Hotel Wi-Fi: Balancing Budget & Bandwidth

How can the hospitality industry meet the unquenchable guest needs for bandwidth while controlling costs and in what ways can it affect the complete guest experience

By Craig Ziegler President, SuiteLinq, Inc. | December 23, 2012

Ten to fifteen years ago, a hotel's need for WiFi connectivity was quite simply the ability to satisfy the guests' needs for limited data and voice transfer. Today, when it comes to bandwidth, it seems that people just cannot get enough. Different technologies are emerging and society is becoming more tech-wise, creating a major stress point on bandwidth allocation. For hotels with legacy WiFi systems, keeping up with this guest demand for bandwidth is becoming more and more difficult. Couple that issue with the guests' need to video chat; stream music and video; download photos; and share network files; and the solution becomes nearly impossible without significant effort resulting in added cost that somehow must be covered.

TripAdvisor recently published results of a survey of more than 1,000 US-based travelers in addition to 600+ hotel professionals. Each group was asked which amenities were both most and least important to them when traveling. WiFi Internet led the list surpassing complimentary breakfast, loyalty programs and airport shuttle service. Among those WiFi users, 65% said they have used free WiFi in a lobby or hotel common area to avoid in-room charges and 93% of hotel professionals surveyed said they offer "some form of free WiFi to their guests".

As Internet use continues to rise dramatically, travelers consider that it is not only necessary for hotels to offer WiFi access (whether at a charge or free), but are insistent upon fast and reliable WiFi provisions as well. Unfortunately, according to Tnooz, 60% of travelers in the US, Europe and Australia indicated that they have already experienced poor hotel downloading transmissions because the system was too slow which, as we all know, can be extremely aggravating. Satisfactory Internet encounters also have a dramatic effect on guest allegiance and gratification. Studies report that over 40% of guests say that "their experience with a hotel's Internet service affects their likelihood to return or even stay at another hotel of the same brand." And another study found that more than 80% will not return to hotels in which they have a poor technology experience.

As technology advances and the number of digital devices every guest carries while traveling multiply, a hotel's bandwidth demands increase as well. According to International Data Corporation broadband Internet traffic will double year on year for the foreseeable future. To address the problem, many hotels have been forced to purchase ever increasing amounts of bandwidth by installing additional T1 or DSL from Internet service providers (ISP) without the immediate means to recover the incremental costs from their guests. Smarter and more holistic bandwidth solutions are crucial in the long run. One thing is for certain… the more we have, the more we want. Which poses a new question… how long will the systems of today remain adequate? And, even more important, how do hotels compensate for the requests of today while being proactive to cover the costs for the desires of tomorrow?

While recognizing the challenges regarding hotel bandwidth and insatiable guest needs are not new, there are innovative and creative ways of confronting the situation. Hotels must analyze the metrics regarding costs and return on investment. Do hotels offer a free or a paid program? And, although struggling against all current survey findings, if hotels choose a paid program, will it provide connection at a flat rate (no matter what amount of bandwidth is consumed) or do they opt for a tiered program establishing rates based the on amount of bandwidth utilized. Finally, what other unique ways can hotels embrace to cover the costs associated with society's increasing need for speed?

Charging for internet is not new in the hotel industry. In fact, many properties continue to charge a flat rate for Internet access which can be acceptable providing that either the competitive environment supports that structure or the demand for access is not as important in a specific location. While Internet fees are not novel, according to a survey by hotels.com, 38% of participants disclosed that free WiFi is a "must" when booking a hotel, 35% want to see it offered more, and 31% wish it would become a standard. Therefore, a hotel that charges for WiFi must realize the chance for considerable sacrifices in both hotel bookings as well as customer satisfaction scores.

Choose a Social Network!

The social network you are looking for is not available.

Close

Hotel Newswire Headlines Feed  

Coming up in May 2019...

Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.