Hyatt Turns To Telstra To Modernize Its NetworkHyatt Turns To Telstra To Modernize Its Network

For Hyatt International Corp., the decision to outsource the upgrade and operation of its network came down to an essential business problem: It couldn't roll out new applications or prioritize its bandwidth to protect its critical central-reservations system. That system's performance had to be improved, so in an $8.4 million, three-year deal detailed this week, Hyatt International brought in Telstra Corp. Ltd. to modernize and watch over its network, which had relied on antiquated frame-relay technology.

It's been two months since the company completed its move to an IP-based multiprotocol label switching network, and the benefits are clear, says Gebhard Rainer, VP of hotel finance and technology for Hyatt International, the Hyatt Hotel Corp. unit that operates the chain's 90 hotels outside North America. It's rolling out new applications--such as new Hyperion Solutions tools for budgeting and forecasting, and several marketing databases that leverage customer information using Cognos' business-intelligence technology--and is able to guarantee better application performance, particularly in its central-reservations system. It's also allowing information to move more fluidly throughout the company, whereas the old network's bandwidth limitations forced hotels to store much of their information in local databases.

Other benefits include quicker reservation confirmations, better access to customer profiles during the booking process, and more rapid response to service issues.

The decision to outsource management of its network allowed Hyatt International to refrain from hiring the kind of network expertise needed to ensure the technology continued to operate smoothly. "We aren't in the communications business," Rainer says. "We said, 'let's come back and focus on our core business.'"

Dan Kerth, president of Telstra Inc., the U.S. subsidiary of the Australian telecommunications company, says network outsourcing is becoming an increasingly popular option for travel companies because of the dispersed nature of their facilities. Adding a property onto a hotel's network, or an airport into an airline's infrastructure, is a labor-intensive undertaking that takes hotels and airlines away from their core operations.