The Wi-Fi Controversy

Question: Is your Wi-Fi free?

A survey from Hotels.com shows travelers view free Wi-Fi as the most important in-room amenity when considering where to stay. As technology has increased over the years, travelers and guests have come to expect that Wi-Fi is included. So why are only 64% of hotels offering free in-room Wi-Fi according to HotelChatter’s annual Wi-Fi report?

Brand Management

According to NYU professor Bjorn Hanson, brand management companies are the reason why high tiered hotels are still charging for Wi-Fi, while lower tiered hotels are building their “free” Wi-Fi into their room rates. From International Business Times, Ismat Sarah Mangla quotes Professor Hanson,

High-end hotels are mostly operated by brand management companies with fees based on a percentage of total revenue; most less-expensive hotels are franchised, and their fees are based on room revenue only,” said Hanson. “Thus, there is an incentive for brand management companies to maximize their revenue — for example, by charging for Wi-Fi — and an incentive for less expensive franchised hotels to have higher room rates — for example, by including Wi-Fi in the rate.”

According to Professor Hanson, profit margins on Wi-Fi fees are over 50%, however when looking at return on investment they’re not profitable. With in-room movie rentals declining by 42% and telecommunications revenue declining by 40% over the last six years, companies and hotels are trying to find ways to offset their technology costs.

Bandwidth Issues

Ever heard your guests say that their connection is frustratingly slow? The problem is your bandwidth levels are not up to par! With many families carrying upwards of five to six devices, hotels and motels are becoming overloaded with data usage. Joe Brancatelli, a seasoned business travel columnist reports that the average sized hotel cost $1000 per room to wire internet and an additional $20 to $40 per month for each room. Not to mention, as technology continues to evolve, demand will increase for higher bandwidth levels and newer hardware installations. Cost is one reason, hotels and motels don’t have “free” Wi-Fi.

Tiered System

The tiered system has an early indicator that it will become the industry standard in the next few years. What is the tiered system? The baseline for the system is that all guests receive free Wi-Fi for simple tasks such as browsing and answering emails. For guests that want high speed internet or additional devices added to their room, additional fees are added. For example, the Four Seasons Westlake Village, in the suburbs of Los Angeles, offers free basic Wi-Fi for all guests. If you stay overnight, you receive free Wi-Fi for up to two devices. If you want to add up to four devices, the premium service is $12 per day. Four Seasons also gives the premium Wi-Fi package to any customer who purchases a room at the advertised rate. The tiered system is a win-win situation. It caters to customers that only need to answer emails, while allowing those that need higher speed internet for activities such as Netflix, the ability to upgrade.

Keep reading for solutions to the friction that is Wi-Fi!

Solutions

Sam Shank, CEO of HotelTonight, compares slow and spotty Wi-Fi to a hotel that advertises a full size gym, but in reality only has a few dumbbells. Look at Wi-Fi as an amenity, if it’s slow, it’s failing. For most budget hotels and motels, offering free Wi-Fi in the lounge or common areas is acceptable. You get what you pay for right? For higher end hotels, if you charge for Wi-Fi, it better be responsive. Here is a list to help your hotel or motel get on the right track in regards to Wi-Fi.

  1. Hotel Loyalty Programs
  2. Increase Bandwidth/Hardware
  3. Tiered System
  4. Increase Room Rate
  5. Research Internet Companies for Best Deal
  6. Have Service Level Agreements (SLA)
  7. Train staff for network troubleshooting

Next time a guest complains about slow Wi-Fi or paying for Wi-Fi, consider an item on this list as a solution that can help your hotel or motel satisfy guests! Keep your hardware and bandwidth updated, and don’t be afraid to try new things. Technology is constantly improving, so make sure your establishment is evolving with it.

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