Monetizing Free Wi-Fi

By Adam Kirby, Associate Editor -- Hotels, 3/1/2008

Hoteliers torn between the allure of extra revenue from Wi-Fi and the desire to satisfy guests expecting free Internet access should consider exploring an emerging vendor niche—monetized complimentary access.

The concept allows hoteliers to generate revenue from guest Internet usage by contracting with a vendor that displays advertising throughout the duration of a Web-browsing session. In exchange, the user gets free Internet access, much the way a television viewer accepts commercial breaks in exchange for free programming.

California-based AnchorFree is one of the larger vendors offering such a product to the hospitality sector. The company pays hoteliers a percentage of its ad revenue generated from guest views—for example, a hotel with 150 rooms could expect to generate approximately US$25,000 per year in revenue. AnchorFree also provides hotels with software-equipped Wi-Fi routers at no charge.

The company even allows hotels to insert their own marketing materials into the Web browser ads. For example, a hotel could require guests to login with their loyalty club numbers, and then by accessing guests’ CRM profiles, the software can be configured to give guests relevant marketing pitches over the course of the Internet session.

“To generate premium revenues from these users, we enable hoteliers the ability to execute a sequential personalized experience with a user for the entire time they are on the Internet,” says Mark Smith, AnchorFree’s executive vice president for strategy. “This is much more than simply a pop-up ad that they may or may not click on.”

The ads come in the form of a “persistent desktop presence”—a banner ad atop the browser that rotates every 15 seconds. To avoid annoying guests, the program allows guests to close the ad, but the opt-out rate is extremely low—around 1%, Smith says.

AnchorFree executives say the company has about 3,500 franchised hotel properties in North America and 1,000 properties in the UK under two- and three-year contracts, including local deals with IHG-, Hilton- and Marriott-branded properties.