Room Service Providers

Don DePalma is no technology novice. The VP for corporate strategy at software company Idiom in Waltham, Mass., DePalma is enough of a geek that he installed a router in his home so he and his two kids could surf the Net at the same time. In other words, he's exactly the kind of tech-savvy customer San Francisco's Ritz-Carlton Hotel is trying to attract by offering high-speed Internet access in its guest rooms.

Too bad DePalma couldn't get the service to work. When he stayed at the Ritz last summer, he spent 15 minutes tinkering with his laptop and the red Ethernet cable snaking out of the answering-machine-size box on the desk. Losing patience, he shoved the cable aside, connected his laptop to the phone and sat back while his e-mail downloaded at a poky (but familiar) pace. "It was really a frustration," he recalls. "There was so much bandwidth waiting there. Instead it took an hour synching at 42K."

Over the past couple of years, hotels have spent millions of dollars equipping their rooms with high-speed Internet access. According to research firm Cahners In-Stat Group, the market for supplying broadband hardware and services to hotels was $59 million last year; that's expected to grow to $679 million by 2005. As a result, as many as 10 percent of U.S. hotel rooms now have some form of broadband access; Jupiter Research predicts that half the hotel rooms in the United States will be wired for high-speed access by 2002.

But few guests are taking advantage of in-room broadband - either because they don't know it's there or because, like DePalma, they can't get it to work. Most estimates peg the percentage of guests using these services in the low single-digits; by contrast, pay-per-view movies lure about one-third of hotel guests, "adult entertainment" more than half.

Despite the low take-up rates, hoteliers are adamant about adding high-speed access to their menus of amenities. "The demand by the business traveler to have his connection is certainly there," insists Mark Hedley, senior VP and CTO at Wyndham Hotels and Resorts. That's why Wyndham is wiring virtually every room in its 144 properties, which includes luxury resort Carmel Valley Ranch in Carmel, Calif., with T1 lines to offer speeds up to 50 times faster than ordinary phone lines.