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, 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.

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