Articles
Cash machines satisfy need for service, convenience
11/15/2000
Well-positioned ATMs can work for the hotel and the guest.
By Judy Colbert
When the Monarch Hotel opened its doors two years ago in Washington, DC, the owners had invested $20 million in upgrades to the property, the former ANA Westin. Among improvements to services and amenities was the installation of a guest-requested ATM.
The Monarch's decision to install an ATM is indicative of a steadily growing trend in this country's 52,000 lodging establishments. According to a 1999 Dove Associates study, 36% of hotels had ATMs.
David Gosnell, senior editor of ATM & Debit News, says most of those properties belong to chain-affiliated hotels, not independent properties. He says casino hotels, for obvious reasons, are likely to have multiple ATMs on premises.
Rob Evans, marketing director for NCR, says there are other sections of the hotel market where ATMs have a strong presence, and he estimates that more than half of the business-oriented hotels, including Marriott, Wyndham, and Hilton, have ATMs in their properties.
Why an ATM?
Although the Monarch charges $2.50 a transaction (in addition to whatever fee the customer's bank may impose), management views the machine as a service to their guests rather than a significant source of revenue. Gosnell says hotel ATMs generally "charge significantly more than convenience stores and other locations, where the most common fee is about $1.50 a transaction. That's what the market will bear because these are travelers who are a captive audience and who don't want to search around for a machine that costs a little less."
In addition to providing a possible revenue source and an opportunity to promote a hotel service (either on the screen or printed on the receipt), an ATM reduces bad debt costs and credit card fees and increases sales. A hotel guest with cash in hand will spend money at the hotel's gift shop, bar or restaurant.
Bill Jackson, chief technical officer for Triton, says as the hospitality industry has warmed to ATM installation, they've been "moving away from bank ATMs. Traditionally, they were large, expensive units, which proved to be cost-prohibitive in off-premises locations.” Hospitality locations are now turning to Independent Sales Organizations (ISO) for access to nationwide networks and full service, as well as smaller, lower-cost ATMs.
An ISO can offer complete turnkey service: access to a nationwide ATM network, a variety of communication options (leased-line, dial-up, satellite, cellular, TCP/IP) and full service and maintenance contracts. Through one ISO, a hotel chain can contract to service all of its locations across the country, whether there are 15 or 100. Revenue share is higher if the hotel owns and services the ATMs; lower if the hotel leases ATMs and contracts with an ISO to stock and service them. Repair service can be handled through ISOs as well.
In addition, instead of a hotel paying a bank for an ATM, Brad Fletcher, president of MoneyTree ATM, says MoneyTree pays the hotel to be in the property and the hotel gets a percentage of the service fee. MoneyTree is more interested in hotels with 140 beds or above, but smaller properties can get into the action, too, by purchasing a machine affordably.
Location, location, location
ATM placement is critical to customer satisfaction, says Robert Nemens, senior marketing manager of Diebold. It should be in a well-trafficked, well-lit area, with plenty of space to prevent "pin surfing" crooks who could watch a user key in a PIN and then steal that card. Noting that security is a critical concern for the hotel, too, Diebold has a cash recycling module that allows a hotel employee to replenish the machine from the front desk cash drawer, thus eliminating two factors: the hotel's need to deposit cash at a bank (and forcing an employee to leave the property), and relying solely on an outside source to replenish the ATM. The employee opens the beauty (front) door of the ATM and inserts a bill, which prompts the user for a password and employee number. Then, the employee feeds the bills into the system and it gives up to five receipts (for cash drawer, auditor, etc.). The secure chest is never opened. The system is ideal for a property that does between 500 and 600 transactions a month.
Evans says the location "needs to be available at all times. You'd be amazed at the number of properties I've seen with an ATM in a gift shop that's closed for the night."
"With the opportunity for a lot of people to have their hand in the till," Fletcher says it's better for a third-party provider, such as MoneyTree, to handle replenishing the cassettes. Generally, MoneyTree offers service on an 18/7 basis, because there isn’t much demand between 10 PM and 7 AM. Fletcher says one mistake a hotel can make is going with an individual provider because often smaller operators don't stock parts, are not online for processing customer service and are at the mercy of the manufacturer for parts and service. Hotels that opt for an independent contractor, says Fletcher, are setting themselves up for failure.
Beyond dispensing money
ATMs can dispense more than cash, including stamps and post cards, but many don’t because they have to be stocked and inventoried. Eventually, Nemens predicts, hotel ATMs will dispense tickets, an option already available in some Las Vegas hotels.
Other services or "multimedia" options available via an ATM kiosk are room keys for frequent or preregistered guests, reservations for other hotels in your chain, discount coupons (to hotel services or nearby attractions), foreign currencies (good for hotels with high foreign visitor counts), gift certificates, telephone cards, travelers checks, airline tickets, check cashing, e-mail, stock reports, directions and maps, weather and news headlines.
The downside of other options is the amount of time a customer uses one, possibly keeping other customers from using the machine. A separate kiosk for these services could be a viable option. On the upside, says Nemens, "Anything they (the hotel) can put on an ATM and automate takes away the function of a live person and that's a cost savings." Bill Dunn, director of sales for Cross international Technologies, says phone cards are a sleeper for ATMs, with the real money in prepaid cell phone cards because "people have a local phone calling program and when they travel they're hit with huge charges for out-of-state calls. With prepaid cell phone cards, they can enjoy 90% savings," Not great news for hotels looking to subsidize their phone system, but it may be a way to recoup otherwise-lost income.