Tuesday, August 3, 1999

By Dennis Oda, Star-Bulletin
Pauline Barney, general manager of the Inn at Schofield Barracks,
shows the room key card that doubles as the hotel's charge card.
Barney, who with a computer programmer developed the CoVendor
software in 1995, is standing in the hotel's convenience store where
guests can use the card by swiping it through the machine below.

Hawaii hotel’s
cashless card may
bring designer
global value

Inn at Schofield Barracks'
general manager has seen
Laundromat revenues gain
50% since using the system

By Heather Tang


THREE years ago, the Laundromat at the Inn at Schofield Barracks was costing the hotel about $10,000 a year. Unreported broken machines and the inability to track usage made accounting inconsistent.

Pauline Barney, general manager of the 192-room inn, decided to take matters into her own hands.

The result was the CoVendor card, a one-card electronic charge transfer system that guests can use on laundry and soda machines and in the Inn's retail stores and restaurants.

Now Barney and her partners are selling the card system to other hotels, recreational parks, schools, and even correctional facilities.

Unlike a smart card or debit card, the CoVendor card has no monetary value; instead, purchases are posted to hotel guests' billing folio automatically.

"I was frustrated by guests' inconvenience and the lack of reports that management gets," said Barney, who heads the Honolulu-based Windrose Group, a consulting firm and CoVendor distributor. "I knew there was revenue out there that I wasn't getting."

By Dennis Oda, Star-Bulletin

Barney, along with Tarang Deshpande, a San Jose, Calif.-based computer programmer, developed the CoVendor software in 1995. For a year, Deshpande commuted between the two states, working full time at Centigram Communications Corp., a software development company and commuting to Hawaii on the weekends.

The two worked long hours perfecting and testing the system for Inn guests.

"We'd spend every waking moment working on the system. When we got discouraged, the guests encouraged us by telling us how much they were excited about the possibilities," said Barney, who remains the Inn's general manager.

She says she believes their system could be part of a future cashless society.

The system was first installed at the Inn at Schofield Barracks in 1996 for about $20,000. Revenue generated from the system paid off the investment in under six months, said Pete Jensen, president of the Inn's management company, Minefen Co. Within the first six months of installation, Laundromat revenue increased 50 percent, he said.

Guests are now issued room-key cards that double as charge cards. To make purchases, cards are swiped through a terminal directing charges to hotel bills.

"It's convenient to have one card that opens the door, buys soda, food in the deli or convenience store and works in laundry machines," said Jensen.

"A lot of our customers don't have access to cash. They're in transition so they need to do things like washing and vending. It's been very well-received," he said.

Employees also use the system by swiping their identification badges to make purchases that are then deducted from their paycheck.

Jensen also reports growing revenue through increased impulse buying. Since installing the system, he has purchased more machines. "We can track peak hours and know when customers are actually doing their wash."

The Windrose Group is getting ready to launch its product internationally, following positive response at a June technology show in Atlanta and the Hawaii Hotel & Restaurant Expo in July, said Barney. The company already has contracts in Oregon and Colorado.

The CoVendor system's initial software is $8,500, with hardware, installation and other costs adding to the price. The system was installed early this year at a correctional facility in Marion County, Ore. About 30,000 cards have been issued to inmates and employees.

"We have a 60-day turnover of inmates, and this cashless system allows us to track inmates' activities and spending habits," said facility sergeant John Keithley.

A joint promotional venture with Pepsico Inc. also is likely to help the company. Pepsi waives rental fees for its vending machines installed with the card readers.

Since last summer, Pepsi has installed four of its vending machines with the system. Reports indicate machines with the CoVendor card readers performing 30 to 40 percent better than those without the cards, the company said.

"It's a huge win for us," said Pepsi marketing equipment manager Bob Sumpf. "Everyone with a room key can swipe and buy a soda. They don't have to worry about crinkled dollar bills not working."

Since the system eliminates the need for cash, it also decreases the threat of vandalism, he said.

Windrose Group has been working at getting the word out among Hawaii's hotel executives.

"It's a wonderful card for select properties, but it may not be good for all," said Newton Wong, national sales manager at the Ilikai hotel. "It's generating interest in the hotel industry. With technology changing as fast as it is, people would be crazy not to take a look at it."

According to Clifford Reynolds, director of front-office operations at Hilton Hawaiian Village, a one-card system like CoVendor could be of great benefit to hotels.

"If it could save guests' time, it could be very convenient," he said. "But we'd have to take a closer look to examine the costs of implementation."

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