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Blog
In Defense Of Free Wi-Fi
July 2, 2008
I have to admit, I am a little surprised by the vitriol generated by my post last week encouraging hoteliers to stop charging for Wi-Fi. Considering that post generated more comments than all the rest of my posts combined, I guess I hit a nerve.Commenter Bill seems to sum up the main objection, writing: "Why should we charge ALL the guests for something that only 20% of them actually use. Should we give a away free beer and tack that on the rate too? In my mind, Americans would rather get what they pay for and pay for only what they get."
I happen to like beer, but it's a fair point. So I propose a compromise: Give Wi-Fi away, and don't roll it into the rate.
That doesn't sound like much of a compromise, does it? Allow me to explain.
There are two basic ways to monetize free Wi-Fi, without rolling it into the room rate.
The first is bandwidth upsell, which commenter Laurens from Belgium alludes to: "If everybody gives it for free, there's no competitive benefit for the hotel any more. How about this? Free wifi but limited to 256kb bandwith. If you need more speed or volume, you pay a fair price. Wouldn't this seem more reasonable to today's traveller who expects to be connected to the net 24/7?"
Laurens is right on the money, so to speak. A number of vendors offer technology that regulates bandwidth consumption and lets intensive users pay an additional fee for faster speeds. Off the top of my head, EthoStream, eTelemetry, Wayport and Elfiq are among the vendors with this kind of product. The benefits of a bandwidth management solution are threefold: you satisfy guests (like me) who just want to check their e-mail before going to bed, while also keeping Internet access a viable revenue center and ensuring that your network backbone doesn't get overloaded by a dozen guests using their Slingboxes.
The second option for Wi-Fi monetization is browser-embedded advertising. Frankly, to me, this one seems like a no-brainer. Essentially, you hire a vendor to equip your Wi-Fi network with software that embeds targeted ads into the Web browser. Your hotel then gets a cut of the ad revenue, which, according to one such vendor, AnchorFree, can easily exceed US$2,000 a month. (eTelemetry's new Notify product is another product definitely worth checking out.) And besides the outside advertising, the hotel can promote its own offerings—spa, roomservice, you name it—to guests already on the property.
Are extra banner ads a little annoying? Sure they are. But I'm telling you, as a cheapo traveler myself, I would be happy to have one-eighth of my monitor obscured by a roomservice ad if it means not having to cough up US$14.95 a night. And since I just saved that money, maybe I'll splurge on roomservice instead of going next door to McDonald's.
Make your guests happy and that lost Wi-Fi revenue will find its way back into your coffers, one way or another.
Posted by Adam Kirby on July 2, 2008 | Comments (9)
In response to: In Defense Of Free Wi-Fi
Adriaan commented:
We don't charge for WiFi - the guest appreciates it and there is no administrative hassle. For the little cost to the hotel it is well worth it for the increased guest satisfaction.
In response to: In Defense Of Free Wi-Fi
James Carmody commented:
Seaport Hotelin Boston hard wired and now wireless access has been complimentary since the hotel opened in 1998.
In response to: In Defense Of Free Wi-Fi
JoostCnd commented:
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.
In response to: In Defense Of Free Wi-Fi
European View commented:
Why should you charge for something that is free all around? Welcome to e-world in Estonia!
In response to: In Defense Of Free Wi-Fi
To Commenter Bill commented:
The reason only 20% are using your WiFi is because you are to expensive. The others went to a coffee shop and got it and you lost out on the F&B revenue also. On top of that, that 80% is looking to stay some where else the next time.
In response to: In Defense Of Free Wi-Fi
RPOS commented:
We've been giving free wifi and free beverages from the mini bar (beers + more) to all guests unconditionally. Its been afew years already & so far so good!!
In response to: In Defense Of Free Wi-Fi
Andrew commented:
Adam you continue to look at the issue based on the research of 1 - yourself. I am involved in Wi fi at hotel brand level. Consumer feedback related to a chain that offers free wi fi accross all properties shows the second highest COMPLAINT about the properties is the internet access. This stems from offering a free service that in many cases due to bandwidth and download issues results in inferior service to guests. I agree with Laurens - and remember this perspective is to charge for the service if it is genuine high speed (the free service will be similar to dial up, so really they are not offering free at all). So why not forget about the misleading promise of free wi fi and just offer good honest value - a fee relevant to what you get. If you want to download dvd's of 2 gig then pay $15, however for a good, reliable, genuine high speed experience pay $5.00. Most corporates and leisure alike will see this as value. And its not about the revenue to the hotel either - its about moving the US industry away from offering eveything for free and killing hotel margins.
In response to: In Defense Of Free Wi-Fi
Laurens from Belgium commented:
As a guest, only an idiot wouldn't want it for free. As a hotelier however, let's talk about numbers: 30.000 eur to get wifi installed and working in my 120 rooms/bar/meeting rooms + 700 eur monthly for a RELIABLE DSL line + 900 eur for a 24/7 tollfree help desk in 6 languages (you need that for the 70% who can't work with a pc and the rest who's IT department allows them to click on nothing but the start button.) So please excuse me for trying to earn back the money i've spent on it so far. 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.
In response to: In Defense Of Free Wi-Fi
laure longueville commented:
free wifi is everywhere, in towns, in public gardens, in tank stations, in the streets of big towns, and, as guest, i hope to have it in my preferred hotels. it's difficult to gain a new client, it' s more difficult to do somethig for he comes AGAIN. free wifi is a normal investment like new furnitures, beds, decorations... Laurence Longueville - Geneva -


