Starwood Sees $$$ in Wi-Fi

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NEW YORK — Having invested heavily in Wi-Fi at hundreds of
locations worldwide,

hospitality giant Starwood Hotels & Resorts is crossing its
fingers that the

unrelenting promise of a wireless world will justify the million dollar
investments.

In a frank discussion at the iBreakfast Conference series here,
Starwood’s VP of technology

business and systems strategy Carl Cohen lamented the absence of a ‘killer
app’ to drive

enterprise Wi-Fi adoption, and warned of an “uncertain path” for businesses
jumping on the Wi-Fi bandwagon.

“We have to put in hundreds of access points in each building because our
guests have high

expectations for the service. It’s a dramatic investment. They tell us
we’ll have many, many

many wireless users soon. But, when is soon?” Cohen said.

“The hospitality industry is taking huge beating. This will all be based
on return on

investment. It’s about Wi-Fi generating revenues and cost savings
immediately. We’re not

trying to prove that it makes sense to do this,” he added.

In partnership with Unisys, Starwood has added Wi-Fi
hotspots at 750 hotels

and resorts around the world and the company has launched experiments with
new wireless

initiatives aimed at saving on operational costs.

Instead of putting all its Wi-Fi eggs into the subscription-based basket,
Cohen said hotel

maids/cleaners and servers at resort restaurants and bars would be working
with 802.11b-enabled

PDA devices to speed up service for customers.

Cohen said Starwood — which operates the Four Points, Sheraton, St.
Regis, Westin, and W

Hotels brands and 18 time-share resorts — would continue to experiment with
new applications aimed at increasing guest loyalty and adding to the revenue
pot.

“It’s no secret that we believe in Wi-Fi. We have spent dramatically on a
Wi-Fi strategy. In five years, we think Wi-Fi will be ubiquitous and we want
to be part of that momentum. But we need to find the value. Where is the
killer app? How do we leverage it?” Cohen said.

Today, Starwood does not charge for access to its hotspots
but Cohen said that could change. “We’re still in that
uncertain period. We’re trying to figure out what the model will be. We
believe that the revenue pie will grow ten times with Wi-Fi. Will it be
subscription-based? Will it be free? We just don’t know. We’re not sure
where the market is going,” he added.

Cohen said there was “high value” for wireless access in meeting rooms,
especially because Starwood has complete control of the availability of the
Wi-Fi signals. “In common areas and in meeting rooms, we can control it.
We can wheel in access points to any meeting room because there is high
opportunithy for revenues from that.”

To rationalize the investments, Starwood has joined Intel’s Centrino wireless program, which will equip an additional 150
hotels in North America by the end of the summer.

The wireless housekeeping pilot, where cleaners and maids carry a Wi-Fi
PCA, a device that connects them in realtime to room inventory, is another
area where guest satisfaction and improved inventory management can be
improved, he said. “This test went live about three weeks ago. If this is
successful, it could potentially stand on its own.”

“We are searching for that application. I don’t see a killer app that
will make the difference in our industry,” he said. The other pilot, a
Restaurant Point of Sale (POS) unit, allows servers and runners with
wireless PDAs to quickly fill orders at resorts. “The runner is bringing the
food and drinks much faster. It keeps our guests happy and that’s crucial
for us.”