To charge or not charge for HSIA, that is the question. The time is very near when hotels will be forced to purchase a lot more bandwidth from their Internet providers, even though competition will require them to offer WiFi to guests for free, or on a tiered-fee system. While WiFi service might be free for a basic level of use, like e-mail and casual Internet browsing, fees will rise in increments for higher levels of data use, especially for video streaming.

Travelers, in general, hate hotel fees. It’s much the like the airlines, charging the passengers for all sorts of things, and looking to grab every last cent from each service added. You need to make sure your price and your product offerings are clearly spelled out. Those annoying airline fees, for example, are widely disliked especially when, with no advance notice, you get hit for the “oh by the way” fuel surcharge, extra taxes, carry-on baggage fees, etc.

In general, business travelers seem to have two reactions. Most feel the hotel room WiFi experience is deteriorating, regardless of whether the hotel charges for the service or bundles it as part of a package. True road warriors know there are other options for ensuring good WiFi service on the road that don’t include paying hotels any fees.

One way around these outrageous fees and increasingly slow response times in hotel HSIA networks is for the road warrior to carry his or her own mobile broadband, via a 4G USB modem from a mobile vendor, at a cost of about $50 a month. It takes only a few nights’ saved charges to pay for this better, more flexible service. The new 4G mobile hot spots are extremely fast, and the guest will have access anywhere their vendor of choice has service. An increasingly popular way for road warrior guests to create personal solutions is to use one of the newer 4G-enabled mobile phones, allowing you can “tether” your smartphone and use it as a wireless hot spot for up to five devices—for only $20 a month more than the guest’s basic monthly mobile phone bill.

The basic tone throughout the industry, as 4G mobile phones proliferate, will be to use these mobile phones as personal WiFi hot spots. One point to note is that if guests are using a 3G smartphone as their hot spot, their other connected wireless devices, especially iPads, will suffer from much slower speeds. So speed of service will become both a qualifier for some guests and a requirement for properties to compete.

Cellular service providers are also being hit with major strains on their systems, from the data-heavy demands of smartphones and other WiFi-enabled personal devices, which have quickly changed the economics of the industry. After the first wave of WiFi-enabled smartphones hit, wireless providers began revising the way they billed the customer’s account for use, in some cases instituting tiered-fee systems based on monthly data consumption. This restriction on use of data-rich streaming will favor those hotels charging a reasonable fee for WiFi service without data caps.

If more hotels do upgrade their WiFi services and put in place a tiered-fee system, depending on which bandwidth level customers decide they need, the hotels must do so carefully. Many guests already react to existing fees, often $14.99 a day for basic Internet service in a $300-a-night room or $5 for a bottle of water, as an outrage. Business travelers have a lot more choices among hotels than among airlines and can be a lot more exacting about paying an extra fee, or finding another property without such fees.

In many hotels I’ve stayed at, the WiFi speeds are close to dial-up intolerably slow speeds, even at 7 a.m., when speeds should be near their fastest. I wouldn’t mind spending a reasonable amount for reliable, fast speed HSIA. However, if there are multiple-tier WiFi speeds, I can’t help but wonder if the free or lower-cost WiFi will be so poor the free tier would be useless?

Are hotel fees rational? Sure, hoteliers have many ongoing costs for bandwidth and infrastructure, the MRC for the bandwidth, even employee time for helping guests get connected. The day has come where a vast majority of the traveling public won’t check into a hotel without Internet access. It’s like checking into a hotel without a bathtub or shower. One of the first questions a guest asks during a reservation is “Do you have Internet access?” The next question is, “Is there a cost for the Internet?” When booking a room online the first area the guest is interested in is location. The second area is the availability of HSIA.

No-one needs to be reminded a hotel room not rented tonight can’t be put on the shelf for a later sale. An empty roomnight is lost revenue. A lost room night is a perishable product. Overcharging for HSIA will reduce occupancy. Remember the lesson we learned so well from overcharging for telephone service, driving most all guests to abandon use of our expensive switches. Let’s not—as an industry or as individuals—make the identical mistake again: not learning from the past.

Les Spielman is CEO of Hospitality Automation Consultants Ltd. (HACL), an independent hospitality consulting firm. With more than 30 years of experience in the lodging business, he provides assistance with automation tasks on a personalized basis. Hospitality Automation Consultants Ltd. has successfully completed more than 3,200 consulting projects throughout the world. His practice is global. Contact Les at les@hacl.net or 818-763-4449.

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