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An alliance between mammoth systems integrator Unisys and Starwood Hotels & Resorts Worldwide will bring broadband Internet connections to hotel rooms nationwide, signaling new life for an industry beaten down by bankruptcies, low customer acceptance and service disconnects.
The companies today will announce the partnership, which joins Unisys Room Connect program for hotels and Starwoods Stars high-tech project unit. The first rooms should be online by years end.
Both companies are Cisco Systems partners, and theirs is the first coherent business plan to rise from the wrecked hotel broadband business. Still, expectations are tempered by real-life experience.
“I hope customer acceptance grows next year; I dont really see it growing beyond minimums of 3 percent to 5 percent this year,” said Carl Cohen, vice president of broadband business at Starwood, which operates hotels under the Four Points, Luxury Collection, Sheraton, St. Regis, W and Westin banners. “I think the growth depends on VPN proliferation and consumers comfort level with the broadband service.”
Hoteliers hope that as virtual private networks become more prevalent, corporate clients will coordinate VPN setups with hotel chains so that road warriors dont have to change settings in their machines.
Dont hold your breath, corporate customers say.
Daniel Robinson, a director in SAPs global solutions services organization who used to coordinate the companys remote access, said the in-room access market is nightmarishly fragmented.
“It is sad that the hotel and airport industries got themselves in contracts with small providers who wired the physical infrastructure,” Robinson said, noting about 70 percent of SAPs employees travel regularly. “This is why they are seeing only 1 [percent] or 2 percent utilization.
“I just hope that large hotel chains see the value in being a part of a service organization,” Robinson added. “If they are not signed up to make that available, it really is of no advantage to me as a corporate user.”
SAP, for example, is a customer of iPass, which specializes in roaming services as an access clearinghouse for large corporate customers. SAP found it wasteful to identify different broadband service providers for separate hotel chains, develop special client interfaces and negotiate separate contracts. With iPass remote access service, SAP has one client running on every travelers computer.
Starwood and Unisys hope to sign up with services such as iPass when they get established.
Both Starwood and Unisys did business with the former CAIS Internet, now bankrupt Ardent Communications. CAIS was the biggest player in hotel broadband before exiting, with Ardent President and CEO Michael Lee calling the business a “disaster.”
CAIS installed and owned the in-room networks and customer service systems, but with the new alliance, Starwood will own the infrastructure in its hotels, Cohen said.
Unisys has relegated the ISPs striking deals with Starwood to the role of pipe providers. Using its expertise building customer-retention programs – such as airline frequent-flier miles – it plans to use broadband access in hotels as a perk for travelers using its other programs.
“They will know, through the CRM [customer relationship management] systems tied in with in-room broadband, what is going to make me always come back to those properties,” said Kelly Lynk, managing director of the Unisys/Cisco strategic alliance.