While there is no sales tax on interstate calls in New York, a local hotel was paying an additional 4-percent sales tax to the long distance telephone carrier every month for a long period of time, totally unaware that it was being charged a fraudulent fee . . . 

A Chicago hotel was being billed by a carrier for calls originating from another company located in the same area. The hotel had no idea it was footing the bill for the other firm's phone calls . . . 

An 800-room hotel in a major city, which would normally have qualified for digital service that provides direct answer supervision, was encouraged instead by a vendor to install analog trunks with the vendor's own answer-detection equipment. The digital trunks were less expensive and would have provided better service with more advanced technology. 

These are just some of the telecommunications management problems hotel operators face daily. 

Because most hotels do not have telecom-proficient employees-except in the case of major chains, and even those employees have limited training, experts say- many of these problems can slip through the cracks. 

"Myriad problems can occur on a daily basis," said Don O'Neal, principal with O'Neal/Gaj/Enstar, a firm specializing in telecommunications and data consulting and management. "Some people in charge of telecom at major groups have a limited knowledge of the operational issues on day-to-day telecom activities. In the very large or active properties, there will be a telecom director, but in the vast majority of hotels, the telecom responsibility lies with whomever may have the most experience dealing with phones-the engineer, controller, rooms-division manager, front-desk manager or MIS person. There are no directors of telecommunications at the property level." 

He said for smaller hotels with light activity, one occurrence may not result in a loss of a lot of money, but at business properties with a good activity level, telecommunication problems can add up to significant costs. 

"For example, software in the local carrier's central-exchange office may have changed-perhaps they've upgraded their software and it affects the trunks that the hotel is using," O'Neal said. "At the same time, you may have a switch vendor who is remotely-or on-site-addressing a problem that was reported to them and when they go in to make the correction or resolve the problem, they may accidentally affect routing in the PBX. That may send certain calls over the wrong, higher-cost circuits." 

O'Neal said he has been providing telecommunications consulting to the industry for 17 years. In 1981, there were perhaps 150 different telecom problems. Today, there are 400 to 500 items that can go wrong every day. 

"Because of consolidation in the industry, it's bringing about a collision of need and lack of supply in regard to personnel to provide the services," he said. "When you've got companies like [Starwood Hotels & Resorts Worldwide] taking on Westin and Sheraton, they're going to try to get more properties, but it's unlikely that they'll expand their telecommunications staff." 

Bill Oates, director of telecommunications for Starwood, confirmed the company has not added to its internal telecom staff despite the merger. Starwood's telecom staff is fewer than five people, he said. 

"We're going to use our internal resources as efficiently as we can," Oates said. "We'll focus our internal telecom team on strategic benefits for the corporation, and leverage our size and volume to select providers to fill the voids. Sheraton has always used some level of consulting to do telecom audits of properties and specific telecom projects." 

Oates said he is not ready to completely turn over the management of Starwood's telecom operation to someone outside the company. He said the company has used consultants for decades, and he foresees continuing using consultants on a project-by-project basis. 

Managing technology 

The bottom line, according to Bob Stoutenburgh, principal with the CynterCon, a hotel technology consulting group, is that hotels don't want to manage technology. 

"They want to put heads in beds," he said. "Senior hotel executives and those in human resources don't have the expertise to do the hiring-not to mention there simply aren't enough tech people out there to be hired. Outsourcing simply takes the burden off [these people] who don't want to be in the technical business anyway." 

Stoutenburgh said Hyatt Hotels Corp. was the first major hotel company to outsource its technology. The company's internal technology division, Regency Systems Solutions, was staffed by approximately 150 people, and was working under the direction of John Biggs, then-Regency c.o.o. In 1995, Hyatt was approached by a number of technology companies that were interested in acquiring Regency. 

In August 1996, Computer Sciences Corp. partnered with Sabre Technology Solutions to purchase Regency. Today, the group operates under the name The Alliance, and works under the direction of Biggs, vice president of travel and hospitality for CSC-a $6.5 billion company with 45,000 employees. The group provides support in applications development, telecommunications, infrastructure, help desk, data-center management and technology architecture. Biggs said although The Alliance is managing the technology operation, Hyatt still sets the strategy and provides the direction. 

"Based on our research, we predict that by the year 2000, all Fortune 500 companies will have outsourced some portion of their IT operation to an outsourcing provider," Biggs said. 

Promus follows suit 

Last month, Promus Hotels Corp. signed a partnership agreement with Houston- based Telman, to help manage, set strategic direction and define Promus' telecom standards. 

Promus Hotels' recent merger with Doubletree Hotels Corp. gave the company a portfolio of nearly 1,200 hotels with 177,000 rooms and approximately 40,000 employees. The merger also increased the number of company-managed hotels to 355 from 110. The company's three-person internal telecommunications management team remained intact, with no plans for expansion. 

"You do the best you can internally-then you identify those outside who can take you where you need to be," said Dave Hall, Promus' director of telecommunications. "Promus wanted to work with a company that was very active in the hospitality industry and understood every aspect of hotel telecommunications. By using Telman's resources, we are expecting to maintain a high level of customer service." 

Previously, the Promus telecom team would only provide remote, log-in support. It did not have the money to go off-site, and it did not have a 24-hour help desk, Hall said. Even after the Doubletree merger, Hall said there was limited telecom expertise. A variety of consultants were used across the board, and there was no consistency in pricing or service, he added. 

By teaming with Telman, the improved financial performance for each Embassy Suites property is expected to average $24,000 per year, Hall said. Telman will provide support in three main areas: 
 

Telman President Dan Prosser said Telman is in the process of creating an online help desk that will enable Promus to access property activity reports, and give properties the ability to find immediate solutions to their telecom problems. "Technology is far more important to the industry than selling rooms," he said. "Today, the choice of staying at one hotel over another is based on the hotel's 
ability to support a guest technologically on the road. That changes the entire industry." 

Going it alone 

Bass Hotels & Resorts has decided to keep its telecom department in-house with its 90-member telecom team. While Bass probably has the largest internal telecom staff in the industry, it still must rely on consultants to do some field work. Under the direction of Suzy Carr-Treece, Bass' telecommunications department has four divisions: operations, strategic planning and contracts, engineering, and telecom consulting and support. 

Gustaaf Schrils, Bass' director of hotel telecommunications consulting and support, said he left O'Neal/Gaj/Enstar, where he was a telecom consultant, three years ago. He said the Bass franchise community was in deep need for consulting and management services. 

"We provide fee-based consulting and ongoing management planning for our properties," Schrils said. "What we're finding is that all 2,600 Bass hotels around the world need some type of expert advice. Because our franchise is so large, we're taking a phase approach by providing internal, remote servicing to those hotels that need it the most." 

 He said Bass sees telecommunications as a strategic weapon and a way to move hotels to the 21st century in technology. 

"From 1995 through 1997, we accumulated $11 million in gross profit to the corporation by micromanaging 85 hotels during that 36-month period," Schrils said. 

Bass invested more than $6 million in telecom equipment upgrades during those three-years. 

"We saved $250,000 by setting up a telecom program at just one property in Canada-that was done with less than one week of effort," he said. One way Bass will help its properties select the right technology is through its Tech Pack initiative, which will standardize equipment across the enterprise. The company's OnLine intranet also will help provide 24-hour assistance to properties with specific technology-related questions. Schrils said a chat scenario is in the works to allow properties to share problems and solutions.