A room in the cloud

By Danny King
A room in the cloudLuxury hoteliers may trumpet tech-based amenities such as high-definition TVs or the ability to book a room and check in with a smartphone, but when it comes to the most advanced approach to providing wireless Internet service, the leader in that department might be good old Motel 6.

The economy hotel chain, which is a division of Paris-based Accor, last month announced it had deployed what it called the largest cloud-based network in the U.S. in order to provide its guests with wireless Internet access, or WiFi.

Cloud computing is a data storage system in which the user receives data, including Internet services, by means of a massive remote storage system that aggregates content from multiple sources, maintains firewalls between each source and makes the storage available to those sources on demand.

Motel 6 and San Francisco-based Meraki, which operates the network, both say cloud computing offers a more reliable method of Internet delivery while lowering the upfront hardware costs for a hotel operator.

Motel 6 started offering WiFi at some properties in 2006 and rolled out the amenity chainwide two years later. That this low-end brand, rather than a luxury or upscale badge, appears to be on the cutting edge of Internet provision speaks volumes about an amenity that continues to vex many hotel operators.

Making connections

Each hotel must set up its own system, and the technical know-how to do so usually exceeds the training and skills of professionals in the hospitality industry. Even something as simple as deciding how many wireless access points -- the transmitters that send and receive WiFi radio signals -- are needed to provide sufficient service can be dicey. A modern hotel building might need only one for every 10 rooms, while a hotel in an older concrete building with thicker walls might need a wireless access point for every three or four rooms.

For hoteliers, the concept of fast, reliable WiFi for guests has become the technological equivalent of good housekeeping service: unnoticed when it's provided and a major source of guest angst when it's not.

Between 2007 and 2010, the percentage of hotel guests using wireless Internet instead of a cable Internet connection jumped to 77% from 55%, according to J.D. Power and Associates' North America Hotel Guest Satisfaction Index Study released in mid-2010.

One year later, that survey revealed that about 13% of hotel guests reported having had a problem with either their Internet connection or speed. (The most common guest complaint overall was noise, which 16% of those surveyed said was a problem.) Even a simple Google search for the terms "TripAdvisor" and "WiFi" will produce dozens of hotel guest comments that include complaints about slow, spotty or expensive wireless Internet service.

Meanwhile, among leisure guests, about 80% own a laptop, and almost a quarter own a tablet computer such as an Apple iPad, according to an Atmosphere Research Group study during the fourth quarter of 2011. Migration to tablet computing is a key point, because devices like an iPad can't connect to the Internet via an Ethernet or phone cord and therefore require WiFi.

"There's no going backwards when it comes to consumers' technology use," said Henry Harteveldt, principal analyst at Atmosphere Research Group. "Hotel guests' reliance on WiFi at hotels will only grow over time."

And with companies ranging from Starbucks to McDonald's providing free WiFi in recent years, more hotels are expected to do the same, putting pressure on hoteliers to cut costs on what many had seen as a potential profit center.

Henry HarteveldtAbout 38% of travelers surveyed in a study that Expedia's Hotels.com division released this month said free WiFi was a "must" when it came to amenities, and about a third of those travelers said free WiFi should be a standard hotel amenity.

"Many guests never travel without their tablets, smartphones and laptops," Hotels.com spokeswoman Taylor Cole said in a statement. "It's as intuitive as packing a toothbrush."

Service without servers

Meraki's system encompasses 620 of the approximately 1,100 Motel 6 properties in the U.S., totaling almost 10,000 access points serving about 70,000 rooms.

Motel 6 and Meraki declined to disclose the financial details of their agreement, but both companies insist that cloud computing cuts capital expenditures relative to a more traditional setup because there's no need to buy, install and maintain a server, the high-end computer that serves as the hotel's link to the Internet.

With prices for servers starting at about $1,000 and working their way up to five-figure levels for systems serving larger hotels, a WiFi Internet system can cost an individual hotel tens of thousands of dollars.

Kiren Sekar, vice president of marketing at Meraki, said his company's system can cut Internet setup costs by between 30% and 50%. For that reason, hotels are among the fastest-growing sector of business for Meraki, whose customers also include the Viceroy Miami, Boston's Hotel Buckminster and the Prospector in Park City, Utah.

Explaining the system's appeal, Jessie Burgess, senior director of information technology at Accor, said, "You don't have a big, expensive, vulnerable piece of equipment [the server] on site. You can put in some smart access points, lower-cost devices that, if something were to happen, you don't have that monetary outlay."

In addition, both Burgess and Sekar say there are fewer reliability issues with cloud-based Internet service because a tech-savvy service provider such as Meraki can monitor the system off-site. With an on-site, server-based system, a hotel manager must be trained and available to deal with technical issues.

In addition to the cloud model, Burgess said Motel 6, which charges guests $2.99 per day for its Internet service, uses what he calls a "mesh architecture," which means that instead of a faulty access point that shuts down Internet access for a number of rooms, other nearby access points pick up the slack by talking to each other. While Burgess did not provide specific metrics, he said that the Internet service's uptime has been "much better" since adopting the cloud-based systems.

"We've all stayed at a hotel where the wireless is flaky," Sekar said. "The guests are expecting to have consistent and reliable access with their iPads and smartphones. Hotel providers are realizing that if they don't provide that, they're not going to be competitive."

For these reasons, the hospitality industry is among commercial sectors that appear to be rapidly taking to cloud computing when it comes to data and Internet supply. Worldwide revenue generated from cloud computing will more than triple, to $240 billion, in 2016, from $77 billion last year, U.K.-based research firm Visiongain said in a report released last month.

Sekar declined to disclose Meraki's annual revenue but said the company, which was founded in 2006 and competes against tech giants such as Motorola and Cisco Systems, has about 200 employees and serves more than 18,000 customer networks.

Whether other large hotel chains jump into this market remains to be seen. Some hoteliers might be hesitant because of the prospect of putting the control of a guest amenity in the hands of a third party whose services are maintained off site.

"You give up a lot of the day-to-day maintenance, all of the tweaky, [information technology] stuff you don't have to specialize in, especially at the property management level," said Jeffrey Breen, president and co-founder of Atmosphere Research Group. "But you have to be cautious of service-level agreements. When you give up control, you give up control."

For this reason, the concept of cloud computing for hotel WiFi remains in its nascent stage, and Motel 6 remains the only major chain to adopt the practice. Still, with hotel developers and operators looking to cut capital costs as well as the need for on-site technical expertise, it's a practice that could gain favor over the next few years, especially as guest expectations related to WiFi service continue to rise.

"We're seeing stronger signals throughout our properties," Burgess said. "The devices are more stable and reliable."

For hotel and hospitality news, follow Danny King on Twitter @dktravelweekly. 
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