Owners/Operators Have New Say In Tech Arena

The Hospitality Technology Consortium (HTC), which was formed in February of this year by Jim Kennedy, William Meyer, Richard Jabara and Gary Plott, was created to represent owners in the technology marketplace and use the aggregate power of its members to purchase products and services. HTC made its mark last month with the signing of its first deal with Everest Broadband Networks for its high-speed Internet access, called FastRoom. Twenty-four Meyer Jabara Hotels will install the system, which offers a range of broadband services, including Internet access, e-mail, back office Internet capabilities, flexible rate structures, firewall and other security features. HTC negotiated with Everest on behalf of Meyer Jabara for eight months before closing the deal, and an additional 250 hotels are expected to sign with Everest through HTC in the near future. Already, owners representing more than 700 hotel properties have shown interest in the deal, according to HTC, which is targeting small- to mid-size management companies and independent operators for membership. “We’re looking at this from the perspective of the owner/operator,” said James Kennedy, a founder of HTC and CEO of Danbury, Ct-based The Network Supply Co. “These small management companies don’t have a CIO, they don’t have the skill to go out there and review all the emerging technology systems and make a decision. That’s what we will do for them,” he said. HTC will work with small companies with less than 40 hotels to determine what they need, and will then “do research, make recommendations and negotiate with the vendors to get the best deals,” said Kennedy. The group combines the knowledge of founders Kennedy, Meyer, Jabara and Plott, who have a total of more than 90 years of industry experience. According to Kennedy, HTC will do more than bring these properties the technology they need; it will “mediate conflicting interests between the owners and franchisors and vendors. “We can tweak some of these [technology]systems to the owner’s great benefit, and often they don’t even know that it can be done,” he said. Kennedy, who has worked with Marriott for years and also sat on Bass Hotels’ technology advisory board, said he saw a need to understand and represent the owners in the industry. The Everest deal is uniquely structured in that it is fee-based, rather than a revenue-sharing model. This means that Everest will be paid for its platform by each hotel. In turn, each hotel has the flexibility to retain complete control over in-room pricing and keep 100% of room revenue generated by the high-speed Internet access. Or hotels, if they choose, can offer the Internet service at no charge to guests. The structure is important, according to Jabara, who noted that many vendors are going out of business because they began by giving their services away. “This way [with Everest]everyone can make money and stay in business,” Jabara said. In addition to Internet acces, the Everest platform will provide HTC members with a Virtual Private Network for back office communications and a web-based financial modeling tool to assist hotels in making intelligent marketing decisions. High-speed Internet access was HTC’s first focus; however, the company has plans to move on to other technology initiatives essential to successful hotel operations including on-line purchasing and back office applications, according to Kennedy. Moving forward, HTC will be directed by a technology advisory board consisting of representatives chosen from member ranks. The group is currently searching for a CTO, who will take over the majority of the technology research currently being done by Kennedy. Primary funding for the group will come from a percentage override from the vendor’s share of any deals the consortium negotiates, or from member fees.