Maintaining a HSIA & Wi-Fi Business Model
By Michael DiLeva Executive Vice President, The IDT Group | January 27, 2012
High-Speed Internet Access has arguably been the single most contentious technological addition to the hospitality industry since the advent of the Property Management System. It's hard to imagine something so beneficial (faster Web access, easier access to e-mail, etc.) creating such a varied reaction and in the process destroying nearly billions in venture capital (and more than a few careers) along the way. But as anyone who is even remotely associated with the hospitality industry can attest to the fact that broadband has been just that - a lightning rod for controversy and debate.
As an amenity or service, high-speed access has truly "crossed the chasm" from "nice to have" to a common requirement of business and leisure travelers alike. Compounding the challenges resulting from the wide rates of adoption of HSIA is that many brands - from luxury operations to budget properties - are now offering the service for free. This obviously makes it difficult to preserve the de facto standard of the $9.95 per day business model. So now that all of the dust has settled and the drama has played out, hoteliers worldwide are left wondering - is there an ROI?
"Be not the first by whom the new are tried, nor yet the last to lay the old aside." - Alexander Pope
Before looking at what can be calculated relative to ROI, it's necessary to determine what exactly the "I" - investment - is for properties that have deployed high-speed. One way to do this is to classify properties not just by the technologies they deployed, but in terms of when they deployed HSIA since that timing may influence how they view high-speed moving forward. Geoffrey Moore coined "crossing the chasm" in his now-famous book of the same name as an expression of when products cross the divisions in the Technology Adoption Lifecycle, a commonly accepted high-tech marketing model. Applying that model to high-speed can provide some interesting insights into the possible barriers some properties may be hitting - both financial and psychological - as they ponder the broadband business model moving forward.
For nearly 50 years since it was first introduced, the original Technology Adoption Lifecycle model has played out relative to the market acceptance of hundreds of new products and technologies, and hospitality HSIA is certainly no exception. Hoteliers on the left side of the bell curve are known as the "innovators" and "early adopters." These properties are the ones that endured the difficulty of poor project management from start-up providers unfamiliar with enterprise deployments of production-ready solutions, immature technologies, including some that actually overheated to the point of nearly catching fire under the desk, and a consumer population that had not yet generated the critical mass of broadband demand. (Yes, there was a time when most travelers did not have Ethernet cards, let alone wireless cards).
Worst of all, as the early providers imploded, these properties were left with a hodge-podge of technologies, questions as to who owned the equipment (the property, a bankruptcy court, etc.) and an inability to upgrade such systems to make them workable once the critical mass of demand actually emerged. These properties, while seemingly having first mover advantage, actually experienced the opposite and have been left with a negative view of HSIA due to not only the early pains that they endured, but the fact that they've had to go back and reinvest in new infrastructure as well as expend time in vendor selection, technology evaluation and business interruption during de-install/redeployment.