments at that time, the sudden demand for Internet access meant inexperienced engineers designing inefficient networks that provided minimum connectivity to their patrons. Patrick described one upscale hotel in California putting access points in over 100 rooms, then pulling out their antennas to avoid signal clashing -- thereby limiting connectivity to one corner of each room.

HIS found its niche in taking over network design and maintenance for hotels, casinos, condos and RV parks. And, five years later, the company provides connectivity to establishments in 30 states, with offices in California, Nevada and Florida -- three popular tourist hubs.

In Nevada, HIS works closely with the casino industry to meet patrons' connectivity needs. At the Imperial Palace hotel and casino, HIS identified two markets: people with laptops and people without.

The Imperial Palace is a 2,700-room giant that HIS first connected up in 2004. "They had no Internet at all and were looking at putting Cat 5 [cabling] into the rooms. At the time, it would have been half a million to three-quarters of a million dollars to run Cat 5 to all the rooms. We met with them and explained the greater need for Wi-Fi, so they could save all that money for cabling and so forth," Patrick said.

For clients without laptops, HIS and other hospitality solution providers offer business centers that provide not only connectivity but also print, scan and fax capabilities. Today, most professionals take these amenities for granted, but according to Patrick, they were practically nonexistent five years ago. In its quest to wire up the hospitality industry, HIS partners with hard-line and wireless networking and hardware vendors including Cisco Systems, 3Com, AT&T, Nomadix, Dell, IP3, Colubris Wireless Networks, Proxim, SMC Networks and others.

Deployment begins the service and support cycle

Implementing the technology is just half the battle though. Support for the end-user customer or guest is key, Patrick said. "That's one of the critical pieces we found over the years that some people didn't understand, because there are a lot of people who are just now getting on the Internet. Once they venture from their home to a different environment, many are unsure how to make it work," Patrick said. That is especially true of users who use email to keep in touch with family.

Patrick also noted that 24/7 tech support is a necessity, especially in casinos where guests often gamble at all hours of the day.

Often in these environments, a business center is too much of a hassle to use. Enter the Internet kiosk -- these small, customizable, standalone computer stations provide hotel and resort patrons with fast access to the Internet and printing equipment.

"Basically what you have is an ATM-looking machine, an enclosed machine with a small footprint. A lot of hotels can't even put a 3-foot-by-3-foot desk in their lobby, but they could fit a kiosk nicely, so customers can print boarding passes and so forth," Patrick said. If the kiosks are specially designed to fit into their environs, they're more attractive for ambiance-focused environments like casinos.

Back-end systems provide a real-time look at network health

Combine the three -- wired and wireless connectivity for suites, business centers and small kiosks -- and what's left is a completely connected but difficult-to-manage network or set of networks.

That's why HIS offers its own back-end system to monitor and control each network infrastructure. HIS can give its clients access to information that they didn't have before, Patrick said. "A lot of providers previously didn't provide them the means [to access the information]. If it was revenue share, they just got a check. They had no idea how many people were online at any given time or the peak periods," Patrick said.

HIS clients can now monitor upload and download rates, how many users are on their network at any given time, and even get an individual user's uptime.

"We have a back-end system that's not only for our use but also tracks the individual user by capturing the MAC address. So if we have a high occupancy and we need to limit downloads to 512 kilobytes per second per person, we can deploy that," Patrick said. Hotels and resorts also have the ability to sell tiered bandwidth use, allowing users to pay more for faster Internet.

Advertising: The next frontier for hospitality VARs

The newest development in the hospitality networking field is advertising. As Patrick explained, hospitality solution providers are too numerous to effectively reach enough possible clients through advertising; this is leading the industry toward cooperation while still competing. What they can do is offer advertising-subsidized Wi-Fi to customers and use that to propagate their brand and that of their affiliates.

"The advertising is something still in its infancy. There are numerous companies like AnchorFree out there trying to aggregate advertising across companies like ours. We have a number of different pilots we're doing for our wireless as well as kiosks to try and see what people are willing to put up with," Patrick said, referring to pop-up and banner ads.

He also added that while companies are, in effect, cooperating with their competitors, there's a mutual advantage to giving advertisers the ability to reach a wider audience.

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