Wi-Fi Or Die: Why Hoteliers Need to Stop Charging for Wi-Fi

It may be hard to fathom, but when it comes to technology there are pockets of obstinacy in the hotel business. Even these days, many hoteliers are reluctant to offer guests free Wi-Fi or wireless fidelity, as it’s known by its proper name. It’s easy to spot obstinacy, but it’s often difficult to change, yet there are plenty of reasons hoteliers should provide free Wi-Fi to customers.
Firstly, the world is moving at warp speed. Already we’re midway through 2012. The Internet is virtually inescapable and many of us can’t live without it. Sure, providing free web service in a hotel was once considered a luxury item — a chargeable amenity. But in recent years the technology that allows data to be exchanged wirelessly has become a staple. It’s an essential service, which is expected wherever you go. Remarkably, many hoteliers in the marketplace are still charging guests to access the Internet. Hotel operators who don’t offer free wireless need to ask themselves whether it would be fair to charge guests a surplus for heating, air conditioning and water usage. Surely, the answer is a resounding, no. So, why would you ask a customer to pay for Internet access? “Wi-Fi is essential technology,” says Renato Alesiani, president of Encinitas, Calif.-based Wave Crest Resorts. “Charging for Internet access is pure exploitation of your guest.”
Today’s smartphones and tablets can only access the web by using a wireless Local Area Network. The beauty of wireless connectivity allows work or pleasure surfing without pesky wires. It’s important to remember there’s strong demand for free wireless access — not the wired, antiquated kind of connection.
The job of a good hotelier is to make guests feel as comfortable as possible. To borrow a catchphrase from Marriott, the hotel you’ve chosen should be your home away from home. Now, imagine having a friend stay at your home who wants to surf the Internet on their smartphone. While they could use their own data plan, purchased from their carrier, they instead ask you for the household’s Wi-Fi password. How awkward would it be if you said, “Sure, that’ll be $10.”
Hotel marketers grow business for their clients with slogans such as “Feel right at home” and “Let us cater to your every need.” Charging a guest an extra fee for an essential service doesn’t make a guest feel right at home. You wouldn’t expect a fee at a friend’s house, so why would you expect it at a hotel?
Undeniably, many of us are now hooked on the web. And we expect free Wi-Fi. Restaurant chains such as McDonald’s and Starbucks offer complimentary Internet access, and their clientele don’t spend nearly as much as guests do on a hotel room. Don’t start off the relationship with guests on the wrong foot. Free Wi-Fi is an easy guest expectation to meet.
Surprisingly, some hoteliers have the audacity to charge $20 per day for Internet connectivity. It’s
a fee more in keeping with 1999 than 2012 and viewed by many guests as insulting — an instant turnoff. With the prevalence of smartphones, guests may choose to access the Internet using their 3G network and accrue their own charges rather than accept a hotel’s exorbitant Internet fees.
Many hotels have a tiered system of Internet access. They’ll offer a basic connection free of charge then ask for a sizeable payment, ranging from $15 to $20, for the high-speed edition. With the multi-level program, most guests will try to jump on the Internet at the lower, free connection level. However, the low-speed connection comes with terrible bandwidth; a task as simple as downloading emails becomes mind-numbing.
Inevitably, guests will purchase the upgraded version for peace of mind.
But these excessive fees generate negative feelings towards your property. And your guests will wander off your premises to scoop a free Wi-Fi signal from a nearby restaurant. Now, you’ve created an F&B problem. Instead of spending money in your hotel, your guest is spending money elsewhere. By making them pay for wireless, you’ve encouraged them to leave their rooms, decreasing potential revenues. Don’t let Internet obstinacy get in the way of sales.
As a tool, free Wi-Fi keeps guests spending money at your hotel, but it’s not a make-or-break feature. It’s true, some discerning consumers might not choose your hotel specifically for that reason, but they’re in the minority. In most cases, Wi-Fi fees are a small and entirely avoidable grievance that may contribute to a guest leaving your property unsatisfied. Mediocre online reviews and poor word of mouth are also part of the fallout.
Charging customers Wi-Fi fees could cause resentment, so why risk it? Complimentary services make your guests feel good — they amplify positive feelings and make good business sense. In the grand scheme of things, free Wi-Fi is an inexpensive endorsement to buy, especially when compared to refurnishing rooms or upgrading facilities. Remember, when the Internet is served on a silver platter, it’s an open invitation for guests to sing your praises online.
It’s also worth noting that hotels often include free in-room Internet access as a feature to help sell loyalty memberships. But why would a new guest join a loyalty program if your hotel hasn’t made a good impression with essential services? Is heating and air conditioning a part of your loyalty program, too? Guests won’t sign on to your loyalty program only to negate inflated connectivity fees. They’ll buy in because they’re impressed by your core services and amenities, which should already include free Wi-Fi.
So let’s consider some solutions. Even after weighing the pros and cons, many hoteliers are reluctant to change due to legacy contracts. But don’t let these contracts be your excuse for transferring additional fees to your customers. Guests don’t care about legacy contracts. If these contracts hold you back, bury the Internet surcharge into your nightly rate, much like you already do with the room’s utilities. Or, read through the original agreement you have and find a buyout option. Pay it and move on. The one-time fee, in addition to the installation charge for wireless hubs and repeaters, is nothing compared to the revenue losses from unhappy guests.
Free Wi-Fi is the best solution, but, below are three ways to create a win-win situation:
Package Deal: Offer free access as part of a larger amenity bundle. Get creative. Think of it as a “lifestyle package” showcasing an array of features that make your brand exceptional.
Tiered Plan: Only offer free Wi-Fi in premium rooms or suites. The waived fee becomes an added perk, validating the more expensive purchase and giving regular guests another incentive to upgrade.
Enhanced Web Portals: In addition to being a web gateway, these systems can integrate amenities such as laundry, dry cleaning and room service. Portal companies are known to handle the Wi-Fi network installation and upkeep costs, satisfying guests with free accessin exchange for pop-up banner advertisements.
Complimentary Internet service is now a part of business, in much the same way your property should have a Facebook page; you should also be linked to the major OTAs and Twitter. The real solution, however, is a fundamental change in a hotelier’s mindset. Resistance towards free Wi-Fi translates to an unwillingness to adapt to the times. It’s not written in stone that you must maintain an online presence, but it will surely hamper your business not to conform. Treat free Wi-Fi the same way.

Sad as it may seem, baby boomers no longer have complete command of the North American market. To scores of teens and young adults, Internet usage fees are an assault against their core beliefs and will not build loyalty. You have to lay the seeds with the tech-savvy generation to ensure long-term survival. Free Wi-Fi is part of the bigger picture. Keeping an open mind to the rapidly shifting consumer mindset is now more important than ever. As Adele Gutman, VP of Marketing, the Library Hotel Collection in New York says, “People want to stay connected with their business and their loved ones. That makes them happy. Free Wi-Fi is the conduit to that connection. As hoteliers, our goal is ultimate guest happiness.”

(Published in HotelierMagazine on July 16, 2012)

Larry MogelonskyWi-Fi Or Die: Why Hoteliers Need to Stop Charging for Wi-Fi