Hotels have been using Wi-Fi to deliver high-speed Internet access services
to guests for a few years, but despite some signal successes and a glut of
Wi-Fi companies targeting the sector, the technology has failed to dominate
the market.
Travelnet Technologies has been in
the business as long as anybody and longer than most. Its Datavalet solution,
a turnkey backend network and customer management system that supports both
wired and wireless access, is in over 200 properties.
Travelnet has been at it since 1998 and doing wireless since 2001. Almost
all the Datavalet properties have a Wi-Fi component.
Yet despite the company’s past success with and stated commitment to Wi-Fi,
vice president Philippe Labrosse is surprisingly cautious in his assessment
of Wi-Fi’s role in the industry going forward.
"It’s difficult to say right now if [the hospitality industry] is moving
more to wireless or not," Labrosse says. "One sure thing is that
[guests] are asking for it."
"Wireless is clearly the future. The question is whether it’s mature
enough yet. I think it’s certainly mature enough to meet some business travelers’
expectations."
His talk of Wi-Fi is full of such seeming contradictions and ambiguities
— which is doubly surprising given the company’s most recent announcements.
Last month, Travelnet made public its biggest wireless deal yet — to put
Wi-Fi-based Datavalet systems in 36 properties owned by Royal Host Real Estate Investment Trust (REIT),
a major owner of apartment hotels in Canada.
Telco Bell Canada actually won the deal.
It licenses the Datavalet brand and technology from Travelnet, markets it
in Canada and provides systems integration services to end customers. Travelnet
markets the brand in the U.S. and elsewhere.
"This is one of the most interesting agreements we’ve had because it’s
all wireless," says Labrosse. "We’ve done wireless deployments in
the past, we’ve done complete buildings with all wireless in the past. But
this is the first one where a whole chain has made such a commitment to wireless
for all of its properties."
Bell and Travelnet have already deployed the technology in seven of the Royal
Host properties and will continue to roll it out to the others over the next
six to nine months.
Travelnet also recently launched a new division, Ubilium, to market an application service provider
(ASP) service for Wi-Fi service providers and operators of large-scale enterprise
WLANs. The Ubilium solution is based on the back-end tools Travelnet originally
developed for Datavalet.
Clearly, Travelnet itself is heavily committed to Wi-Fi, so why the question
marks about the technology’s future in the hospitality industry? It’s true
that most Datavalet properties have some Wi-Fi, Labrosse points out, but the
technology is mostly used in public areas only. Fewer than 10 percent of its
properties have Wi-Fi in guest rooms — though the Royal Host deal will bump
that number up.
Recent deals with other property owners do not involve using Wi-Fi, however.
They’re completely wired implementations.
Wi-Fi is also not heavily used, he says, although that too may be changing.
Over the past six months, Travelnet has seen a 2 to 3 percent increase per
month in overall use — wired and wireless. In February, it logged over 50,000
unique users across all 200-plus Datavalet properties.
"And we still haven’t reached a plateau yet," Labrosse says.
The business case for Wi-Fi is certainly compelling enough for hoteliers,
at least at one level. Implementing a wireless network costs about $50 per
room, he estimates. Implementing a wired Ethernet network costs $150 per room.
Wi-Fi, however, delivers only 11 or, at best, 54 Mbps of shared bandwidth,
compared to Ethernet which goes up to 100 Mbps dedicated. Even the slowest
Wi-Fi can provide enough bandwidth for high-speed Internet access services,
but that may not be all some hotels want to do with it in the longer term.
"It’s a question of their vision for Internet services," Labrosse
says. "What’s their intention with regards to [offering] other Internet-based
services such as video and telephony?"
Labrosse implies that some hoteliers are not keen to go with wireless because
they know they’ll have to upgrade to get to the bandwidth they’ll ultimately
need — and possibly upgrade more than once.
There are other problems with Wi-Fi. too. Security, privacy and control of
user behavior — no downloading porn in the lobby, for example — are all
part of what Travelnet has had to learn how to deliver with Datavalet.
While they are very conscious of the challenges around security and privacy,
hospitality companies typically don’t understand how tricky other aspects
of engineering a Wi-Fi network can be, Labrosse says. The result is that some
don’t see why they should spend as much as they should on site surveys, for
example.
"Doing a site survey is the most critical part of an implementation,"
he says. "And every time the site survey is not done properly, you inevitably
have to go back in and do it over."
Travelnet has reached a maturity and level of success — it has doubled revenues
each of the past three years — enough that it doesn’t make those kinds of
mistakes anymore. It is not just selling the Datavalet platform now, Labrosse
says. It’s also selling its expertise both in networking and the hospitality
industry.
"We’re in the business of assisting hotels to increase the loyalty of
their guests," he says. "That’s what it’s about — if a guest doesn’t
have a good experience, he won’t come back. Our business is making sure that
first experience is a good one."
Getting to where it is today has been an evolutionary process for Travelnet.
When it began, for example, the company typically owned the in-hotel infrastructure
and earned revenues from user fees. Today, most customers buy the infrastructure
and pay Travelnet to manage it for them — a typical evolution for hotel Wi-Fi
companies.
The business model Travelnet and others adopted in the beginning was probably
the only viable one. They couldn’t prove the business case for high-speed
Internet access in hotels then. Travelnet can now.
"Now that we have a lot of experience, we’re able to demonstrate [guest]
take rates, we’re able to demonstrate how to de-risk an implementation. We’re
able to demonstrate how much the costs will be and how much the revenues,"
Labrosse says.
Given all this, and given Travelnet’s apparent commitment to Wi-Fi, one wonders
then why the company can’t influence more customers to overcome their misgivings
and adopt Wi-Fi. It appears it doesn’t even try.
"We’re not in the business of convincing hotels to go one way or the
other," Labrosse says tartly.
Maybe Travelnet got out of that business after running up against a brick
wall for too long. This may also be why it is now branching out into the service
provider and enterprise markets with Ubilium.
