By Will Sturgeon, 9 March 2007 08:00
COMMENT
A lack of knowledge and resources across the hotel industry means many hoteliers are turning to technology partners and service providers to install and manage their guest wi-fi access.
And while service providers are naturally chasing profits many critics of wi-fi pricing suggest the hotels' relationships with these companies are to blame for 'rip-off' wi-fi prices.
But it is far from being so clear-cut.
Some of the most expensive wi-fi charges are actually imposed by hotels that manage their own networks and billing, according to James Saunders, marketing director for hotspot provider and wholesaler The Cloud. His company works with a number European hotels including some in the Best Western chain.
Unfair wi-fi...
Don't just take our word for it, read what the editor of The Good Hotel Guide had to say on the matter by clicking here.
Saunders told silicon.com: "Many hotels don't want to get involved and want to pass the whole thing on to somebody else to install and manage."
For those hotels still scrambling to understand the need to offer wi-fi - and which lack the resources, know-how or even the inclination to provide it themselves - the partnering route is an effective way to get up to speed quickly.
However, some service providers have been accused of charging over the odds for internet access at the hotels they work with.
One company whose pricing has come in for criticism from silicon.com readers is SwissCom, a major partner of many European hotels.
silicon.com reader Trevor Lee said: "Beware hotels in Europe partnering with SwissCom to provide wi-fi." Lee cited charges of 21 per hour on his travels, adding: "Now that is a rip-off."
A spokesman for SwissCom told silicon.com: "Selecting a professional service provider certainly remains the preferred option for most hotels."
As such those hotels - and their customers - are at the mercy of the service providers' charges.
However, addressing accusations of overcharging, the SwissCom spokesman claimed the company has a "fair value for money policy", where higher charges are justified by a perceived high quality of service among its users.
He said: "We are convinced users are able to tell the difference between standard and premium internet and ready to pay for the difference."
The problem is further exacerbated when a profit-sharing agreement exists which sees the hotel and service provider both add a mark-up to the cost of providing the service.
With regards to whether hotels are ripping off their customers, this is perhaps the least defensible arrangement when the hotel has done nothing to install or manage the network but still insists on making money in return for little or no investment in its customers.
Furthermore, many hotels are also imposing high charges on customers even when they own and manage their own networks and have no profit-sharing agreement in place.
These hotels could choose to swallow the costs - comparable to around 10 per room per month - in return for the tangible and intangible benefits of greater customer satisfaction. But some are charging guests more than £50 for a few hours of internet access.
It's not a situation that paints those hotels charging over the odds in a good light. Service providers have to make money from wi-fi access - and many still manage to do so while undercutting hotels. The latter could simply approach provision as a value-add but choose not to.
If you want to give your support to silicon.com's Fair Wi-fi campaign, add your name to our petition.
Comments
There are 4 comments. Join the discussion
1. Paul Tomlinson
In answer to the question - yes. I had dinner a couple of weeks ago with the manager of the hotel I have been staying in for 6 months. Their wi-fi is provided by a well known wi-fi provder and charge quite a lot (enough for me to refuse to use it). However I commented to the manager how expensive it was, he said that the hotel makes practically nothing from it, it all goes to the provider.
2. anonymous
Recently found a way of reducing the cost in hotels of the internet connection:
4 of us at a particular hotel asked for adjoining rooms - hard work but ended up with a two by two and two across the hall arrangement. This meant we could use one connection and by means of netgears portable WifI hub share across the floor.
This had two bonuses:
4 into 1 usage
For some reason the hub maintained the link for the 5 days we were there with a charge for only one day???
Nice....
3. anonymous
I do not believe that service providers are the cause of higher Wi-Fi access. Why not?
Hoteliers negotiate the deals with service providers and make the choices on whether to charge and how much to charge. If a service provider is dictating this then the service provider chosen, was chosen in error.
That said, the cost of maintenance, monitoring and service levels vary by service provider and some may charge a bit more per room per month than another. But again that is the choice of the hotelier whether to pay more for the service or not. In a fixed fee model the expense is known, in a revenue share model there may be little or no expense .
Bottom line Wi-Fi is a required service and hoteliers should be reasonable about what is charged or they will have to deal with what happened to Telephone Revenues deteriorated due to cell phone use! No the industry is going to have to compete against GSM, EVDO, WIMax, etc and the customer may not even have to use the hotels Wi-Fi service. If the industry prices commodity type services reasonably then revenues will remain for the long term, if the "make a quick buck " approach is taken at the expense of the customer, the customer will always win in the long term and revenues will once again be lost.
4. Symon Chalk
I do a lot of IT work for hotels and restaurants and am constantly amazed at the appalling standards of access point installations. At one hotel, in my home county, a well-known telecommunications company who is in partnership with the local council offered to install wireless networking for a reasonable (albeit discounted) fee. The hotel owner agreed and was walked through the details of how much he'd make from selling the access cards. He was happy with the deal so the provider went ahead with installation.
I was on-site a few days after the service went live and couldn't believe the "system" that had been installed. A WAP and firewall, connected to the hotels existing broadband service, had been propped next to the photocopier in the back-office, providing coverage in the reception area and, er, that was it... I pointed out to the hotel owner that the installation was unprofessional and virtually useless and, more importantly, was using his broadband connection, he shrugged and said he was happy with the money he was making off selling the cards, which he had to buy in the first place! All in all the problem is a combination of poor standards of service by the providers and a lack of interest (profit aside) by the hotel owners/managers, which is tolerated by far too many people - if no-one complains, there and then to the hotel, then nothing will ever change.