March 18, 2011 10:01 pm

Wi-fi too high?

For frequent travellers, it has become one of the greatest bugbears: you check in to a hotel after a long flight, unpack, sit on the bed, unfold your laptop to check e-mails and then up it pops: an internet page demanding your name, room number and, more importantly, payment details. While we have grown used to free wireless internet access in coffee shops, airports, railway stations and even parks, many hotels persist in charging.

“Should we be paying extra for water and toilets too? Of course not!” says Sinclair Beecham, owner of the Hoxton Hotel in London. “The way I look at it, internet access is as necessary as a sink and a bed to sleep on. My guests can’t function without it.”

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Wi-fi at the Hoxton is, as you might have gathered, free, but in a brief survey of other leading hotels, we found guests being charged up to £26 for a day’s internet use (at the Ritz in London). Munich’s Bayerischer Hof charges €27, and le Bristol in Paris €21, but it’s not simply a case of the smartest hotels charging the most. The budget Holiday Inn Express London City charges £12.95, and the Travelodge chain charges £10, while the five-star Shangri-La in Hong Kong offers wi-fi for nothing, as do several other renowned luxury properties. Neither is it the case that all properties owned by one hotel chain charge the same: the W in London charges £15.95, for example, but the W San Francisco asks only $14.95.

So how do hotels justify the charges? Many insist they are unavoidable given the expense of installing and running the necessary equipment.

“There are a lot of costs,” says Chris Gabaldon, chief of sales and marketing at Ritz-Carlton. “Luxury consumers demand more and more video streaming, downloads of significant files, high-resolution images. They also want to upload files, which requires bandwidth. They have iPads, laptops and phones all going at the same time. It’s not cheap to keep up with. It’s one thing to check e-mail but this is another level of service.”

Nevertheless, the fact remains that for many groups the internet is a major revenue driver, especially after the loss of lucrative room phone-calls thanks to the advent of mobile phones. Another theory is that hotels resist free internet in order to ensure guests still use pay-per-view movie channels, rather than downloading films to their laptop for free.

Gabaldon declines to comment on how much Ritz-Carlton makes from the internet, but offers a pragmatic explanation of why the group charges. “We’re a business,” he says. “We provide a lot of services and we should make a profit; we’re entitled to. The charges only exist because the market bears it.”

Another factor in internet charges is outsourcing. Many hotels, particularly in Europe, contract outside providers for their internet equipment and connection, who control the costs. Swisscom, for example, provides services for 2,300 hotels globally. The Geneva-based company, launched in 2002, has several packages for hotels, the most prevalent of which is a three-year contract where Swisscom operates the network infrastructure, charges the user fees – typically €17-€22 – and collects the revenue before sharing it with the hotel.

Arndt Mielisch, Swisscom’s communications director, also defends the cost of running high-speed internet: “It’s not a one-off job, good for the next five years. It’s ongoing,” he says. “More and more guests are live-streaming. A year ago people streamed an average 100MB of data on their Smartphones in 24 hours. Now, it’s 230MB. It looks like the demand for bandwidth is continuing to explode over the next few years.”

But as internet use rises, so too does resentment against the charges to use it.

“Ten pounds to £25 a day is a lot of money if you’re travelling regularly and we’re starting to see people making decisions based on it,” says Martin Raymond, co-founder of the Future Laboratory, a trends consultancy. “It’s one of the main things mentioned in reviews on TripAdvisor.”

Back at the Hoxton Hotel, Beecham gives short shrift to explanations about costs, outsourcing and so on. “It costs me £300 a month to have internet in my hotel servicing 200 rooms,” he says. “That’s five pence per room per night, and I’ve got very fast access. It costs quite a lot to put the kit in the room, but then it cost quite a lot to put flushing toilets in, too.”

The cost of wifi access in hotels

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