C10 1-Case Study 10-Choice Hotels International Within The H

C10 1case Study 10choice Hotels Internationalwithin The Hospitality In

Within the hospitality industry, there has traditionally been a division between networks that serve guest functions and those that serve operations and administration, both with respect to data transmission and voice transmission. In recent years, most hotel and motel chains have moved in the direction of consolidating multiple functions on networks that used to be dedicated to one use. Tighter integration of voice and data and of guest and operations/administration networking is a fast-growing trend. Choice Hotels International (NYSE: CHH) exemplifies this trend, being one of the largest and most successful lodging companies worldwide.

Choice Hotels franchises over 6,100 hotels with more than 490,000 rooms across the United States and over 30 countries. Its well-known brands include Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge, and Rodeway Inn. The company’s operational model relies heavily on supporting its independent franchisees through robust networking functions.

Choice Hotels supports two main networking functions: a central website enabling customers to reserve rooms at any franchise and a franchise support network providing services such as online supply orders and booking status checks. These functions rely on a high-reliability network infrastructure, considering the approximately 2,000 hotel managers—who are effectively its customers—demand high service levels. To facilitate reservations, Choice implemented an IP network connecting each hotel to its central reservation system, named Profit Manager.

Initially, reservation synchronization was manual, leading to inefficiencies such as overbookings and underutilization due to fixed inventory blocks assigned to the central system. As the company evolved, it transitioned from a telephone-based reservation system to a web-based platform, recognizing that web services could offer travelers instant access to available rooms, with real-time updating and last-minute promotions.

To achieve this, Choice Hotels decided on a franchise-wide IP network using satellite technology to ensure extensive coverage and high reliability—especially critical internationally. The satellite network, provided by Hughes Network Systems, used geostationary satellites with dedicated hubs located in Los Angeles and Germantown. Hotels were equipped with VSAT dishes connecting to the satellite system, ensuring consistent connectivity for reservation data, guest internet access, and administrative functions.

Provisions for guest Internet access employed wireless and wired solutions, initially using equipment from 3Com. The wireless Wi-Fi network supported high speeds up to 54 Mbps with built-in security, allowing guests to check emails and browse freely, enhancing their stay experience without substantial hotel infrastructure modifications.

In 2011, Choice Hotels expanded its in-room entertainment offerings by partnering with Bulk TV & Internet for free in-room satellite television and internet services, leveraging satellite technology’s ability to support HD programming and high-speed internet. Bulk TV's use of enterprise-grade solutions, including fiber and Ethernet, supported both quality delivery and remote monitoring, minimizing downtime and service disruptions.

Discussion Points

1. Latency Concerns in Satellite Systems: The primary challenge of satellite communication is latency, which can impact real-time applications such as VoIP, video conferencing, or online reservations. For Choice’s reservation and administrative systems, latency could introduce delays in transaction processing, potentially slowing down booking updates or account reconciliations, thus affecting service responsiveness and customer satisfaction.

2. Global Network Expansion Challenges: As Choice Hotels plans to expand globally, it will face obstacles such as diverse regulatory environments, varying network infrastructure quality, and logistical complexities. Satellite technology provides broad coverage, but international expansion may require integrating terrestrial networks, managing differing latency levels, and ensuring security compliance across jurisdictions.

3. Preference for Terrestrial Circuits in Internet Support: Despite satellite benefits, providers prefer terrestrial circuits such as fiber-optic or T1 connections primarily due to lower latency, higher bandwidth, and greater reliability. Terrestrial circuits generally offer more consistent speeds and less latency, making them better suited for bandwidth-intensive and real-time applications, such as internet access and internal data transmission.

In sum, Choice Hotels’ strategic move towards integrated satellite networks and web-based reservation systems exemplifies the industry's shift toward seamless, reliable, and high-performance networking solutions. The adoption of satellite technology has been pivotal in overcoming geographical and infrastructural barriers, especially for international operations. However, addressing challenges like latency and integrating terrestrial solutions remains crucial as the company scales globally, requiring evolving technological strategies and investments.

References

• Harler, C. (2002). Bring it On! Hospitality Technology Magazine, January/February.
• Dornan, A. (2001). Hotel Chain Reserves Room on Space Network. Network Magazine, January.
• PRNewswire.com. (2011). Bulk TV Awarded Qualified Vendor Status with Choice Hotels International. Retrieved from https://www.prnewswire.com
• Uhland, V. (2001). The Turbo-Charged Enterprise. Satellite Broadband, November.
• 3COM Corp. (2004). Choice Hotels International Teams Up with 3COM to Offer Free Wireless Internet Access at Clarion Hotels and Comfort Suites. Press Release.
• 3COM Corp. (2006). Case Study: Choice Hotels International, Inc.
• Harlers, C. (2002). Bring it On! Hospitality Technology Magazine.
• Uhla, V. (2000). The Turbo-Charged Enterprise. Satellite Broadband.
• Harlers, C. (2002). Bring it On! Hospitality Technology Magazine.
• PRNewswire.com. (2011). Bulk TV Awarded Qualified Vendor Status with Choice Hotels International. Retrieved from https://www.prnewswire.com