MEETINGNEWS.COM
November 22, 2004
Marshall Krantz

Hotel charges for a service that is increasingly indispensable for meetings—high-speed Internet access—are driving planners crazy.

Many planners say they feel frustrated and befuddled by pricing that seemingly defies reason. Prices vary wildly, from several dollars up to several hundred dollars per day for a single Internet connection, often at the same hotel.

The technical complexity of computer networks mystifies most planners. As a result, they're not sure whether they're buying more—or less—service than they need, or even if they're getting what they paid for. They're not even sure about what exactly they need.

"It's like the Wild West," said Jeff Rasco, a partner in the meetings technology consulting company Tech3Partners. "I can pay $9.95 a day to connect to the Internet from my sleeping room, but in a meeting room they may want $1,500. It's ludicrous."

Rasco, who is based near Austin, Texas, said he saved one client $15,000 in connectivity charges at a San Francisco hotel simply by offering considerably less money.

"We went back to them and said, '$17,000? You're kidding. We'll give you $2,000,' and they said, OK," said Rasco. "That's insane. It shows how much the market is confused."

Mary Ann Pierce, principal of MAP Digital, a New York-based consultancy on computer connectivity for meetings, had a similar experience with a Boston hotel just last month. The hotel wanted $8,655 for 15 computer connections to the Internet for three days. She negotiated a price of $2,225 (see sidebar).

Arlene Sheff, a senior meeting planner for the Boeing Co. in Seal Beach, Calif., said a hotel in Huntsville, Ala., quoted rates of $750 per day for the first connection and $150 for each additional connection for eight computers to access the Internet wirelessly from a meeting room.

Finding Quick Work-Arounds

"I'll pay that much money for training, but we only wanted the Internet access so that people could check their email," Sheff said.

Sheff instead told the Boeing executives attending the meeting to check their email from the hotel lobby, where a wireless base station was set up for hotel guests. As it turned out, the signal from the lobby base station reached the meeting room too, so the Boeing executives didn't even have to leave the area.

In a survey of planners who attended a course Pierce taught last year during a Meeting Professionals International convention, more than half the planners said controlling costs was the biggest challenge they faced when deploying Internet connectivity onsite.

"Planners are overcharged because they don't understand connectivity and the price points," said Pierce.

Said Rasco, "There are not that many truly knowledgeable people. Planners don't know enough to ask the right questions, and hotel people don't know the answers if they're asked."

David Riley, vice president of catering and meeting services for Wyndham Hotels, agreed that computer connectivity pricing at hotels is "a mystery."

"As an industry we are all over the place," he said.

At the Wyndham-brand properties it owns and manages, Wyndham charges $150 per day for the first connection, or drop as it's commonly known, in a meeting room, according to Riley. For additional connections, individual properties determine pricing, he said.

Demand by meeting planners for Internet connectivity at Wyndham properties has tripled over the past year, he added.

Wyndham's primary Internet provider is Wayport, one of the largest suppliers of Internet services to hotels and conference centers in the United States and Canada. The Austin, Texas-based company serves nearly 800 properties.

Full-service city hotels that are wired by Wayport charge about $100 to $500 per day for the first Internet connection in meeting rooms, according to Greg Purcell, the company's director of e-sales and e-partnerships.

Hotels negotiate additional connections at volume discounts that can drive the price down to $15 per connection per day, Purcell said. In addition, companies with sizable meetings business can negotiate cross-property volume discounts with hotel chains, as they do with other goods and services.

Hotels served by the No. 1 Internet provider, STSN, charge hundreds of dollars per day for the first connection in a meeting room and in the low hundreds for each additional connection, according to Jim Elliot, the company's vice president of marketing.

But like Wayport properties, hotels at STSN-wired hotels offer volume discounts that can reduce the overall cost considerably, he said. The Salt Lake City-based company serves about 1,000 hotels and conference centers.

Both companies will consult with planners on their needs prior to a meeting and provide technical support during the event at no additional charge.

Market Forces

Prices for the same services at different properties are largely determined simply by what the market will bear—how much Internet providers charge hotels, plus a mark-up.

"A cheeseburger costs more in a Manhattan hotel than a hotel in Denver, and it's the same with connectivity," said Elliot. "The price difference can be five orders of magnitude depending on the facility and part of the country."

Connectivity charges also are determined by the amount of Internet traffic a meeting generates, along with the group's computer security needs. More traffic and tighter security place greater demands on the services and infrastructure of Internet providers, and thus result in higher prices.

For example, attendees who occasionally check email from a 20-terminal cybercafe may consume less bandwidth (the data-carrying capacity of an Internet line) than attendees at only 10 computers but who watch an online demonstration containing streaming video.

The most common kind of Internet connectivity to hotels—and many offices—is a T1 line, which provides 1.54 megabits per second of bandwidth, more than 25 times faster than standard dial-up. The high bandwidth of a T1 line not only enables fast connection speeds but also more Internet traffic through the same line.

But too much data traffic on an Internet line acts like too much automobile traffic on a highway—the overload causes a slowdown. So planners may demand a dedicated T1 line or a large-enough fraction of the line to ensure that their attendees receive enough bandwidth to maintain consistently fast speeds. (A dedicated line also enhances security from hackers because the group does not share the line with outside users.)

But some planners, without telling the hotels, will configure several computers to access the Internet through the single connection the hotel provides. They, or more likely their tech consultants, build a local-area network, connecting all the computers to a central router. Then they connect the router to the Internet cable in the meeting room.

Technical Limitations

Purcell said the unexpected drain on bandwidth can slow or disrupt the Internet connection of other meetings if, as is often the case, the groups are sharing the hotel's total supply of bandwidth or the amount allotted to the meeting space.

"You don't want to undermine one person who is making a presentation in another meeting room and who paid the same price as a group of users in another room," he said.

But Pierce contended that planners who contract for fractional or full T1 lines should not have to pay extra for each computer that accesses the Internet, because the group uses the same amount of bandwidth no matter the number of computers.

"This is a way to charge extra for the same bandwidth," she said.

"My Irish gets up when I see the waste in time and money and the failures endured because of the lack of understanding about onsite meeting technology," added Pierce, once a producer for Jack Morton Worldwide whose present clients include J.P. Morgan Chase and Deutsche Bank.

"If I can get a handle on the technology, so can many planners if they are motivated to learn. Saving nearly 75 percent of quoted prices would motivate me."