Friday, September 4, 2009

Hotel Internet Access – Luxury or Norm??

These days many of us are connected to the Internet perpetually, whether with our Smartphones, laptops or home workstations.  Our customers, colleagues and friends expect us to be accessible, and not just in the 9-5 realm.  That is reality.

Folks traveling frequently, as part of their job, face the dilemma of balancing the business needs of the trip with everyday responsibilities.  Since much work these days is done online an Internet connection at the “home away from home,” (hotel), is a necessity, not a luxury.Hotel In Room Access

Unfortunately, some companies don’t view Internet access as mandatory, for their traveling employees.  To me, this is shortsighted, but that’s for another discussion, at another time.  The focus of this blog post is to weigh in on the still-pervasive belief, by many hotel companies that charging hotel guests for Internet service is a smart business strategy.

This morning I read a news article posted in the USA Today addressing this subject.  According to a USA TODAY survey of 80 hotel brands, 40% charge such a fee at all or most of their U.S. hotels. The charge can vary at hotels within the same brand but often ranges from $9.95 to $14.95 daily.

One Hotel company, Gaylord Hotels, charges a mandatory “resort fee,” at all their properties, currently $15 per day added to the room rate.  The resort fees includes: local phone calls (first 20 min. of each), toll-free and credit calls (first 20 min. of each), high-speed Internet access in guest room, access to hotel’s state-of-the-art fitness center, bottled water (two per room, per day) and a daily newspaper.

“As long as hotels can generate the revenue, they will charge for it …  There is no more telephone revenue, and this is one way to replace it.” Jeff Weinstein — editor in chiefHotels magazine

I have discussed this issue with many event professionals and the majority of them find these types of fees, especially when they are mandatory, to be a challenge.  In the interest of getting an objective opinion on this issue I created a TwtPoll to address this topic. Please vote as your opinions are much appreciated and will be referenced in a follow up article.

Personally I believe Hotels charging for this service are missing out on a huge customer service opportunity.  In a difficult economy, where business people are expected to do more for less, with fewer resources, offering this service for free would foster very positive customer feedback, and even brand loyalty.  What do you think?  Here are the opinions of two Event professionals:

“I think all hotels should offer Internet access (at the very least WiFi) at no charge in both sleeping and meeting rooms. In many of the lower priced hotels they are already doing this and many upscale hotels offer it at no charge to their best customers. Practically every business traveler has a PDA, Computer or some device with them so they can to stay in touch when out of the office. Hotels who provide this service to their guests without nickel and dime-ing them, I think, will get more business and more loyalty. I am finding at my citywide conventions, the hotels offering free WiFi fill up first.   For our smaller meetings contained in one hotel we always negotiate to get free WiFi for our attendees…at the very least in their sleeping rooms.” Deidre Ross, Director — Conference Services, American Library Association

“Hotels should no longer charge their guests a fee for internet access. At first it [internet access] was considered a luxury, but now it is common…so why charge for something that guests expect? In fact, I specifically seek out hotels that provide free internet access and encourage my clients to do the same.” Emilie Barta, Professional Trade Show Presenter

Please share your thoughts with us on this fiery issue.  I look forward to your responses!!!


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{ 9 comments… read them below or add one }

Midori Connolly September 4, 2009 at 1:35 pm

The mandatory resort fee really annoys me – I don’t use my room phone, I avoid drinking bottles of water unless I can readily recycle the bottle, I generally refuse the paper each day to avoid waste…but I do love the fitness room.
I guess that means for a 40 minute walk on their treadmill I’m paying about $.38/minute. Sheesh. I better start using two gym towels to get my money’s worth!

If I’m paying less to stay at a hotel with free Internet and probably free breakfast every day but with comparable amenities to a more posh hotel (pool, fitness room, gift shop) – why would I choose the more expensive option? To have the option of paying $20/day for parking? For what they might consider nicer decor?

It doesn’t equate. And in this climate when the business proposition doesn’t make sense, it’s just not going to endure.
Midori Connolly
http://www.twitter.com/GreenA_V

Reply

Michael M McCurry CMP September 5, 2009 at 10:03 am

@Midori Connolly,

Your comments are right on Midori!

I think many people share the same opinion that you do regarding the “mandatory” resort fee at Gaylord.

I don’t always have a choice of hotels when I travel as normally I stay at the hotel where my client’s event is taking place but when I do have a choice, I will pick a hotel that has free Internet access over one that doesn’t

It will be interesting to see, especially in light of a tough economy if the business model of charging for this service prevails.

Thanks again for contributing to this discussion!

@michaelmccurry

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Dave Lutz September 5, 2009 at 9:24 am

Mike, I have a feeling your preaching to the choir on this one, but I’m going to surprise you by taking the hotel’s side.

There is a HUGE difference in infrastructure investment and ongoing bandwidth costs between installing and managing a wifi network at a Hampton Inn vs. a Hilton & Towers. It’s really unreasonable to think that a hotel shouldn’t try to recover some of this expense and it’s unfair to fold it in the room rate for those that don’t use it.

I think a happy medium would be to have limited wifi service available for FREE in certain public areas of the hotel – i.e. coffee shop, lobby, business center and to charge a premium for those requiring more bandwidth or convenience from their guest room.

For me, I’m going to stick to my wireless mobile card and argue with the Gaylord hotel about paying the $15 resort fee.

Dave Lutz – @VelChain

Reply

Michael M McCurry CMP September 5, 2009 at 10:18 am

@Dave Lutz,

Dave, while there may be a significant frontline investment in building the infrastructure for a wifi network in a hotel, the truth is the cost of delivering Internet service is exponentially less than it used to be, and continues to shrink.

Internet access in a hotel is as commonplace as cable television or even electricity and to place a premium price on delivering this service to hotel guests already scraping their pennies to afford travel is short sighted and not customer-centric.

As you know The room rate incorporates all of the costs of delivering the guestroom product plus profit. The use of Internet service by travelers, whether business or leisure, is commonplace now, and not unique or unusual. I would love to see some data as to the cost of delivering internet service, on a per room basis at a typical business hotel. My guess is it will be a fraction of what hotels are charging their customers.

Regarding Gaylord, I truly hope they rethink the resort fee concept as it is a sore spot with most event professionals.

Thanks for contributing Dave, as always your comments are valuable!

@michaelmccurry

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Sam Smith September 7, 2009 at 9:38 am

Hi Mike,

Personally, I think that the cost should be free. Here in Europe, two issues contribute to the fees:

(1) The internet and wireless providers cut deals with the hotels to install the infrastructure for free if they got to manage the service and revenue. The venue gets a cut of the revenues with little investment and no risk. These contracts were long term contracts, so hotels have their hands tied until the contracts expire.

(2) Not all venues are capable of handling the demands that some events want to place on their networks. The demands could be volume, number of connections or Reliability/dependability. Even in that case, some of the tech providers can’t get it right…you probably heard about the LeWeb 2008 debacle: http://www.techcrunch.com/2008/12/13/swisscomm-tries-to-deflect-criticism-of-le-web-internet-failure/

Reply

Michael M McCurry CMP September 7, 2009 at 5:12 pm

@Sam Smith,

Hey Sam, thanks for participating in this discussion…

The original intent of my article was to focus in on the individual hotel guest and the issue of whether they should pay for Internet access in a hotel for their guestroom. It has sinced morphed into some sub-themes, one of which is the events side.

As I reflect on what is really troubling me here, I think it has more to do with the excessive nature of Internet access fees in hotels, than the concept of charging for it. If the charge were reasonable (under $5 US per day) I could swallow it without much issue.

On the events side, there are going to probably always be tech issues… and sometimes no matter how well you plan things go awry. I get that… I just wish hotels would realize they are not building customer loyalty by gouging their hotel guests with hefty Internet Access fees. This situation is very similar to the ridiculous “overcharging” for phone calls that we all endured in the 80′s and 90′s.

Thanks again for your comments!

@michaelmccurry

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@MsStallings September 7, 2009 at 3:27 pm

I look for hotels with free internet access. That being said, if the issue was to come down to cost – either the hotel outright demands a fee to use the internet or its hidden in your charges – I am for the idea of only a charging nominal fee for the internet in sleeping rooms. I think that having free wifi in the lobby, but charging for it in the rooms is fair.

As an alternative, do you think that it would be possible for the hotel to sell internet access as a sponsorship? So hotel guests would have to log in through a screen that thanks the supporter of the cost of internet access with a link or short advertisement?

Reply

Michael M McCurry CMP September 7, 2009 at 5:18 pm

@@MsStallings,

Hi Chrstina,

Thank you for your thoughts on this subject!

As I stated above to Sam, if the charge was nominal, I could swallow it, without an issue. I think hotels, in their scramble to capture every last dime of revenue they possibly can, in these tough economic times, are not “seeing the forest through the trees!!”

Your idea of leveraging sponsorship opportunities is an interesting and compelling concept. I like it! Hey Hoteliers, what do you think? Let’s hear your feedback, please!

All the best,

@michaelmccurry

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