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Blog
Free Wi-Fi Is A Pandora's Box Already Open
July 3, 2008
An interesting dichotomy has sprung up in the comments sections of my recent posts regarding free hotel Wi-Fi, between those hoteliers vehemently opposed to the concept of giving away anything of value and hoteliers who have been offering free Wi-Fi for years and view it merely as a cost of doing business. And then there are a handful of amusing posts from the free Wi-Fi enthusiasts who found this blog via HotelChatter.
Commenter JoostCnd makes a terrific point that I hadn't considered, writing: "We do not charge for wireless and we administer the set-up and bandwidth allocation ourselves. This is much appreciated by our clients. The provision of wireless these days can be likened to other amenities that are included in the base rate for the property, such as free to guest t.v., in-room safes, dvd players, telephones, and even things like shampoo, soap and towels. Not everyone uses them, but everybody contributes toward the cost of providing these basic service requirements."
I find this to be a brilliant observation. It is unthinkable that a hotel would charge guests access to basic television, but that doesn't mean TV is not a substantial revenue center. Just as NBC is free but VOD porn isn't, hotels should make a moderate level of bandwidth complimentary while a more intensive level should be an expense. Simultaneously, hotels can still recoup a margin of the Wi-Fi infrastructure cost by selling embedded ad space in Web browsers.
Refusing to make Wi-Fi complimentary was a viable long-term solution at one point, but once the first enterprising chain opened that Pandora's box, there is no going back. It is now an expectation of most travelers, fair or not, that Wi-Fi not be more expensive than the liquor in the mini-bar.
Here's another snippet from commenter Laurens from Belgium: "I would give it for free if it would bring in more bookings. But it doesn't. And once everybody gives it for free, you're stuck with the cost of it all. So paying a fair price for what you use seems logic for me. Break-even for the hotel, and no rip-off for the guest."
I think most travelers are willing to give a little ground here. A nominal charge for Wi-Fi access—say, US$3 or US$4—would generally be seen as fair, if perhaps slightly annoying. But when a hotel charging US$300 a night wants an extra US$15 for 24 hours of Internet access, that doesn't do much for guest satisfaction or brand loyalty. That's especially true when travelers see that budget brands like Fairfield Inn can afford to offer free Wi-Fi, and thus realize that it is not an inabsorbable cost.
People can differ over whether a nominal charge for Internet access to offset infrastructure costs is reasonable and fair. But is anyone out there really willing to defend US$15 a day as good business? It may or may not be profitable in the short run, but between competitive market forces and the dampening effect it has on consumer goodwill, even the most ardent opponent of free Wi-Fi must admit that US$15 Internet can't be a winning strategy long-term ... right?
Posted by Adam Kirby on July 3, 2008 | Comments (11)
In response to: Free Wi-Fi Is A Pandora's Box Already Open
JoostCnd commented:
Adam, I am flattered that you think the observation I made yesterday brilliant, but if you have been in the industry for as many decades as I have, you would know that issues like these are cyclical in nature and there will be new technology or services, that the first implementers will use as revenue generating, either as extra charge or rate drivers. As the hotel guests evolve and experience these new "things", soon they will become the expected norm and will not likely support additional charges. It would be interesting to know how many of the commenters on these last three postings of yours provide flat screen t.v.'s (for free) and still charge for wireless?
In response to: Free Wi-Fi Is A Pandora's Box Already Open
MarkJohns commented:
I agree completely with this article, as it relates to a 'nominal' charge for a limited bandwidth. What upsets me is a property charging anywhere from $12.00 - $20.00 per 24 hour period. As a guest may stay with a property for 3-5 days, this results in the guest potentially spending more than they would for high speed internet for the month in their home. A recent property I stayed in charged me $19.00/24 hour period. Two properties down, it's free. Guess where I'll be staying on my next trip? And JoostCnd makes a wonderful observation, flat screen TV in each room, and no charge? Someone do the math and explain that one!
In response to: Free Wi-Fi Is A Pandora's Box Already Open
aino_d@yahoo.com commented:
No question...nowadays it's part of almost every travelers' gadget and needs to be freely available. It would be ridiculous to charge a minimal fee, as he just may go to the nearest shopping mall and have free WIFI access or may sit in a hotel lobby of a competitor and has free access...and may just check in there the next time around...
In response to: Free Wi-Fi Is A Pandora's Box Already Open
Milena Findeis commented:
In response to: Free Wi-Fi Is A Pandora's Box Already Open JoostCnd commented: This year we have installed Samsung Flatscreens in Josef, Prague. Internet connection is free of charge. As well as the use of our gym.
In response to: Free Wi-Fi Is A Pandora's Box Already Open
laure longueville commented:
In the 19th century there was no gas, and then came "Gas on each floor", I cannot imagine in a couple of years an hotel without free Wi-Fi, it will be stone age like an hotel without shower in the room.
In response to: Free Wi-Fi Is A Pandora's Box Already Open
Thoughtsy commented:
No one brings up a reality that is keeping a charge for internet usage. The pioneers that added the amenity to their hotels most likely did so as part of a contract with a supplier. The internet provider most likely does not want to lose all it's revenues, so is holding fast to the contact initially signed. Once these run their course, properties will most likely look for an option that is more agreeable to everyone, hotel and guests alike.
In response to: Free Wi-Fi Is A Pandora's Box Already Open
Daryl Jaeger commented:
I am still defending my point of charging for internet, depending on the market. It seems that US life has free internet access for everyone, but in a market where this is not the case, it is still a source of revenue to be considered. I will concede that a 24 hour charge of 15 Euro/Dollar is steep, but he hotel will keep charging as long as the internet revenue is triple the cost of supplying it. And browser embedded advertisement? I don't believe that the supplier would let me choose the contents of those ads. It's all about your market and their expectations/wishes. We should be talking to them, not amoung ourselves.
In response to: Free Wi-Fi Is A Pandora's Box Already Open
strax commented:
You may also like to consider Hotels which operate in markets/countries where the telecoms operator is a monopoly and where the cost of bandwidth is nowhere close to the UK or USA. There are developed markets and there are developing markets.
In response to: Free Wi-Fi Is A Pandora's Box Already Open
shawn thomas commented:
I think this is unbelievable. Ever heard of supply and demand. If someone does not like to pay the Internet charge at that hotel, don't stay there. Duh And if you are indeed a true business traveler that knows how to stay connected, you have a cellular card in your laptop by now so you never have to pay for that service. And for the remote areas that do not get cell coverage, the only hotels will be small anyway and have free wifi. I am sick of people blaming companies like Marriott and Hilton and other high-end hotels for charging for Internet access. I am a platinum member and never complaign. I don't stay there because of the Internet. I like the service that the "brand" provides and I am willing to pay for better service. As for you Adam, before you make "recommendations" to someone's business, you should try running and operating one for at least 5 years first. Things are never as easy as you would think. Get out there and play first and then tell us what you think.
In response to: Free Wi-Fi Is A Pandora's Box Already Open
MC commented:
As a seasoned business traveler I must agree that there is a bit of reverse logic here when we see lower cost properties providing more "free" services such as free internet and we may as well also include more TV channels as well. It is the reverse of what some of the more successful low cost air carriers in Europe have done...charge a lower point of entry cost but then charge for additional services...and customers pay since their initial cost was low. Just a thought....
In response to: Free Wi-Fi Is A Pandora's Box Already Open
Mike Hughes commented:
Charging for Wifi is like charging for air-con, or charging for a lift ride.


