There is nothing that irritates a hotel guest more than having to pay for Internet service and herein lies a significant strategic competitive advantage for small luxury hotels.

Go ahead and do a Google Search for "What travelers think about hotel WiFi?" Then read a couple of pages of results and you'll see how universally despised hotel Internet access fees are. USA Today, CNN, MSNBC, J. D. Powers, Hotels.com, The Daily Mail (and the list goes on) are all reporting on it. And bloggers are being merciless on hotels in their condemnation of Internet charges.

J. D. Powers just released its 2010 North American Hotel Guest Satisfaction Study which shows the number one hotel amenity is wireless Internet access. And WiFi use is on the rise – over three-quarters (77%) of respondents say they access the Internet through a WiFi device – up from just over half (55%) three years ago. And they don't just want access they want high speed access – reliable quality service.

What I found most interesting in the study is that overall customer satisfaction of hotels that offer free Internet access is more than one full point higher than hotels that charge for it (8.15 vs.7.04).

In other words, Luxury and Upscale chain hotels – those properties notorious for charging for Internet access – are willing to throw customer satisfaction under the bus to keep this revenue stream. The majority of hotels in other categories offer free WiFi. And now that even McDonald's offers free WiFi it's no wonder hotel guests feel it should be free.

In a BBC survey of more than 27,000 adults across 26 countries, close to four in five people believe that access to the Internet is a "fundamental right." And by charging for Internet access, luxury chain hotels are inhibiting people from enjoying that fundamental right.

It's easy to count the amount of money a hotel generates as a result of charging for Internet access. But it is more difficult to measure the amount of lost revenue as a result of people not booking because it is not free. Or those choosing to eat at a nearby Starbucks, McDonalds or the local deli because they offer free WiFi.

The other thing that can't be measured is the damage these charges can do to a hotel's brand. All you have to do is look though negative comments on TripAdvisor.  A quick check of several luxury chain hotels on TripAdvisor turned up the following comments – all made this year.

• "Another disappointment was that WiFi was an additional charge. For this class of hotel, one would expect it to be included."
• "I would probably prefer a Holiday Inn or equivalent where you can get free wifi, free parking, nice pool, free breakfast, and convenience for $100 OR LESS A NIGHT."
• "WiFi was expensive and we had to pay for the parking as well. Why don't they include them in the room price?"
• "All the extras in the hotel are very pricy and WiFi is an extra USD 15 per day."
• "Also like many have said on here, it's crazy to charge $15 for WiFi when the room and everything else inside the hotel costs so much."
• Hotel guests clearly despise being charged for Internet access. It's the number one complaint among 1,815 travelers recently surveyed by Hotels.com – 75% cited this as an issue.

Free WiFi is an emotional issue for a majority of travelers. Expect this issue to intensify as more and more people switch from regular cell phones to smart phones. The more they become used to universal Internet access the more they will resent hotels charging for it.

For small luxury hotel marketing folk the implications are clear -

to increase customer satisfaction you need to provide high quality, in-room Internet access for free.

And when you do you'll have a very strong competitive advantage over the large, branded, chain luxury hotels. Market this highly charged, emotional issue like crazy while you can. Sooner or later those large competitors will have to offer free Internet service.

How long do you think it will be before all WiFi is free?  Share your thoughts – post a comment.

Safe travels – Madigan Pratt

Madigan Pratt is Managing Director of Madigan Pratt & Associates, Inc., an innovative CRM company dedicated to acquiring and retaining profitable customers for luxury hotels. Prior to founding MP&A in New York two decades ago he held senior management positions overseeing marketing communications for several Fortune 500 companies.

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