Smart moves

Remember when a guest checking into a hotel was given a key? A good old-fashioned metal key, on a keyring with the room number written on it? Those, some would say, were the days.

The truth, of course, is that while this image endures and endears, in most large hotels the traditional room key gave way to the electronic lock a long time ago. Now the credit card-style key with a magnetic strip is in widespread use.

But imagine if that card did more than just open the door. Imagine if that one card, handed to the guest on check-in, could also be used to pay for meals in the restaurant, buy gifts in the shop, access the gym, accumulate store loyalty points, and even slot into the TV to enable access to the Internet or to pay for premium channels. Such devices are known as smartcards and they are likely to become more and more prominent in situations where electronic information is used.

To some extent, cards that perform some of these functions have been around in hotels for a number of years. However, the technology to allow one card to perform all these tasks is only just becoming available.

Simply, a smartcard looks like a normal credit card, only thicker. Embedded in it is a computer chip that can store information and, more importantly, can control how that information is used and who has access to it. And, unlike the magnetic strip on a credit or swipe card, the information on the chip can be changed, updated or deleted as often as necessary.

As this technology becomes more common, it can, and will, appear in thousands of different applications, as the potential uses in hotels demonstrate. The initial mass function, however, will be in credit cards. American Express, for example, is spending $45m (£30m) on marketing its new Blue card, and is hoping to get two million new accounts. The smart chip in the Blue card is principally there to help reduce levels of Internet fraud by storing PIN numbers or passwords, which a normal signature-only credit card cannot do (there was a 117% rise in Internet, phone and mail order credit card fraud in 1999, according to the Association for Payment Clearing Services).

Eventually, however, it seems likely that everyone will carry a smartcard that will hold not just our financial information, but also all our other personal information, from supermarket loyalty points to gym memberships, passport details to medical status. That's obviously worrying for anyone who is prone to losing things.

The widespread use of smartcards depends on an industry standard being developed that would allow all the different systems to read and write smartcards in the same way, but it's estimated that their use will increase by as much as 30% a year.

What does this mean for hotels?

Let's start with the most obvious application, the door lock. A smartcard lock can work exactly like the current swipe card method, but with additional applications. For example, the card could be programmed with the individual guest's room preferences, such as air-conditioning settings, lighting level, and so on. And, of course, when the guest leaves the room, it can turn appliances off to save power. Staff cards can be programmed in a similar way, allowing access to certain rooms or areas of the hotel only.

The other principal application of smartcards is as a cashless payment system for all of the hotel's retail outlets. Jarvis Hotels, for instance, uses EPnet by Quintus Systems to control the ordering of food and drink within its hotels and then charge orders directly to the guest's room bill. For example, guests at the Jarvis International in Watford can have a drink in the downstairs Arts Bar and charge it to their room, and as a security measure the guest's name will come up on the barman's till. The transaction then goes directly into the hotel's property management system. If the guest then goes to eat in the Arts Restaurant upstairs, the tab can be transferred there and food orders recorded in the same way. When the tab is closed, the room is charged and the guest gets a printed receipt.

These cards can also automatically allow staff discounts, differential pricing for different users and timed price-changes for "happy hour".

There are already some magnetic swipe card systems that can provide door-lock and cashless transaction systems, like those discussed above, albeit in a limited form. So what's the difference with a smartcard? Principally, with the magnetic strip card, the information is stored on the property management system and not on the card. With the smartcard system, there could be one card that performs all the necessary functions as it stores the information itself. The information thus becomes much more personal and more easily transferred - for instance, a guest could carry the same card between different hotels in the same group.

But isn't there a danger that these cashless systems could be abused by staff, or by thieves operating in the hotel?

"Unlike more basic cashless systems, with EPnet no cash is ever held on the card, which means a more secure environment," says Peter Quinney from Quintus Systems. "Since each transaction is recorded, a full audit trail is laid and, when aggregated, this data yields valuable information and management can base key strategic decisions on it. Jarvis Hotels, for example, has found that it is a perfect tool for checking stock."

A corporate smartcard could be used in all hotels in a chain. That way, a large company that mostly deals with one group of hotels could have its employees' expenses checked and charged directly.

This is already being done with some systems which also illustrate another application for smartcards - PC access. E@si Solutions is a Scandinavian company providing an in-room PC accessed by smartcard. This gives the guest Microsoft Office applications, as well as use of a printer and a fax, plus unlimited access to the Internet without additional phone charges.

Once the card is removed, no trace of them is left on the PC, so no snooping guests or staff can see what the previous occupant has been working on or, maybe more importantly for the businessman travelling alone, what Internet sites he has been looking at.

The E@si Solutions smartcard can be used in any hotel that uses the system, but it has uses other than PC access. Recently, the card has been adapted to store the frequent visitor loyalty points of the hotels that use its systems. Choice Hotels Scandinavia is one such group, and it has realised that the loyalty scheme is just the start of tapping into the potential uses a common smartcard can have.

"It's important that we constantly develop our benefit programme to meet the market's requirements for our regular guests," says Elen Stebekk, marketing manager for Choice Hotels Scandinavia. "By introducing smartcard technology in the loyalty card, we open up all sorts of possibilities for offering integration with other services like door keys, payment cards and, for our major corporate customers, we can provide access to their own intranet. This means greater flexibility and convenience for our customers."

The benefits of smartcard use are definitely there, so what's stopping hotels from rushing out to install the equipment? The answer is unsurprising - cost.

Smartcards are considerably more expensive than normal magnetic strip cards. If a normal hotel goes through, say, five to 10 cards a month through breakages or non-returns, then the difference between the cost of a few pence for a normal card and a few pounds for a smartcard can add up very quickly. Of course, only one card would be needed for every guest, rather than several magnetic strip cards which may fit the different existing systems.

However, smartcard use also means the installation of new equipment that will read and write to these cards, possibly at every till, reception desk, restaurant, etc - which is not a cheap option. But as these cards become more prevalent in society outside hotels, then guests will start coming into hotels looking for this technology.

A more tangible advantage is the lucrative potential for tie-ins with airlines, car rental companies and travel agents, as is the possibility of guaranteeing large corporate contracts and the greater uptake of loyalty schemes.

Yet again, here is another chance for the hospitality industry to set the agenda for new technologies rather than follow the lead of other sectors. It just depends whether the industry has learnt its lesson from its slow uptake of the Internet and is willing to take the chance.

This is a credit card-style plastic card which has a computer chip embedded in it. This chip can store much more information than a conventional magnetic strip and the information can be changed at will.

www.easico.com

www.quintus.co.uk

www.americanexpress.com/blue

www.scia.be