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What's Up With Call Accounting Systems 
(CAS)
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This article is from the Fall 2001 issue of Hospitality Upgrade Managzine
By Dan Phillips

If you are new to the hotel business, you probably don’t even know what a call accounting system (CAS) is.  And with good reason.  There is so little telephone revenue in hotels these days who needs a call accounting system!

Telephony 101

Here is a quick refresher:  a guest makes a phone call from his room; the phone system (PBX) enables the call; when the caller is done, the PBX sends out a stream of data (SMDR) that includes the room number, the duration of the call, the time of the call, the called number, and so on, to the CAS; the CAS then checks the call data against its records and adds a price to the call; then, the CAS sends this data stream, with the price of the call, to the property management system (PMS) to be posted to the guest’s folio.  This is simple stuff.

Unless you’ve been stuck in the banquet storage closet for the last couple of years, you are only too aware of the rapidly diminishing telephone department revenues at your hotel.  It used to be that phone revenue accounted for 3 percent of a hotel’s total annual revenue.  It used to be that the telephone department ran at about an 80 percent profit margin.  It used to be that guests made direct dial phone calls from their rooms.  It used to be that no one had ever heard of a data port and only the richest people had cellular phones.

This soapbox is too small for me to wax eloquent on, but hotel telephone revenues are disappearing for a variety of reasons.  Therefore, it would seem that a hotelier would not be inclined to spend any more money on something like a new call accounting system.  Why shuck out hard earned dollars on a piece of equipment that only reminds you of how much money you are losing every day?

I asked several CAS vendors to help me out with this article.  Many of their responses to my inquiries were enlightening.

Some studies show that 85 percent to 93 percent of all guest calls are free.  What does that says about the future of CAS?

Overwhelmingly, the vendors urge hoteliers to compete.  I feel that hoteliers have done a terrible job of protecting their biggest asset toward revenue generation, that being the guest in their own hotel guestroom.  We, as an industry, have given access to our guests to TV and movie providers, calling card providers, cell phone providers, high-speed Internet providers, even to the Pizza Hut down the street.  

A hotel can no longer combat dwindling revenues by increasing call charges.  You must compete by providing and marketing aggressive calling packages.  Offer $.10 per minute domestic calling to your VIP guests.  Offer $10 unlimited domestic calling to your corporate clients.  Promote Happy Hour calling to your guests; anywhere domestically at $.05 per minute from 4-6 p.m.  Or, a great idea:  determine your current telephone revenue per occupied room figure, add that to your room rate to guarantee the same return, then, give free local, toll-free and 0+ access (with threshold billing of course) plus $.05 per minute domestic calling.  All of this traffic would then be gravy on top of your previous average telephone revenue figures.

The CAS vendors also see their equipment as a valuable management tool.  Unfortunately, this tool has been tremendously underutilized.  The typical reaction from most hoteliers is that they are in the hotel business, not the telephone business and therefore can’t be bothered with looking at telephone reports.  To that, the vendors unanimously suggest that consultants be used.  However, these systems do generate reports that could be very beneficial to a hotelier:  calling patterns that show where your guests come from so that you can market to that geography or negotiate with long distance providers; information on where your guests are making their next hotel reservations; evidence of fraud by both guests and staff; trending such as calling card and ISP connection increases; and, guest service issues such as the number of trunks to provide to prevent busy signals.

In general terms what is the breakdown or ranges of pricing mechanisms applied by your users?

Call Type Pricing Ranges
 

Local   Only a small percentage give this for free; from $.50 to $2.00 and most employ threshold billing, $.10 per minute after 20, 30 or 60 minutes.
0+   Most provide this for free, though, legally, it should be the same as local.
Toll-free   Legally should be same as local and 0+, some still give for free, but most charge same as local with threshold billing.
Domestic   The highest first minute cost; $11.00.  The lowest first minute cost; $.10.  Additional minutes range from $.10 to $1.25.
International   Surcharges ranges from $3.00 to $9.99.  Most per minute rates are based upon AT&T operator-assisted rates, plus mark ups ranging from 30 percent to 125 percent.
Information   Flat fees range from $.50 to $2.00.

Where is the pricing of phone calls going and are they based on carrier tariffs, or are other models coming forward?
 

It appears that most hotels are moving away from basing their rates, which used to be the standard, on AT&T operator-assisted day time rates, plus a hotel mark up.  Who knows how AT&T has gotten their hugely inflated rates past the FCC, but it is good to see hotels no longer using those rates as a benchmark.  It appears that many hotels are not setting their own rates, a surcharge and then a flat fee per minute, plus applicable taxes.  Some hotels still set their rates on “what the traffic will bear.”

What are the most important things to do to maximize efficiency in revenue capture?
 

Ensure that the CAS processes every single call record it receives from the PBX.  Make sure that tariff updates are done regularly.  Make sure that the database (guest, admin and meeting room extensions) is loaded correctly and updated as needed.  Check PMS to CAS interface frequently.  Assign the night auditor the task of reconciling the CAS and PMS reports nightly.  Ensure that answer supervision is working at all times.  Review monthly reports for trending and adjust pricing to maximize revenue potential.  Audit telephone bills against CAS reports.  If the hotel has two extensions per guestroom, ensure that the second extension is loaded into the CAS, and even the PMS.

What are recommendations on how to rectify vanishing telephone department revenues?
 

In one loud chorus, COMPETE!  Diane Estner of SDD, Inc., may have the best thoughts. “Become proactive in managing your telecommunications.  Think outside the box in creating new or expanding existing revenue opportunities.  Encourage and allow guests to make calls from any property telephone.  Consider pre-pay or happy hour calling programs to pre-sell or encourage people to use your phones’ Internet access on off-peak times.”

Where is CAS going?
 

Call accounting is turning into communications accounting.  Hotels will need to price not only the voice calls but the data calls (Internet access) as well.  The pricing of data calls cannot be the same as voice calls or it will drive guests away too.  Enterprise-wide solutions, where a management company could have a CAS server at a central location, are coming as well.  This will allow a company to make portfolio-wide changes with a single keystroke.  Ron Contrado of HOMISCO, Inc. said, “An ASP call accounting application is definitely a big part of the future.  With cutbacks and consolidation in all arenas, having an IT person or someone with an advanced skill set is not practical.  The investment in hardware onsite as well as that of an FTE is being weighed against the revenue and efficiency that can be achieved by having the application resident remotely with access from anywhere via the Internet.”

What are some interesting or unique applications of CASs?
 

John Brissenden of Metropolis Technologies, Inc. said that his system is being used at Midway Island, a former U.S. Navy base, to bill for guest usage of hotel-rented cell phones.  HOMISCO has four hotels in the Grand Canyon all using one CAS.  SDD has its system being used to post charges for bottled water and other customer-defined amenities.  Don Riegel of XETA Technologies said that the FBI has worked with his company to track criminal calling patterns.  Other uses include: identifying employee telephone abuse; assigning and de-assigning DID numbers and class of service; assigning authorization codes for guest use anywhere on a hotel site; and, connecting vastly remote sites via the Internet or satellite for pricing, bill generation and collection.

Guest-centric pricing is the ability to assign calling rates or programs to guests based upon their check-in status.  Guests paying rack rates would be charged on one calling platform, while VIPs or loyalty guests would be charged on another platform.  

What will it take to allow for real, automated, guest-centric pricing? First of all, it will take a two-way interface from the PMS.  Hoteliers must begin to demand this ability from their PMS vendors.  Most call accounting systems today are prepared to enable this feature, once the PMS companies send this information.

CAS is not dead.  If anything, it is a wonderful tool that has been mismanaged and underutilized.  The future of hospitality is personalization.  CAS will become a valuable asset.  Do your homework; take the time to investigate your current and future CAS needs.

The author would like to thank the following people for their contributions to this article:

  • John Brissenden, Metropolis Technologies
  • Ron Contrado, HOMISCO, Inc.
  • Rebecca Dixon, @Comm Corporation
  • Diane Estner, SDD, Inc.
  • Don Riegel, XETA Technologies
Dan Phillips is COO of ITS, Inc., a consulting company located in Alpharetta, Ga.  For further comment, he can be reached at dphillips@its-services.com or by phone at (678) 802-5100.
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Contact:


Geneva Rinehart
Associate Editor
Hospitality Upgrade magazine 
and the Hospitality Upgrade.com website
http://www.hospitalityupgrade.com
grinehart@updateplus.com

 
Also See: Effective Customer Relationship Management (CRM) Implementations / John Schweisberger and Amitava Chatterjee, CHTP / Hospitality Upgrade Magazine / Fall 2001 
Technology Dilemmas: What have IT investments done for you lately? / Elizabeth Lauer / Hospitality Upgrade Magazine / Summer 2001 
Full Circle from Centralized to ASP - The Resurrection of Old Themes and a Payment Solution / Gary Eng / Hospitality Upgrade Magazine / Summer 2001 
A High Roller in the Game of System Integration / Elizabeth Lauer / Hospitality Upgrade Magazine / Spring 2001 
CAVEAT EMPTOR! Simple Steps to Selecting an E-procurement Solution / Mark Haley / Hospitality Upgrade Magazine / Spring 2001 
Your Bartender is Jessie James and He Needs to Pay for College / Beverly McCay / Hospitality Upgrade Magazine / Fall 2000 
Choosing a Reservation Representation Company / John Burns / Hospitality Upgrade Magazine / Spring 2001 
Understanding and Maximizing a Hotel’s Electronic Distribution Options / by John Burns / Hospitality Upgrade Magazine / Fall 2000 
The Future of Electronic Payments - From Paper to Plastic and Beyond / J. David Oder /  Hospitality Upgrade Magazine / Summer 2000
Timeshare Technology Steps Up / by Elizabeth Lauer / Hospitality Upgrade Magazine / July 2000 
Biometric Payment: The New Age of Currency / by Geneva Rinehart / Hospitality Upgrade Magazine / Mar 2000 

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