Mövenpick Hotels & Resorts regional IT guru Roger MacFarlaine says that contractual agreements aside, hoteliers should offer at the very least a tiered internet solution to guests

We are on the horns of a dilemma in the hospitality industry, with hoteliers in a quandary as to whether guests should pay for internet access in a hotel or whether hotels should give it away for free.

In recent years WiFi and internet have grown from an emergent technology available in a few hotels to being an amenity expected by any guest. And just as is expected with many other hotel services, our travelling public now want reliable high speed internet access for free. In 2010, shouldn’t internet access charges be a thing of the past? In this economy with companies watching their expense accounts and vacationers looking more and more for ‘value added’ deals, having to pay to use the internet is becoming rather passé.

People are aware that they get broadband for US $25 a month at home, so paying the same amount for one day at a hotel does not make sense. Suffice to say that many a traveller has used free internet access in their search criteria when looking at which hotel to stay at. Let’s face it, if Hotel A is offering an accommodation rate of $100 a night with free internet access and Hotel B is offering a $100 accommodation rate with additional charges for internet access — the choice is clear — all would choose Hotel A.

I believe that free internet access is an essential service that could provide an edge in an increasingly competitive market. Not only is it a question of trying to capture market share, but it is also related to ‘fencing’ and trying to maintain occupancies and revenues against competitors. In particular, budget hotels that have been offering WiFi free are marketing and drawing attention to this service as a way to lure potential customer/guests and as a way to standout from the more expensive hotels.

Many guests say that the most annoying thing is to stay at an upscale hotel that is charging for internet access on top of a very high daily rate. And it is more probable than not that the internet fee is exorbitant (US $25-30 per day).

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The bill please

We have established that offering internet access free of charge is a beneficial sales tool. So why are hotels still charging? Many hotels have made contractual agreements for a number of years with technology WiFi / infrastructure partners that have them paying a significant percentage of profits on a monthly basis in exchange for installing the cabling, access points and billing solution to have such a service. Now that business dynamics have changed and it makes sense to give internet away for the afore mentioned reasons, it is difficult as hotels are legally bound to the terms and conditions of contracts signed earlier. On the other side of the coin, the technology WiFi vendors that are partnering with the hotels are not easily going to change their business model — it is far more profitable to them to see out their signed agreements with the hotel.

Some also argue that if internet is given for free, a bigger problem that may surface is bandwidth usage – who’s going to pay for it? Many a traveller and guest streams movies and videos online, which in turn drains bandwidth resources and reduces performance for all other users. What’s the fix I cry! Offering a tiered solution to WiFi may be the answer. So, internet is provided for free to all guests – the solution would provide adequate bandwidth to access emails and basic internet browsing. However, if you require high-speed and higher bandwidth for online movie viewing then you are presented with an option to pay for that higher end service. So at the time of logging in or accessing WiFi, the guest is presented with a menu that allows him the flexibility to choose whether to take a basic service that is free or a premium service that will come at an additional cost.

Some may argue that internet charges are driven by what the market will bear. For example, internet is free in all hotels in places like Kuwait while in other parts of the Middle East internet is still chargeable in hotels. Although we all gripe, in recent years travellers have been begrudgingly paying the extra cost — so those hotels continue to charge. Are hotels that adopt such an approach being business savvy or just greedy?

In summary and based on experience, business dynamics and guest demand for free internet has seen about 30% of hotels across the region moving away from the fee paying model. This shift will continue as hotels bundle such services in an effort to attract and keep value conscious guests. If hotels ‘buck the trend’ and aren’t adding internet for free as a value added service, then why should anyone choose your hotel?