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Monday, December 2, 2013
Charging for Internet at Hotels is so Yesterday!

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Over my career I have spent a considerable amount of time in hotel rooms. I am currently writing this from the Hotel Principe di Savoia in Milan looking at their hotel website and wondering why I am facing a 27 Euro per day charge for Internet services in my hotel room. Like you, I have been surprised how inconsistent the hotel world is about providing access to the Internet for their customers. Generally around the world it could be free in the hotel lounge or for around $15-$20 per day, it could be made available in the comfort of your hotel room. But when hotels charge hundreds of dollars per night as it is, couldn’t they at least throw in the basics of connectivity? They provide basic television but charge to see newly released movies. That is fair. But isn’t it ironic that the most expensive hotels like the Intercontinental will charge you $20 per day but the least expensive hotels such as the Hilton Garden Inns will offer it for free? It’s a minefield of variances out there; some offer it for free in the main lounge, while others offer it free everywhere, either as WiFi or as a dedicated line in the room. Some, as in Tallinn, Estonia, even provide free hi-grade Skype in the room, complete with a Skype device. But others charge for a service that might cost the hotelier less than $1 per day and could otherwise help them to market their brands better, offer a relatively inexpensive part of the hotel infrastructure as part of the basic hotel charge, or simply motivate them to get into the new world and stop gouging for it. 

When cities have found a way to provide free WiFi to its visitors and citizens, why do hotels still charge their customers for Internet? It’s simple actually; in a world of declining occupancy, hotels believe they need to charge for everything they could beyond their base room rental as an added source of revenue. Sound familiar? Airlines now charge for baggage in a lucrative move that added millions to their bottom line (but are hated for this by their customers and will rue the day when it comes back to bite them), so why not charge for Internet access in hotels? Telephone revenues for hotels have virtually disappeared with the advent of cell phones. Perhaps hotels might try charging for bags next or you could offer to swap the expensive toiletries for free Internet access (only kidding Mr. Hotelier!).

For Road Warriors who might average 50 hotel nights a year, the Internet charges could wind up ending up to be between $500 and $1000 per year. This extra charge can be offset with personal Internet devices, such as Rocket sticks or by other ways to work around it. Sprint, for instance, offers a small credit card sized MiFi mobile Internet device that allows multiple users to access the Internet. It is also possible to ask for rooms on lower floors closer to the lounge where free access is assured. Or join the hotel chain’s loyalty card which in most cases provides regular users with free access as a loyalty card feature. Another option is to purchase a relatively inexpensive data plan before leaving your home country. And many hotels offer Internet for free in exchange for embedding ads and cookies, which provide income to the hotels. 

While most Internet access is useful for checking emails, many travelers are bringing their entire home and office platforms with them and require more substantial broadband access for data transfers, social networking and watching videos, such as over Netflix. As business travelers need to access home and business environments, hotels feel that they can charge for this necessity, but are damaging their reputations and bottom lines, aiming for the short term gain instead of the long-term loyalty through goodwill. But some hotel chains are getting it. For instance, Hong Kong-based Shangri-La has decided to eliminate charges for Internet access altogether at all of its hotels, setting the bar for other luxury hotels to do the same. And it appears that customers are being heard. Hotel Chatter offers an interesting new 2013 Infographic that will quickly size up the competition when it comes to free or inexpensive Internet in hotels. According to this report, 64% of hotels now provide free basic services. That is a huge improvement over previous years. Hotels are realizing that it helps their brand; helps in keeping the customer closer to the hotel and more likely to use the bar and restaurant; as well as more likely to promote the hotel or chain to their friends and colleagues as a result.

clientuploads/Images/WifiPay.jpgBut why charge for this at all? The cost to set up and maintain Internet access is surely not as expensive as setting up the hot water system or the hotel air conditioning system. These aren’t currently being charged extra for. Mr. Hotelier, if the expense to set up the system and maintain routers is the excuse, then don’t offer it at all, because that is a lame excuse for the expense. In today’s world, whether you are a hotel or a city contemplating the provision of Internet access for your customers or citizens, wireless Internet access is a basic utility like water and sewers, and roads and sidewalks. The Mayor of Fredericton, New Brunswick, Canada is proud to announce that he would not charge his citizens to walk on his sidewalks and so they shouldn’t be charged for access to basic Internet services. Besides, so many municipal services and utilities are now being accessed by WiFi, that it would be relatively easy and inexpensive for cities, just as hotels are now learning, to offer basic Internet free of charge. Yes, if you want to watch your latest Netflix on your laptop and not pay the hotel for the latest movie on their TV set, you should perhaps be charged for the upgraded premium service. But not be charged for the basic level of Internet services. Here at the Hotel Principe di Savoia, one of the most luxurious hotels in Milan, I am offered just that - I did not mind using the basic Internet service at 256 kbps to check on my emails for free. If I needed more at 20 mbps, I could purchase it for 27 Euros for 24 hours. Or I could simply go to the nearest Starbucks, which have mastered the art of the use of the Internet to attract and sustain their business. In fact, Starbucks recently announced free unlimited Wi-Fi service and electricity to customers at all “company-owned stores" in the United States. The loyalty of customers paying $5 for coffee and $4 for a biscuit more than offsets their costs for Internet and electricity for their laptops.

Applications in hotels which offer entertainment have usually contributed to the bottom line of these hotels. However, since many hotel guests are beginning to revel entirely in their own mobile applications, they completely ignore any and all hotel offerings. This may change with new applications and business models on the horizon that may change the way we currently experience our hotel stays. In this case change is inevitable and may be good, unless you are not a road warrior with all of the technical devices and applications.

In anticipation of this, some hotels are now offering new devices and services in their rooms. I recently was in a hotel room with an ultra-high speed broadband based Smart TV which allowed me to use everything from broadcast television to the Web, with video-on-demand  while I could do my emails at the same time on the same device ( and more), without the need for me to bring my briefcase. A Dutch chain called CitizenM provides Samsung tablets in each guest room, free video-on-demand TV as well as providing a music library. It also controls the alarm clock, temperature control, blinds and lighting. Even the legendary Peninsula Hotel has installed customizable tablets in the language of your choice directly connected to the concierge and all other services in the hotel as well as to an entertainment system comprising a Blu-ray, LED television flat-screen, with extensive music, VOIP, HD and current 3-D movies, all requiring ultra-high speed broadband, which guests may be more likely to pay to experience. 

As cities and industries transform, so will hotels. The trend is towards free basic services with optional high speed broadband charges for all the new devices and applications. Like you, I am looking for the day that hotels don’t charge for these basic services so that at least we can check our email. However in the future, emails will likely no longer be the way we communicate and I bet that next generation communications through social media and other evolving communications apps will require access to ultra-high speed broadband. At that point we may see the debate grow once again but this time for access to ultra-high speed broadband as a way to communicate.

 
Tuesday, November 26, 2013
What Kind of Future Do You Believe In?

In 2004, I visited Taiwan as the guest of Ma Ying-jeou, then Mayor of Taipei and now President.  At a trade fair there, I was shown a new kind of laptop – one with a touch-sensitive screen and stylus, but no keyboard.  The size of a briefcase, it weighed about 6 pounds.  After trying it out, I told them that “If you can get this down to the size and weight of a magazine, you will have the killer product of all time.”

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Well, Steve Jobs at Apple got there first with the iPad.  Or did he?  In 2013, Apple revealed that, of the 17 factories where its products are assembled and packaged, all but one is owned by a Taiwanese company.  That’s no accident.  In 1973, the national government created the Industrial Technology Research Institute (ITRI) to nurture the high-tech industry, using patents licensed from US companies.  The Economist called it “a rare example of successful industrial policy.”  

clientuploads/Images/Taichung-City-Hall-300.gifForty years later, one of the beneficiaries is Taichung, the 2013 Intelligent Community of the Year.  But Taichung is not just on the receiving end of smart policy; it has been an energetic participant that built high-quality schools and industrial parks making just about every kind of technology we have a use for – then getting them to work together for the benefit of Taichung.

Its universities and technical schools have launched hundreds of research institutes and more than a dozen incubation centers.  A Taichung Incubators Business Alliance nurtures the growth of more than 400 companies that are successful graduates.    

In the past 10 years, just one of its industrial zones, the Central Taiwan Science Park, has attracted companies with combined revenues exceeding US$8.1 billion from solar energy technology, touch-panel displays, optoelectronics, precision chemicals, semiconductors, aerospace and ICT.  

One of them is Taiwan Semiconductor Manufacturing Company, a chip foundry that was spun out of ITRI in 1987.  With global revenues of US$17.3 billion in 2012, it one of the world’s leading silicon chip makers.  The company has made massive investments in foundries in Taichung, including a US$10 billion factory in the Central Taiwan Science Park, which employs 8,000 workers.     

But the story is not all about tech giants.   A city-led initiative created a shared-use ERP platform called the Engineering Data Bank.  More than 400 of the city’s small precision manufacturers use it to enhance their engineering and operations.  The reduction in rework, errors and delays is now saving these smaller companies a combined total of US$29 million per year.  

Serving all these industries, Taichung Harbor has massive container truck traffic in and out of the port, which requires secure handling and verification.  Until 2011, that meant unloading and physically checking cargo, creating a bottleneck that hurt the port’s competitiveness.  In 2011, Taichung Harbor launched an automatic gate checkpoint system that electronically reads and matches the truck drivers’ identification, license plate numbers and container numbers using RFID technology.  The entire process takes 2-3 minutes and has proven almost 99% accurate.  The savings in time and money for users are enormous.

What do all of these different activities have in common?  They are what people do when they believe in a better future.  They combine the resources of business, government and institutions to place big bets that tomorrow will be better than today.    

In the 21st Century, the infrastructure of most rich nations is slowly eroding for lack of appetite to place those bets.  In 2009, the American Society of Civil Engineers (ASCE) estimated that the nation needed to spend at least $2.2 trillion over the next five years to repair its infrastructure.   So, five years later, how was the nation doing?  The 2013 ASCE report card foresaw the need to spend $3.6 trillion by 2020 – $1.6 trillion more than was currently budgeted.     

Even Germany, that exemplar of efficiency, has skimped on maintenance.  A government-appointed commission concluded in 2013 that the country needs to spend $9.2 billion every year for the next 15 years to get existing infrastructure back into shape.    

When we believe that the future holds more potential for gain than loss, we invest in our future and that of our children.  When we believe the opposite, we invest only in today’s rewards.  There is a question that those of us in the rich world should be asking ourselves – a question I do not, unfortunately, hear in public debates but one with profound implications for ourselves, our communities and our nations.  The question is: what kind of future do we truly believe in?

 
Wednesday, November 20, 2013
Via Dandolo #10

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clientuploads/Images/300px-Vincent_Ferrer_RCC_jeh.jpgAt night and for years homeless men have taken sanctuary and shelter along the perimeter of the Church of St. Vincent Ferrer and its Priory on the Upper East Side of Manhattan.  The young Dominican friars who run the parish were able to manage the situation so long as the numbers remained reasonable and morning debris was minimal.  No doubt to the puzzlement of tourists who daily visit the historic site, and neighbors who live in its shadow, the pastor had always pointed out that sheltering this group was part of the “ancient practice of sanctuary and should be honored.”  However as 2013 rolled forward and the recession continued its ceaseless persecution of the long-term unemployed, numbers swelled and troubles began.  The outside electrical and water outlets of the church were persistently tapped by a new group of men (the women have a shelter nearby); the rambling garden inside the courtyard, tended to by the community and students of the high school, was trampled and, because this is New York, the potential for liability screamed like a siren.  With profound reluctance, the parish put up “No Trespassing” signs and gave its brethren on the street gentle notice.  To date these guys – several of whom I know, since this is my parish - have heeded the signs.  This is a truce that will last.  Several of them attend regular church services and, yes, put money in the collection basket every Sunday.  They feel part of the community and understand.  

As a member of the church’s Parish Council, I was conflicted by the decision and became intrigued by possible community-based solutions.  While none are perfect, including a technology solution tied to “digital inclusion,” a best practice half-way around the world recently caught my attention.  It reinforces the notion of how innovations, even tiny ones, are transformative and can even lead to bigger and more profound outcomes.  

Today in Rome, the community of Sant’Egidio, formed in 1968 after a universal call to serve the poor in the community, consists of over 60,000 volunteers in 73 nations committed to developing communities of inclusion based on one simple concept: that no one is a “foreigner.”  Similar to ICF’s mission, it also insists that “home” is where the action is and where solutions to global problems arise.  

Sant’Egidio is expansive.  It offers programs from “schools of peace” to integrative AIDS programs to petitions for the freedom of political prisoners.  Its facility in the Trastevere area of Rome, which provides pasta meals to the homeless that are worthy of a four-star restaurant anywhere else, proved ICF’s beliefs about “the restoration of place,” and is a persistent example by the global media of what true peace, and the trust it generates, can achieve.  

The facility in Rome is not only a place to get a meal and shelter, but literally a home for the homeless.  Not a shelter, mind you.  I said “a home.”  The staff at Via Dandolo #10 have somehow created a sense of belonging and offer what one resident from Somalia called a “unique friendliness.”  It is genuine and it is believed.  The innovation, if it can be called that, is simple.  Working with the approval of the government, it allows every homeless person to list #10 Via Dandolo as their official residence.  Their civic identification cards tell the world and authorities that they indeed have a place they can call “home.” And it is a fine place.  

As a result of its commitment to community as a path to peace something much greater emerged.  That happened in 1992 in Mozambique, where the Sant’Egidio movement had already established a presence that was respected by all parties.  As a result, the nation’s brutal 15-year war was brought to a truce, and then to a peace with Sant’Egidio representatives at the table moderating the General Agreement.  The group is credited with being the glue that has held that peace for 20 years.  Despite rising tensions today, the glue still grips.  It is jarring to think that a small group from a neighborhood in Rome could ultimately grow to have that kind of influence by employing a few simple, intelligent principles.  However, to ultimately become an Intelligent Community, a sense of trust, peace and commitment to home come before all else.  It is food for thought.

clientuploads/Images/LAZ Gordon Brown (2) Dec 11 12.jpgAs the Intelligent Community Forum comes up on the first anniversary of its participation last year at the Nobel Peace Prize in Oslo, where I was invited to speak at a forum that included former British Prime Minister Gordon Brown (who is also committed to developing a more peaceful Africa, in his case through petitioning for an increase in Internet access, education for women and economic justice), it is good to remember that the reason ICF was invited to Norway was to help answer the question of whether healthy, integrated, digitally inclusive communities could be a catalyst for more free and open societies.  That the discussion that we have been having since 1995 had risen to this level signifies that the volunteers from the inspired community of Sant’Egidio in 1968, the homeless men of St. Vincent’s in New York in 2013 and the 21 communities in our 2014 awards program all share a common belief: that home is where the ever-elusive path to lasting peace begins.  In this place, none of us are “foreigners.”

Follow @LouICF on Twitter

 
Monday, November 11, 2013
China’s Evolution to Create Intelligent Communities

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I have yet to bring out my abacus, but if I was a betting man, I would say that there are probably at least 1000 or more smart cities and Intelligent Communities either in existence, under construction or being planned around the world today.  

I can tell you that in China alone there are 193 smart cities that have already been listed, but perhaps as many as 800 smart city projects may be on the drawing boards in China, expected to cost $300 billion to execute. In India there are at least 2 smart cities per state being designed or in development (that is 56 to you and me) and probably more. ICF currently lists 126 Intelligent Communities to-date and we have hundreds of communities who annually attempt to get onto the Smart21 list. I read about one newly named community per week in real estate journals and global newspapers that I have never heard about before that promotes itself as a unique smart park or smart city. Many of these start off simply as a real estate play; morph into a community-wide application and sooner or later emerge as a smart city infrastructure program. As it matures, the chance that it begins to follow ICF’s criteria becomes more realistic every-day until we perhaps see it emerge as a Smart21 community and then evolve to become recognized as an Intelligent Community. 

clientuploads/Images/jjchina1.JPGRecently I visited China and was surprised to learn of the depth and extent of the activities around what my hosts refer to as their “smart city developments”. According to Quan, Zang, General Manager of the Application Development Consulting Business Unit from Pactera Technology International Ltd., a global consulting and technology services firm headquartered in Beijing, “2013 has seen a boom of smart city pilots in China with support from the State and the Ministry of Housing and Urban-Rural Development.” Their smart city programs in China are strategically attached to their new urbanization agenda. Says Mr. Quan, “We define smart cities as utilizing an integrated urban development and management model based on information technology and orchestrated application systems. Our smart cities programs cover aspects such as living, green architecture, community, health, education, security, transportation and environment. By sharing data and information resources, the movement will help create a new management eco-system”.

The Ministry of Housing and Urban-Rural Development released a list of 90 smart city pilots in January 2013, followed by a list of 103 cities, districts, towns and industrial zones in August to be developed as smart cities. To view the complete list of 193 communities in China, click here.

Mr. Quan and his team are keen to move forward with these smart city pilots, indicating that they are currently working hard on one such project in Chongqing. He said that developing smart cities is a necessary road to follow, aligning it to China’s new urbanization efforts. According to Mr. Quan, among the smart city development aspects, smart industry is the most critical factor to improve the local economic development (GDP) and improve the quality of life and people’s satisfaction.

Says Mr. Quan, “Pactera is looking forward to co-operate with domestic and international Smart City hardware vendors and software solution providers to realize China’s smart city plans. We will work together to build up China’s homegrown smart city solutions and share them with the Smart City market with our partners all over the world.” 

Chinese municipalities, developers and the Ministry of Housing and Urban-Rural Development are also keen to better understand the evolution of these smart city projects into Intelligent Communities, recognizing that they must go beyond the basic fundamentals of infrastructure to include knowledge workforce strategies and the creation, attraction and retention of talent in these communities; the application of strategies to build an innovation ecosystem; initiatives to ensure that all members of society are given equal access to affordable digital opportunities; among other strategies that promote sustainability, marketing, advocacy and collaboration. China is leading with massive initiatives to move the smart city and Intelligent Community movement forward, however its clear that the world over is now on the move to create Intelligent Communities, especially as towns, cities and regions are being revitalized and reinvented.

 

 
Monday, November 4, 2013
The Time for a Revolution is When Things Are Going Great

How do you get a community to change its ways when those ways are working so well?

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The community in question is Walla Walla in the US state of Washington, which is located in the northwest corner of the 48 contiguous states.  On October 21, ICF named Walla Walla to its Smart21 and, last week, I was there conducting an ICF Master Class for a group of government, education, business and institutional leaders to help them advance the broadband revolution in W2, as the city is affectionately known.  My host was David Woolson, president of the Walla Walla Valley Chamber of Commerce, pictured below.  

clientuploads/Images/WallaWallaVineyard.jpgWalla Walla means “many waters” in the language of the Native Americans who first settled in this meeting place of rivers.  Natural abundance created agricultural prosperity and a strategic location made Walla Walla a 19th Century shipping hub – until it was bypassed by the trans-continental railroad and its prominence was gradually eclipsed by the coastal city of Seattle.  Today, however, Walla Walla still grows wheat that is sought after in Asia, produces fruit sold across the US, and has seen explosive growth in wine-making, from a handful of vineyards to 160 registered locations today.  Tourists and retirees seeking fine wines and natural beauty have given birth to a thriving culinary and arts scene, providing residents and businesses with an outstanding quality of life.  

Sounds pretty nice – so why change?  The city is home to a university and community college, but it provides too few jobs worthy of the talents of their graduates.  Agriculture does not employ many people and tourism does not create a stable year-round economy.  As a result, the population has not grown for decades.  And if you are not growing in the economy of the 21st Century, you are gradually losing ground.  W2 needs to change for the sake of citizens being born today and citizens yet to come.  

clientuploads/Images/WallaWallaDavidWoolson.jpgThe Chamber of Commerce is leading an effort to leverage Walla Walla’s existing strengths to create broadband-powered growth.  In 2012, thanks to a broadband stimulus grant, the nonprofit Northwest Open Access Network (NoaNet) completed expansion of its fiber backbone into the Walla Walla Valley.  The city is now working with carriers, institutions and businesses on ways to roll out local connectivity to fill gaps and deliver significant bandwidth where needed.  

The Chamber established a film office that has already attracted TV and film shoots  and is working to attract a full-time production unit for TV, film or Web content as the anchor of a digital media and gaming cluster.  Based on the success of winemaking, it is driving the creation of a Plough2Plate program to help small local food producers with marketing, branding and distribution.   And it has begun to integrate the Hispanic business community – in a city where 25% of the population is now Latin American – into the mainstream to boost the growth of both Latino and Anglo businesses.

Still, absent a crisis, it is hard to get a community to change.  Judging by the Master Class, though, W2 has one big advantage.  I have rarely met people more willing to engage, to seize on new ideas and challenge old ones.  Champions like these can be powerful agents for changing things even when things seem to be going so well.

 
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