Hotels and the lack of free Wi-Fi

WiFi has been has been improving in speed and reliability since it was first introduced 10 or so years ago. Free WiFi hot spots are popping up everywhere – from coffee shops to public squares even McDonalds has free Wi-Fi access in London.
Last week I read an article on fabriceburton.com, should internet connection be free in all hotels? It is a good question and something which I have often pondered whilst forking out for the service on overseas trips.
I recently stayed in an (average) 5 star hotel in Dubrovnik, Croatia. I had to do some work whilst there and couldn’t avoid having to pay for their cable internet which literally cost a quarter of the room price per night for 24 hours.
Surely this is not the ‘real cost’ of supplying guests with a subpar, slow broadband connection…
With the increasing use of Wi-Fi products (think I-pad, I-Phone, Kindle etc) and more people travelling than ever before in history, the need for wireless internet in hotels is not going away. How then is the hotel industry going to satisfy the demand and keep up with the ‘free Wi-Fi revolution’?
London has good examples of the disparity between hotels with free Wi-Fi and those with a paid service. Many hotel chains claim it is the price and logistics of setting up a network which keeps the service at a premium.  The London Ritz charges £25 per day for it’s in room service whilst the similarly priced Andaz hotel not only supplies free in room internet but also free non-alcoholic beverages and snacks from the mini-bar!
Premium hotels claim that the cost of their internet is small in comparison to the room prices, therefore their customers will be happy to pay. This is not necessarily true. There is a growing indication that free/cheap WiFi is a make or break convenience for many hotel guests and can sway booking decisions. Yotel (a very cool ‘capsule’ based hotel chain at Heathrow and Gatwick airports) says that 70% of its guest’s decision to stay was based on the free WiFi service.
Robert Smith, managing director of Complete Hotels Services has had years of experience setting up WiFi systems at hotels across the UK. He has recently set up a free system at The Plow and Harrow Hotel in Birmingham after management realised that their lack of accessible internet in the hotel was seriously costing them guests. I asked him if the dropping prices of installing WiFi systems has influenced hotels decisions to opt for a free option.

“The cost of the systems has changed greatly if you compare like for like however other factors have changed which has increased the cost. For example the amount of bandwidth some customers want and hence the need to have a managed switch, the reliability & strength of the wifi signal and also the cost of installing ‘future proofed’ IT systems”.

Bandwidth is surely an issue. Though most hotel guests specify  their main requirement is  ‘checking email’ which is a low bandwidth service. It is surprising that a budget chain such as Holiday Inn can afford to have a free service across it’s US and soon to be UK chains (which also includes free local calls) whereas the Four Seasons still charge a premium 24 hour service. If bandwidth is a serious factor in the cost, then there appears to be a few options.
‘Freemium‘ is a business model being used more and more in the cyber world, popular site Reddit has recently adopted a freemium service to fund extra staff to run the expanding site. A Freemium service in the context of hotels could mean that guests have a free low-bandwidth (or capped) service in their rooms but can then pay for a premium service. I asked Robert Smith if he thought this would be applicable in the industry.

“This is a possibility but does mean more complicated hardware and controls. A simply option would be for hotels to offer a short (say 15 minutes per day) free logon to deal with emails and if the customer wants to surf the net further they pay.”

This model has been adapted by heavyweights such as Microsoft and Google in airports and public spaces. Microsoft will offer 15 – 20 minutes of free Boing access in return for watching a 30 second video. Maybe hotels can partner up with the Search Engines an offer a free service in return for a small amount of unobtrusive advertising. Or they could partner up with local business and get paid adverts to offset their setup/running costs.
With so many options available it seems archaic that heavyweights such as The Mandarin’s and Ritz’s still believe they can get away with charging extortionate prices for a simple internet service. Considering you can stay at the Caravelle Hotel in Ho Chi Minh City and not only receive free WiFi across all rooms but also in the Hotels fleet of cars!!!
It seems to me that it’s not so much an issue of cost, Holiday Inn is proving that large, budget hotels can afford (and more importantly make money in bookings) from a free WiFi internet service. It may just be the old issue of dinosaurs not keeping up with the times (think of the recording industry in the last 10 years). Large, established hotel chains believe that if their guests are  happy to fork out for the room then why not for the extras. This may have been true ten, or even five years ago, but not in today’s market. These dinosaurs are going to have to re-think what is considered the norm for basic services or soon find themselves with empty rooms and no one to charge to login.
As Andrew Evans of Gadling.com says in his inspired rant on the price of wifi

It’s already twenty-ten A.D. and Wi-Fi should be free.

If you would like to find out what hotels near you have free WiFi checkout the blogs on Hotel Chatter and for hotels in London see Hotel Insights list of free Wifi Hotels.
Robert Smith blogs about the hotel industry at http://thehotelconsultant.blogspot.com/