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How Hotels May Charge You For Internet in the Near Future

May 7, 2013 at 5:34 PM | by | ()

With the release last week of our 2013 Hotel WiFi report along with our subsequent report on hotel network speeds, we were feeling pretty good about the status of hotel WiFi. After all, 64 percent of hotel brands have free WiFi and even when you did have to pay for it, you were at least getting your money's worth (i.e. a $25 resort fee at the Cosmopolitan Las Vegas yielded blazing fast WiFi speeds).

But thanks to this recent article in the NY Times, we're not feeling so upbeat anymore.

The article highlighted the changing nature of in-room entertainment. No longer do guests look for the hotel to supply them with in-room entertainment (TV and movies); guests instead bring their own in the form of laptops, smartphones and tablets loaded with streaming entertainment subscriptions like Hulu and Netflix.

So the next logical step here is strengthening the WiFi networks for guests so they can actually access all their entertainment, right? Not necessarily. First, hotels are going to make you pay for bandwidth to do all of this streaming and then they are going to see where else they can charge you while sitting in a hotel room you already paid for. Here's what stood out for us:

Bandwidth capacity at many Marriott International hotels will need to be increased to support these services, an expense Mr. C. Scott Hansen, [director of guest technology for Marriott International] said would be offset by guests’ purchases of Internet access, commissions paid by services like Netflix for signing up new members and advertising revenue from companies that could use the TV or guest’s laptop or tablet screen for messages.

So not only will internet not be totally free at bigger hotel brands like Marriott, you could also be facing some unwanted ads on your personal computer or tablet and you'll be giving the hotel a commission if you sign up for a service like Netflix during your stay. Sheesh. Do you want to try to make money every time we flush the toilet, too?

For now, your hotel internet options are still pretty easy to understand--either it's free or you pay for it. But we can't say for sure how much longer it will remain this simple. Could right now be as good as it gets for Hotel WiFi? Quite possibly.

[Photo: HotelChatter]

Archived Comments:

Don't Agree

I take the opposite view, maybe because I used to work in hotels.  (Two of the positions I held were Income Auditor and Revenue Manager.  That meant I knew exactly how much profit the hotel made off of each occupied room.)  The cost to provide enough bandwidth for an entire hotel is significant.  I don't find it unreasonable for hotels to seek methods that cover the cost of providing an amenity.

I know it was hyperbole; but, the toilet flushing remark is rather ridiculous.

I agree with the first comment

As an operator, I know it takes (sometimes a lot of) money to provide bandwidth and internet, cable and other media services throughout a hotel. When you pay for a room you are paying for the real estate. The hotel has every right to charge for bandwidth as an amenity. The guest doesn't have to pay for it if he doesn't use it.

Charging for more bandwidth...

Is totally acceptable especially if someone is doing a lot of heavy duty streaming or downloading. (Although I hope the hotel would have a basic "free" option as well.) But it doesn't concern you that hotels might start allowing ads to pop up via messages oin your computer or laptop? That was the bit that had me most worried.

Airlines are doing this too!

I flew Finnish Air the other week and they were testing out their new wifi onboard. It charged you based on your megabyte usage. Uh, I hate the direction I see this all going. I thought it would all become complimentary as we went forward, but here we are, counting nickels and dimes.

Good Comments

Thanks for everyone for replying to my comment.  I understand the point-of-view that wifi should be robust and free...I just don't happen to agree with that position.  It's a huge expense for the hotel, so it makes sense to try to recover the cost.

Juliana: For me, if a hotel offers free internet, I think a few ads are acceptable if they aren't obnoxious.  For example, one pop-up ad when you log into the hotel system is okay; an ad every time you visit a new webpage is not.  Similarly, having a link on the login page to Netflix that earns the hotel a commission isn't a big deal.

That said, if the hotel is charging for internet access, there should never be any ads or pop-ups.  It's a bit like YouTube.  It's free because they force you to watch ads or have those annoying pop-ups at the bottom of each video.

Let the customer decide

I think eventually it will be the customer that decides. If we deem it fair for the customer to pay for all of his broadband usage - then it has to be that the hotels will actually be transparent about what they offer. Let the guest know up front what download, upload speed and latency, what data cap you are offering. Make it transparent if the connection in the room the farthest from the lobby is as good as in the lobby.
Then the guests can decide if they are willing to pay for what you are offering.

But I fear it will be more like today. Everybody yells "We have free WiFi" but the speeds are terrible. And the others say "We have WiFi" are charge 25$ a night. That's what I pay for my 100Mbit cable a month.

Either way - it's going to be interesting.