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Free WiFi: Do the Math

This past weekend was a statutory holiday up here in Canada, affording me some extra time to get caught up with industry periodicals, surfing the web and general reading. A subject line that caught my eye read: “Free WiFi, This Topic Again?”

In great detail, a techno-centric article discussed bandwidth requirements for the average hotel, providing several interesting forecasts and recommendations. The article correctly brought attention to the fact that the digital experience for a consumer includes the ability to seamlessly and simultaneously interconnect their laptop, tablet and smartphone. This means that with a couple in a room you could have six devices. Add kids and you’re facing the potential for 10 devices.

Then in the same editorial, I read an article released by Cornell University’s School of Hotel Administration. The piece correlated TripAdvisor rankings with market share. While not getting into the specifics, there was a direct and immediate correlation between higher rankings and share. Lastly, another article caught my eye discussing millennials and their importance to the world of travel. For them, it was cited that the lack of free WiFi and poor bandwidth were the greatest disincentives to booking a property.

So, stringing the ideas together into some cohesive reasoning, free WiFi heightens the motivation for millennials to stay with you. A demographic you simply can’t ignore these days, millennials are also the most ‘tapped in’ generation – key contributors to your TripAdvisor ranking. The logical deduction from there is: more millennials approval of your free WiFi means a better chance for improving your online scorecard which translates into increased market share.

Now let’s throw some math on this inference. Setting all installation fees, equipment requirements and upfront capital expenses aside for the moment, let’s assume a nice round figure for the costs of offering free WiFi bandwidth at 10 dollars per room per month. That, combined with a 60% occupancy rate, means $16.66 amortized for each occupied room per month, or about 55 cents per day per occupied room. Rounding off again, let’s call it a buck a day.

Would you pay a buck per room to move your TripAdvisor rating up even so slightly, knowing what the results might be? You probably pay that amount for many other equally important services, especially given that internet connectivity is widely deemed a necessity for numerous consumers. The reasons for not offering this service for free are rapidly depleting. So, what am I missing here?

(Article published by Larry Mogelonsky in eHotelier on December 11, 2013)

Larry MogelonskyFree WiFi: Do the Math