WiFi: for free, or not for free? By Bryan Harris Friday, 23rd March 2007

At hotels, self-service literally fills the air - Two schools of thought conflict over selling public access WiFi Internet at hotels: One side says free public WiFi is essential for hotel customers’ convenience. The other side says giving it away is giving away money. A 100-room hotel that keeps half its rooms booked and sells Internet access for a typical rate of $10 per day makes $183,000 in annual access fees. 

According to HotelChatter.com, a hotel industry web site, WiFi for guests is a necessity to keep customers returning: 

"Hotels have finally realized that WiFi is a must-have, something that tops the wish list of many potential guests. But the rush to quickly set-up hotel WiFi networks, coupled with the fact that wireless fidelity is still a fairly new technology, means that consistent wireless internet access, pricing, and service, is not a given across hotel brands, small hotel groups or even from the lobby to your room." 

HotelChatter also blasts the notion of hotels charging guests for WiFi, saying it "certainly gives them a bad rep." 

Hotspot International CEO Louie Miller disagrees. Under the Hotspot business model, guests purchase time cards that they can use to access the hotel’s Internet. His company has grown to include 50 hotels in four countries, mostly on a revenue share model in which Hotspot maintains the systems and splits the sales. 

"If the hotels stopped and think about what they’re giving away, they’re giving away telephony and, potentially, home movies," Miller said. "I don’t think it’s viable that hotels will ever give it away. People have to take into consideration and look at Internet as being the infrastructure for delivering additional services and, if they give it away, they’re giving away other services. For example, I’m sitting in a hotel right now and it costs me $3 to $5 per minute to call the U.S. If they give me the Internet for free, I can hook up Skype and my Bluetooth headset and call the U.S. for two cents per minute." 

But Miller’s math doesn’t phase the Kimpton Hotels chain, a string of mostly four-star hotels across the United States, which leads the pack in Hotel Chatter’s hotel WiFi assessments. Kimpton management disregards the notion that giving away free Internet will put a damper on phonecall or in-room movie sales. "Very few people will download movies," said Andy Furrer, VP, technology, Kimpton Hotels and Restaurants.

"Very few people will carry their Skype phone with them. The business traveler, a guy like me, I’m a technologist, I don’t carry that stuff around with me. And I have a cell phone and that’s way more convenient than booting my laptop and getting my calls for two cents per minute." 

While they have opposite philosophies, one thing Kimpton and Hotspot have in common is the use of Eleven Wireless’ hotel broadband management solutions. The company, which is growing along with the hotel WiFi industry, sees WiFi as a cresting wave, according to founder Josh Friedman. 

"We thought (WiFi) would change everything," Friedman said. "How people use the Internet, how they connected to the Internet. We decided, as business travelers, that there was a great need for WiFi access because they have better economics associated with them, so we deployed these at hotels."

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