If memory serves it was during the late summer of 1980 that I experienced the first of what has now become many altercations with hotel staff over the cost of telephone calls. I was in Stockholm, Sweden in a hotel where I had stayed a number of times before. Struggling to make ends meet as a student, I was paying my way through the university by delivering art around the world for a specialist courier company. 

Upon entering the hotel guestroom, it was immediately apparent that this time something was different from my last visit. On the desk, by the bed, and in the bathroom no less were three brand new executive-looking telephones. I was impressed. Instead of being a poor, struggling, and I have to say, somewhat scruffy student, I had now joined the business elite. I was rubbing shoulders with the rich and famous and I was going to prove it to myself by making a few phone calls. So I did. 

Not for long, and perhaps for only an hour in total, I called my family and a few friends in U.K. and chatted away confident of my new-found status, and equally unaware of the consequences that increased with every minute that passed. I slept soundly that night reflecting on my newly discovered capability to make phone calls around the world from the comfort of a hotel room. But it was not until the next morning at checkout that I discovered the true cost of joining the executive elite�a huge bill, from memory at least $600, and from painful memory just about every penny that I had in my bank account at the time.

So that was then, a time of telephone monopolies and high call charges. Where I lived you had to wait six months or more to get a telephone installed in your house. Of course telephones were expensive. Me? I was just young and stupid.

So what of now? We live in a world where mobile phones dominate our lives. The Internet has undermined fixed line telephony to such an extent that many of us no longer even bother to install a home telephone relying instead on our mobile phones. Free long distance calls, hundreds of talk-time minutes for a few dollars and the new world of Skype and the other new VoIP services. How have things changed?

From the hotelier�s perspective the answer sadly is not much. Recently I was staying at a good hotel on the U.S. East Coast. My tasks that day required me to attend a conference call which was to last about an hour dialing to a 641 area code. As I was required to run the call, and requiring high call quality, I chose to use the hotel supplied desk phone rather than my mobile phone. Some 54 minutes later when the call ended I reviewed the folio on my television, expecting the call to have cost between $10 to $20 which would have been a significant mark up, but worth it to me for the convenience of using the desk phone, and certainly not out of line in a hotel where a gin and tonic costs $16 plus tips and you don�t get much change from $50 for room service breakfast. I was, however, not prepared to see a charge of slightly more than $194, a massive mark up and to me then and now, simply outrageous. 

I looked around the room to see if there was any information detailing telephone call charges. There wasn�t. So, as I have become accustomed to, I headed off down to the front desk to debate the charge. �We charge twice the AT&T operator assisted rate� the front desk agent chirped parrot fashion when asked to explain the charge, and as she presumably had done many times before. She wasn�t however, as well prepared for my next questions, �Ok, so explain that to me, what does twice the AT&T operator assisted rate mean? How much is the AT&T operator assisted rate to my called destination?� 

She developed a nervous stammer and admitted she didn�t know but would ask her supervisor. Not surprisingly, he didn�t know either and suggested that he would ask the finance department for an explanation if I was prepared to wait. I was, and suggested that he could take a few hours to obtain an accurate answer, oh, and could he please also ask the telephone department for the call detail record so that I could see the actual call cost. 

A few hours later, I received a call from a rather embarrassed front desk supervisor. Neither he, nor anyone else could provide the AT&T operator assisted rates to my called destination, and, in a voice amounting to little more than a whisper he said, �The actual cost to the hotel was $1.03 for the total 54 minutes of your call. Can we offer you a refund?� 

I inquired how the call charges were established in the first place. �We survey our competitors from time to time, and make sure that our charges are the same,� he said with conviction sure that if his competitors charged the same rates he was justified in charging me at rates off the scale. I, not surprisingly, have a different view. The excessive gauging of hotel guests who are foolish enough to use the hotel telephone has driven them away to their mobile phones by the millions. Very few guests would now pick up the telephone to make a paid call. The trust is gone and we may never earn it back.

For obvious reasons, guestroom voice revenue is disappearing fast and, equally obvious, as a consequence hotels are increasingly reluctant to invest in new PABXs as revenues to justify the acquisition are not there. Today the hotel industry stands at a voice-telecom crossroad. Hotels need to do something different, but they don�t know what to do. The only responses so far are either to give everything away�wrong�or try and maintain revenues by charging fewer guests more�equally wrong. The traditional PABX manufacturers also have no idea what to do. Today�s IP PABXs offer little additional functionality beyond a dial tone although they could do much more, and more importantly, they cost the same or more than the previous generation analogue model. 

Doing Nothing Is Not an Option
                            
We need to think differently, and importantly, from the guest point of view. I have listed here a few things that are top of mind to me as I attempt to address the problem. Your list may well be different, but at the very least you need to do something. Doing nothing is no longer an option.

On this page are some examples of next generation thinking. There is nothing futuristic or radical here. All of these capabilities exist today, except perhaps the open minds needed to implement them in a hotel. 

One thing is sure: if we continue to do nothing new, seek to maintain revenues by charging fewer and fewer guests more and more, then our guests will increasing distrust us and they will take their distrust with them every time they visit the bar or restaurant or call our reservations call centers. Equally certain in this view of the future are that hotels will come to realize that you don�t need carrier grade equipment for guests to order room service, or have their clothes laundered. If guests are not going to use the telephone to make revenue generating telephone calls then don�t be surprised to wake up in a hotel room one day and see a big red button on the wall with a sign by it that reads �push for service.�
 

Nick Price is the group CIO/CTO for Mandarin Oriental Hotel Group.

© Hospitality Upgrade, 2007. No reproduction or transmission without written permission.