By Marty R. Milette
As an hotelier, you must be concerned over plummeting hotel
telephone service revenue. Thanks to mobile phones, what was
once a sweet addition to the bottom line seems to have
forever but what can be done?
The answer may lie in taking advantage of Voice-Over-IP
Telephony or VoIP to put telephone revenues back on the bottom
line while at the same time offering your guests better
service and lower cost than they can get from their own mobile
This article describes VoIP and how it can be used by
to rebuild guest telephone revenue, reduce the expense of the
hotels own telephone service costs, enhance your guest
portfolio and add a differentiation factor against your
Guest Perceptions of Hotel Telephone Service
As a small-business traveler with some degree of price
sensitivity, I am terrified of even picking up a hotel
telephone for fear of the charges. With many European hotels
charging 4 to 6 per minute for international calls or even
more little wonder guests seek alternatives.
As a result, rather than using the phones in the bedrooms,
guests will use their own mobile
(cellular) phones because of the perception that it will be
cheaper and/or more convenient.
While certainly being more convenient, when the guest returns
home and sees what their mobile operator charges for
connections, roaming charges and long distance service outside
their home area they discover that perhaps the hotel phone
may have been a better option after all.
Recently, a European Commission investigation of roaming
rates for European operators found that mobile operators
universally overcharge their clients while roaming.
As an example, they cite a UK subscriber calling the UK from
Italy would cost anywhere from 3.50 to 5.81 and receiving a
call in Italy from the UK would be 1.75 to 5.50.
In another example, calling the UK from Malta ranged from
to 7.34 while receiving a call in Malta from the UK ranged
1.75 to 5.50.
For the hotelier, this news actually represents a wonderful
What is VoIP?
In simplest terms, VoIP reduces the cost of international
by using the public Internet instead of dedicated telephone
The caller places the call on a special desktop telephone
connected to the Internet, through a computer with soft
software or through a VoIP-enabled PBX.
The voice call is converted into digital data and travels
across the Internet to a VoIP service provider. The service
provider converts the call back to analogue and inserts it
the traditional local telephone network nearest the called
The called party receives the call on their fixed or mobile
telephone just as any other local call.
By using the Internet to carry the call instead of dedicated,
proprietary, private telephone transmission facilities the
cost for international calls can be reduced to as little as
.01 or .02 per minute.
To receive a call, the caller would dial a local number
provided by the VoIP service provider.
Through the VoIP service provider, the call would be routed
back through the Internet to either your hotels PBX or
operator where it may be transferred to a guest room or member
Because VoIP relies on the Internet as the carrier call
quality can be variable dependent mostly on the VoIP service
provider and the speed and quality of the callers Internet
With most hotels now having high-quality, high-bandwidth
Internet connections a high quality of service can generally
Outbound VoIP Services
>From the guest or staff perspective, using VoIP service at
property could be as easy as making any other call. For
if you normally need to dial "8" to access an international
line, you could simply offer guests the option of dialing "7"
instead to try the VoIP service.
Guests can be invited to try the VoIP service and if they
arent satisfied they may use the traditional system.
(Promotion of the service with tent-cards in the room is very
The most striking feature of VoIP service is the low cost of
International calls calls to many international destinations
can be had for as little as .01 or slightly more per minute.
Some of these savings can be passed on to the guest while at
the same time increasing your own profit margin.
In a very conservative example, if you assume your 'cost' for
guest call over traditional service to be 1 per minute and
charge the guest 5 per minute (500% markup) if you put the
same call over VoIP you could charge the guest just .50 per
minute (10 times less) while at the same time earning a markup
of 5,000% (ten times more).
In addition to reducing your monthly telephone service bills
dramatically for guest calls, the same services may be used
all staff calls as well making international telemarketing
campaigns and international reservations support calls
practical and affordable.
Warning: Your current telephone service provider will not be
delighted with your decision to try VoIP unless they
offer it as an option.
Inbound VoIP Services
Most VoIP service providers also offer inbound telephone
numbers in major cities world-wide.
Calls placed to these numbers can be routed through VoIP and
the Internet directly to your hotel PBX or operator.
This option can dramatically increase your reservations by
giving potential customers a local number to call which is
easier for them than dialing an international call and takes
away the fear of placing an expensive international call.
As an extra benefit, guests can forward their home, office
and/or mobile phones to these local numbers and as long as
the caller knows the guest's name or room number, your PBX or
operator can forward through the call right to the guest's
room. For the caller it is completely transparent and
while for the guest pays highly discounted VoIP rates to
As an additional guest service, you may rent out mobile phones
and have inbound VoIP calls directed right to the guest
wherever they are, or may rent the guest a Wi-Fi mobile phone
allowing them to take the calls anywhere your Wi-Fi service
Free Telephone Service?
A new trend in hospitality is giving guests free limited or
unlimited international calls.
With traditional telephone service costs, this option wouldnt
be possible but with VoIP, it becomes both practical and
affordable. It gives you a new tool to attract guests and
differentiate your property from your competitors.
With many VoIP systems, you can offer guests automatic
and when they consume their allocation, they can go to
and buy additional credit. You may also offer special VoIP
packages for groups or conferences.
VoIP over Wi-Fi Wireless
If your property has a Wi-Fi wireless system for guests, you
may offer guests the option of renting the new breed of Wi-Fi
VoIP telephones. These look and work much like a normal mobile
phone anywhere in your property where the Wi-Fi service is
Hotels are beginning to use VoIP over wireless as an
alternative to traditional DECT telephone systems, pagers and
regular mobile phones for hotel staff.
Unlike traditional mobile phones, all calls within the
are absolutely free and international incoming and outgoing
calls are charged at VoIP prices.
Implementing VoIP Service
For the hotelier, there are many ways to implement VoIP
depending on which options you wish to implement and whether
the service will be used for guests and/or staff.
The simplest and least expensive way to start offering VoIP
service to guests is to use wireless VoIP handsets connected
directly with a VoIP service provider. Handsets range upwards
from 75 depending on manufacturer, model and features.
Through such a system, you would set up one account with the
VoIP service provider for each mobile device giving you
itemized individual billing available the moment the phone is
returned from rental.
If you have wired broadband connections to rooms and offices,
you may also purchase inexpensive desktop telephone sets that
connect directly to the network.
Desktop telephones look and work exactly like a normal desktop
telephone set ranging upwards of 50.
To implement VoIP service through your existing PBX is a
more complicated and may need some assistance from whoever
currently supports your PBX.
The options including installing a VoIP line card that
the protocol offered by your VoIP service provider (H.323,
IAX or IAX-2).
Another alternative is to use an external device that provides
appears and works like normal analogue telephone trunks to the
The last and most flexible option is to install an inexpensive
VoIP PBX in conjunction with your traditional PBX. This allows
you to offer guests a remarkable variety of new telephony
services for virtually no cost at all. Just a few examples
Automated wake-up call (with or without verification).
Voicemail with a tremendous variety of features including
the ability to have voicemail forwarded to an email address.
Call forwarding allowing the guest to have calls routed to
their mobile phones at VoIP rates.
Guests can also take advantage of outbound calling features
working in conjunction with their mobile phones. As an
the guest could be walking around the city, call the VoIP PBX
and receive a dial-tone from which they could call anywhere in
the world at VoIP rates. For them, it costs almost nothing
than making a regular local call while the hotel receives the
regular VoIP markup.
Always remember the additional revenue opportunities from
renting out the wireless VoIP handsets and mobile phones to
help guests take advantage of the new services.
Avoiding Pitfalls and Problems
In my experience, the most critical question is in the
selection of the VoIP service provider.
Depending which country you are in, and which countries your
guests are most likely to call you should select your VoIP
service provider based on the balance between cost and quality
of service for the most important called countries.
In some cases you may wish to use more than one service
provider such as if you need incoming numbers in specific
countries or cities, due to cost of servicing certain
countries, or due to the quality of service for specific
If you operate your own VoIP PBX, this is relatively easy. You
can set up dialing plans that select the most appropriate
provider automatically. If you do not operate your own VoIP
PBX, you may wish to work through an intermediary service
provider who does offer this service.
Ready to Try VoIP?
I hope that this article has provided you with enough
information to begin thinking about implementation of VoIP at
your property. While not a simple issue that can be covered
fully in these few pages, I do invite you to contact me for
further information at the address below. Best of luck in your
About The Author: Marty R. Milette is a hospitality industry
consultant and trainer in St. Petersburg Russia. Formerly of
the Grand Hotel Europe and Nevskij Palace hotels, is delivers
training throughout Europe: www.t-hotel.com.pt