Should hotels give away their Internet access in rooms? InterTouch CEO Charles Reed does not think so. He speaks to Yeoh Siew Hoon on how his company is treading that fine line between meeting growing customer demand for free access and the hotels' need to offer a service that works.

Charles Reed (pictured right), the CEO of InterTouch, does not need any survey to tell him that hotel guests are revolting over having to pay for Internet access in their rooms.

He knows that "the natives are restless" and his company, which provides wired and wireless broadband connectivity services to hotels, is under siege to free the pipelines, as it were.

Take the latest survey from silicon.com which said that more than half of respondents to its poll believe hotels must stop charging paying guests altogether for Internet access, branding it "a rip-off", and a staggering 98 per cent of respondents said charges are too high.

One silicon.com reader said large hotels have no excuses. "Large business-traveller hotels have the IT infrastructure already in place and if you are positioning yourself as a business traveller's hotel, then not providing free broadband access is a joke in today's tech world."

Another reader wrote: "Broadband access should always be 'free'. Just like hot water and lighting, it's an essential element of the room for the business traveller."

Access a human right

Said Reed, who is based in Singapore, "People now see it as a human right, like the right of education. My argument is, there are two tiers at work here. Tier one – universities, schools, yes there should be free access. But tier two, places like five star hotels, should it be free?

"Hotels are in a very difficult position. The guest is always an important guest. If someone wants something at 2am, you get it. The last thing you want is to be woken up at 3am by a guest who says, the Internet doesn't work.

"So they need providers like us to provide a managed service so that the headache is taken away.

"They have to offer a service that works because their guests expect it, but if it's free and it doesn't work, who do you call?

Reed knows though he cannot ignore the inevitable and his company is working on a pilot project with a hotel in Kuala Lumpur in which it is offering some things for free and some things on a pay-per-use basis.

"There is a trend towards charging for different applications and different services and that makes sense. For example, hotmail, Yahoo and MSN should be free and other sites should be charged. And for VPN (Virtual Priavte Network), the charges should be higher because you need guaranteed bandwidth.

"That way, it still means nice revenues for hotels. The idea is to identify which customers want what service. We will develop a menu of services and do guest segmentation and come up with a price plan that covers everything."

Reed said InterTouch was developing its own software for the new service and was working with hotels on packaging and bundling the services.

"This is the way the industry should move forward; it allows our hotel partners to focus on their guests' needs."

Nothing free in this world?

Reed said giving it away for free was not the solution. "We have talked to hotels in the US who gave it away and they say, that's the biggest mistake we made. Economics will come in at some point and you have to pass on the costs, and then you end up with unhappy, disgruntled customers."

He said hotels had to protect their brands. "If you want high security, high reliability and consistent service, you have to find another way of keeping the customers happy."

On the development of VoIP technology and players such as Skype which have changed the rules of the telephone game, Reed said that what Skype had revolutionized was the cost structure, not the technology.

"If you think about the old pony express concept, the longer the distance, the more it cost. Traditional telephone calls were based on that model. Skype and VoIP destroyed that cost structure and showed that services did not have to be priced by distance or by quality or service differentiation.

"That's extremely powerful."

He cautioned hotels however to beware the hype of VoIP technology. "Creating revenues out of VoIP in hotels is tough. Most lose money but they pass on the savings to the customers. It's like buying wholesale and selling retail."

Watch that TV screen

The other note of caution he sounded was over the choice of television screen.. "From a brand perspective, most hotels are going flat screen high-definition or LCD. But you can't tell the difference really between the two – and people are not really making content for high-definition screens. So the danger is you end up with no content. It's like you've bought these super petrol pumps and no one's got petrol, and you have to put alcohol in it.

"So don't overpay for that, wait for content to catch up."

Reed said the world of telecommunications was changing rapidly and InterTouch's responsibility was to make life easier for its hotel customers. "We have to take away the complexity and make things easier for them.

"We have to help them grow revenues and increase share of wallet of guests by looking at ways of generating more revenues from guests and customers and to ensure we deliver the service efficiently.

"So our mantra – nice revenues, no headaches."

It currently has 330 hotels as "live" customers and is installing 20 hotels at any one time.

Its clients include Hyatt International, Hilton Hotels Corporation, Four Seasons Hotels and Resorts, InterContinental Hotel Group, Le Meridien Hotels & Resorts, Marriott, Mirvac Hotels & Resorts, New Otani Hotels, Oberoi Hotels and Resorts, Oakwood, Pan Pacific, Ritz Carlton, Shangri-La Hotels & Resorts, Sheraton Hotels and Resorts, Stamford Hotels & Resorts and Thistle Hotels.

The SHY Report
A regular column on news, trends and issues in the hospitality industry by one of Asia's most respected travel editors and commentators, Yeoh Siew Hoon.

Siew Hoon, who has covered the tourism industry in Asia/Pacific for the past 20 years, runs SHY Ventures Pte Ltd. Her company's mission is "Content, Communication, Connection".

She is a writer, speaker, facilitator, trainer and events producer. She is also an author, having published "Around Asia In 1 Hr: Tales of Condoms, Chillies & Curries". Her motto is ‘free to do, and be'.

Contacts: Tel: 65-63424934, Mobile: 65-96801460

Yeoh Siew Hoon's other writings can be found at www.thetransitcafe.com . Get your weekly cuppa of news, gossip, humour and opinion at the cafe for travel insiders.

interTouch, ( www.inter-touch.com )is a premier provider of fast, reliable and secure wired and wireless broadband connectivity services to the hospitality industry. Our one-stop-shop solution, round-the-clock network monitoring and multi-lingual customer support enable more than 400 hotels in 45 countries to offer a superior guest experience.  We manage over four million connections every year, allowing travelers and conference attendees to enjoy communication, information and entertainment services from multiple locations.