Wi-Fi: Give It Away Now

Sorry, Sam and Christopher. You're both wrong. While it is true that people don't like to be "nickel and dimed", they shop rates. If I offer a slightly higher rate (than my competitor) that includes WiFi, the majority of customers will opt for the lower rate. Unless all hotels included WiFi within the rate, your theory doesn't work.

Great post, Sam. That's exactly how I feel. And I don’t think it typically matters how much money people have in their wallet… no one wants to be nickel and dimed constantly (at least knowingly). It amazes me that these higher-end hotels don't get this. Since they're supposedly the top-of-the-crop, shouldn’t they provide all the amenities and more of the lower-end brands? Outside of the fact that wireless Internet would likely be about the cheapest thing they could provide guests as a value-add. You’d think that the big flags with both high (paid access) and low-to-mid-range (free access) flags would get this, but it seems to be monkey-see, monkey-do. As long as the other high -end places are doing they do too.

I don't understand why some hotel execs don't get this. Let me put it from my perspective as a young business traveller (traveling 4-6 months of the year). I'm going to a city for a week, 7 nights in the hotel. Hotel A's room rate is $80/night, but they charge $10/day for wifi. Hotel B's room rate is $84/night, but they have free wifi. Over those 7 nights, I would probably max out at using a $10/night internet service maybe twice, because I don't want to pay that much. So the hotel would get just $20 out of me for the week. However, when I see that the other hotel is only $4 more a night, and will let me get online at any time, I'm going to go there EVERY SINGLE TIME. At the end of the week, they have made $28 extra. The cost to both hotels is the same (actually, Hotel A probably pays more for the billing support), so B has profited. In the end, I spent more money, but I had a much more enjoyable experience. Saying that charging everyone for a service that not everyone will use will drive people away is simply untrue. If the additional cost is spread out amongst everyone, the additional cost is generally negligible to the individual, but reaps benefits to the hotel. I see it the same way with airline baggage fees. I'm not going to even care about the difference in a $250 or a $260 ticket, and most people wouldn't. But I'm pissed off when I buy a $250 ticket then have to go give them an extra $10 at the airport to check a bag. If the fee was charged to everyone unknowingly, few would care, and the airline would probably fare better. All that extra fee has done is cause more and more obnoxious carry-ons to appear. Business accounting-type people rarely think like the rest of us, and always think that raising the base price, even a small amount, will drive off customers. WRONG. Excess extra fees drive off customers...at least customers like me.

The data infrastructure of a Hampton Inn or Holiday Inn Express is different than that of a W, Park Hyatt or JW Marriott. The technology demands of guests at higher end brands has been ramping up explonentially with the advent of VoIP, YouTube and the Sling Box. The demands of your local marketplace certainly come into play here. A business district or airport hotel attracting guests on expense accounts is willing to pay in order to "

We need to go back tell the Franchise company. How come Hampton provide free WiFi, but higher catagory Hilton charges for the same. Simple-Hilton do not own or manage any Hamptons, So it is cost to their franchisee. On the other side Hilton either owns or manages most of the upscale properties, so they made a profit center. Ummm...Should we talk about Breakfast now?

If Hampton Inn and similar budget chains can give WiFi away for free, so can full-rate Westins, Hyatts, Marriotts, Ritz-Carltons and the like. It is pure greed on these chain's parts to charge for this NECESSITY. They need to change quickly.

I agree with Laurens from Belgium, that free internet access can be limited to a speed that is slow. This way, it prevents leakage of phone revenue from guests using VOIP phones.

Although wired, my guests pay € 15.00 per 24 hrs for internet access. Never a complaint. Not charging means leaving money on the table, which makes no business sense. Look at your market, determine what your guests want (which is "having an option") and come up with a solution that fits your business. Be creative!

Its madness to offer wi fi free and bundle into rates! Look at what the airlines have done - offer a value base product and then customers pay for what they need, and they are happy to do so. Also remeber that gen x and gen y are happy to pay for anything, so long as they perceive it to be VALUE. Why not try something different - offer a busniess grade connection, guarantee it, and customers will happily pay! Bundling all into a room rate is the fast way to eat into your margins - and unfortunately the US hotel industry has already gone too far by offering free everything, so there is no turning back now!

Why charge every guest for something not all of them use? Whay about recovery of installation costs for the system? I my mind it is unfair of guests to want WiFi for free. What's next?

I agree that consumers certainly and recognizably get upset to pay fees for internet. As a hotelier however, we need to find a way to offset the revenue loses to cell phones and now the lack of internet charges. Room rates simply cannot be raised high enough to offset the profit erosion caused by these "consumer expected" comp services. Need to find a "win win" solution.

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?

What? going to respond but think I'll wait for a review by the author.

In any business, we recognize that profit is paramount to the success and we try to make as much from a customer if we can and still deliver value for money. As a customer, we want to avoid paying but also want to feel that we are not paying for something that we don't use. So, who wins? The answer to this is price it correctly; i.e. only charge for what is being used. In this case, WIFI internet is one good example. As some of the comments here, why package it to the room rate when not everyone needs the service? If you pay for it, you can demand the service that you expect! If you don't pay for it, is it good enough to accept sub-quality service or product? In economic terms, price determine demand and supply!

I agree with the response above. Are there any hotel chains that give you the option?

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.

If everyone gives it away for free, what is the compelling offer that drives incremental demand? Adding $10 to Rack rate is deceptively simple, how many people actually pay rack rate?--if the response is high, then the hotel is not charging enough!

I agree wholeheartedly! During my stay at the Ausitn Hilton at this years HITEC I was charged $27.90 for slow, inadequate wired and wireless access. In most properties that I have travelled to, this service is provided free, with sufficient bandwidth to provide reasonable access. This will be the last visit that I make to this particular hotel!