Industry banks on alternative, more efficient solutions
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National Report–Given the state of the economy, business-spending habits for the remainder of 2008 and looking forward to 2009 are changing. Within the lodging industry, hoteliers are increasingly forced to evaluate spending cuts to offset dips in occupancy that most likely will lead to lower revenue.
Information technology budgets are often the first to be trimmed. Hoteliers and hospitality IT professionals are challenged with operating at minimal costs and developing cost-saving opportunities, all while providing guests the conveniences of home and masking any deficiencies.
 Maradik GAYLORD |
According to The Boston Globe in early 2008, Forrester Research released a report saying, "U.S. companies and government agencies are expected to increase their spending on information technology by just 2.8 percent this year. That is a substantial downward revision from the 4.6 percent growth that Forrester was predicting in December."
While the economy teeters on the brink of a recession, significant advances in technology flourish. As a result, hoteliers struggle with high-cost upgrades needed to provide the best broadband access, wireless Internet, high-definition television, property-management and yield-management programs and point-of-sale equipment.
Gaylord case study
In March, Gaylord Hotels took a big step by deploying wireless networks throughout each of its four resorts, providing guests with seamless Internet access in all guestrooms and public spaces.
 Gaylord's new D.C.-area Gaylord National property charges guests an additional $5 for wireless service as part of its resort fee. |
Gaylord's chief information officer, Rich Maradik, was an integral part of the decision-making process.
"At the end of the day, one challenge technology has in general is that if it doesn't have fully understood long- and short-term plans to add value to the business plan, it's difficult to get anything done," Maradik said. "The c.e.o. and the board both have to know the context. You have to be able to say, 'here's where IT fits into the business plan,' and if everyone is on the same page it helps."
 McKeand WAYPORT |
Maradik helped Gaylord develop a three-pronged review process to determine whether funds should be allocated to new technologies. A technology board meets monthly to review new services and products, analyzing effectiveness, efficiency and value.
"When it comes time to implement a value plan so we can make an allocations decision, we look at a five-year road map," Maradik said.
When pondering whether to install a wireless network, the board dug even deeper. Maradik said Gaylord implemented three phases of investment: give customers what they want, drive back-end savings (such as internal cell phone cost reductions) and deliver a wireless experience that will drive return customers.
So how did Gaylord afford completely rewiring all four resorts? Easy. They charged the guests.
"We raised the resort fee another $5," Maradik said. "It's what you pay when you go to the resort; it's not an opt-in feature," he continued. "Before it was $10, now it's $15. With the additional costs, you get a couple bottles of water, wired and wireless Internet access.
 Sfakiyanudis ETELEMETRY |
"We think it stacks up pretty well for the value," he said.
Maradik said Gaylord executives realized there would be a significant up-front cost to install the system, especially with the sheer size of the four resorts. But, he said the culture at Gaylord is to invest in tools that make the guests happy—not to mention the return on investment analysis that resulted in a 7- to 10-year payback.
"When we looked at our competitive set, most resorts were offering an opt-in model where guests must pay per day for wireless access," Maradik said. "If you look at what we provide in our resort fee, it actually will cost the guest less."
