HSIA Trending Free

Why do upscale hotels charge $10 or more for use of high-speed Internet access while midscale and some budget hotels offer it for free? “I think most people staying in upper-upscale and luxury resorts fall into any of three categories,” says Mark Haley, The Prism Partnership. “Expense account travel, where their employers pay for it is one model. Another is, they're just rich and don't care; or they're simply an anomaly in that category of hotel.”

Why is there free continental breakfast at a Hampton Inn but not at a Hilton? According to technology-savvy road warrior Haley, “limited-service people are adding value to their product by bundling services upscale people can charge for” — at least for now. He thinks that eventually, HSIA and Wi-Fi will be an amenity, complimentary no matter the segment.

“The trick for the hotel industry will be fulfilling guest expectations of complimentary Wi-Fi without cannibalizing meeting room resale of broadband services,” Haley says. “Meeting planners are not cost-sensitive. They're performance-sensitive. They don't care if it's going to cost $300 day for broadband connection, but it better work the first time up and have reliable throughput.”

On the consumer side, however, even some upscale properties are opting for the complimentary model. “I'd rather have a guest stay overnight and spend $200 for everything than charge a $10 fee to use the Internet,” says Richard Carbone, general manager of the Inn at Harvard in Cambridge, MA. “Everyone needs wireless and has it on their PCs and expects it when they walk in the door. We're owned by Harvard University, 80 percent of our guests are Harvard-related, and all of them want to immediately check their e-mail.”

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