By Kris Madden
The debate about free Wi-Fi continues to challenge hoteliers. The question is: can hotels afford to provide free Wi-Fi – or can they afford not to?
Today’s ‘must-always-be-connected’ guests, especially business travellers, are making decisions about where to stay partially based on the internet service a hotel provides.
A number of surveys show that free Wi-Fi takes pole position in customer ratings of the most important room amenities. Research by Hotels.com found Wi-Fi access ranked higher than any other hotel amenity, including complimentary breakfast and free parking.
But as hotels know, Wi-Fi is never really “free”. There is a cost in providing internet access be it to the hotel, guest, or both. In its 2012 Hotel Wi-Fi Report, industry website HotelChatter estimated the cost of wiring up a 250-room hotel to be around US$125,000.
These days, guests are carrying multiple devices, and their demands for bandwidth are continually rising. So the issue is not simply one-size-fits-all ‘free WiFi’, it’s more complicated than that.
Not all guests have the same connectivity requirements so some hotels believe not all guests should receive the same service or pay the same price. Bandwidth based on speed, data, or time is a way for hotels to tailor the connectivity service based on what a guest wants to do. Examples might be those who want to simply check emails get access for free, while guests wanting to stream movies might pay a fee.
Brands like Hilton and Hyatt have announced that they’re offering free Wi-Fi access in their guest rooms. But only their higher-tier loyalty members will get premium, high-speed service for free.
Marriott has announced free, basic Wi-Fi for its lower-tier loyalty members. But to qualify, guests have to book directly through the hotel’s website, app, or reservations line.
Accor has chosen to provide unlimited free internet for its loyalty club members who have reached silver status and above.
“Accor is always looking for ways to provide improvements to the guest experience and leverage developments in technology,” says Accor guest technology manager, Grant Ironside.
“Offering Wi-Fi to our guests is the combination of two technology components: the supply of ISP services, or the internet “pipe”, and the hardware and support to connect our guests’ devices.
“While we are seeing better value in supply of ISP links, this is being matched by an increasing guest appetite for these services. The hardware required for the distribution of internet service throughout the hotel still requires a large investment in infrastructure and ongoing maintenance.
“We are considering the future need for guest bandwidth requirements and investigating tiered offerings with packages for everyday browsing, and packages for upcoming services such as high definition video on demand.
“These are the conversations we are having with our guests and members along with our technology partners to deliver value to our guests and our hoteliers,” says Ironside.
Technology solutions provider for the hospitality industry iBAHN Australia says whether hotels charge or offer free Wi-Fi, it should be part of a well thought out strategy.
Fifteen years ago Internet access was not available to most, if any guests, and it was certainly not high-speed. Looking back a decade or so ago, most hotels charged for wired Internet access, but even then there was still a debate around whether access should be free or whether hotels were overcharging guests.
The company says hotels have to ask themselves what they are trying to achieve; something better than their competitors, the fastest connection, the cheapest connection, or the most reliable connection. In theory these should all support putting more heads on beds.
An important thing to remember, particularly in the 4 and 5-star hotel sectors, is price is not always the determining factor when it comes to Wi-Fi. A satisfactory experience, speed and security often rank higher for many guests, particularly for business guests who want to connect easily, at high speed, and have peace of mind their connection is secure from hackers and viruses.
Ryan Bowman, managing director of SocialFi, says part of the problem is that hotel owners have been reluctant to turn off that revenue stream because until recently no alternative existed to monetise Wi-Fi.
“At SocialFi, we believe a better option is to use Wi-Fi as a conduit to create a deeper relationship between a hotel and its guests, using social networks as a key part of the solution. Social networks represent an opportunity to create, nurture and leverage these relationships like never before, and Wi-Fi is an ideal conduit to achieve these goals,” says Bowman.
With the pace of consumer technology moving at breakneck speed, it seems keeping up with customers’ demands while finding a return on investment is an issue that will continue to challenge the accommodation sector for some time yet.
