Wi-Fi fees drag hotel satisfaction down

[Ned]

There's a new article on CNN entitled, "Wi-Fi fees drag hotel satisfaction down." I can sure relate to that.

One item in particular -- Internet costs and fees -- is pressing some guests' buttons, churning up "resentment, frustration and anger," says Stuart Greif, a J.D. Power vice president. "At the luxury level, where they're paying for a lot more, there's a feeling you should be giving more freebies, like Internet Wi-Fi, which many lower priced hotels offer for free."

The anger is rooted in this cultural shift: We're at a tipping point where hotel guests value Internet access as they would a bed and hot water, says Greif. "You can't live without it."

Personally, I think that's true. Many travelers I hear from, complain about paying extra for Internet at the luxury hotel brands of Hilton, Starwood, Sofitel, Marriott and Four Seasons, to name a few.

In the article, Joe McInerney of the American Hotel & Lodging Association is quoted as saying, "It is expensive, and somebody has to pay for it." He further stated that high-end hotels aren't able to add another $15 or $20 to their room rates, which is why they charge the fees, then follows up with the statement, "If you're not going to use it, then why should you pay for it?"

Some say you can't argue, with the statement "If you're not going to use it, then why should you pay for it?" I don't buy that. Many don't watch TV at these hotels, but I don't see anyone unbundling TV from the base price of the room. Many don't use the shampoos and soaps that come in hotel rooms, but try getting a refund for the items you don't use. Many travelers believe in conservation and request no new towels and wash cloths for several days. That saves on the wear and tear, helping the linens last longer before they need replacement, as well as the cost to clean and dry them, yet hotel guests who have their linens replaced daily don't pay extra, and those who use them for a few days, don't get anything off their daily charge.

In other words, there are many things which many hotel guests don't use in a room (I know you can think of more examples.) but they are bundled into the price of the room. So why not bundle the Internet?

Well McInerney also said that high-end hotels aren't able to add another $15 or $20 to their room rates, which is why they charge the fees. I don't buy that for a second. I think it's insulting that McInerney thinks the traveling public is so stupid as to believe that nonsense, especially in light of the survey.

It's pretty simple psychological arithmetic to me.

A favorite Hampton Inn of mine is charging $179/night this summer for a 1 King Bed Study with Balcony (Nonsmoking) (Hampton Inns include breakfast in the cost of the room) in one of the Los Angeles Beach Communities, in a location that's just a 15-20 minute walk, or 5 minute drive to the beach. Internet access in the room is included.

Then there is the Beverly Hilton, which is charging $390 for their King Deluxe room with Balcony (includes breakfast) for the same dates this summer. This hotel is within walking distance of Rodeo Drive. They charge $9.95/day for Internet access in the room.

Let's assume for a minute, it actually costs Hilton $10/day for Internet access. If they charge $400 per day for the room instead of $390, and offer free Internet, is any guest going to notice the 2.5%, $10 difference? Possibly a few, a very few. For McInerney to infer bundling in the Internet fee to the room rate would seriously hurt sales is ridiculous, in my opinion.

Then there is McInterney's rate quote for Internet, $15-$20/day backed up by Don O'Neal, a veteran hotel consultant for Internet infrastructure. who stated a line capable of delivering 100 megabits of data per second can cost in the range of $3,000 to $4,000 per month.

I don't know where O'Neal is getting his information, but if some hotel is paying him for that info, I'd like to let the hotel know he doesn't know what he's talking about.

I just checked Comcast Corporation's rates for business class lines. Their top of the line "Deluxe 100" business plan offering an Internet speed of 100Mbps/10Mbps, the speed priced by O'Neal, goes for $370/month, just 12.3% of the low end monthly cost quoted by O'Neal.

If we assume a 200 room hotel (8 floors with 25 rooms per floor) to do a bit of infrastructure costing to provide Internet access, Cisco WAPs on each floor (probably 6), a controller, a switch/floor, cabling to WAPs, fiber cabling between floors, and $20,000 for contingency, you come up with about $100,000.

Now let's assume only 50% (100) of the rooms will be continuously filled and using Internet. If we're looking for a 2 year payoff, that's $100,000 / 730 days = $137/day revenue needed for the payoff. Now assuming 100 rooms are filled that's $1.37/day for a 2 year infrastructure payoff.

Now if we use two 100Mbps Internet lines (overkill) for the rooms that's $740/month. That comes out to $25/day for the Internet access. For 100 rooms, that comes out to $0.25/room/day.

Add that to the infrastructure costs, for the first two years, that's a cost of $1.62/day for each room for Internet access. Now we've got to have a maintenance charge in there and a customer assistance charge. A $20,000/year cost of maintenance (service and parts) should do it, and a yearly cost of $1,200/year for over the phone guest tech support will cover that. That adds about $0.58 per day.

That now totals $2.20/day for each room for Internet access.

If it's true, as McInterney's said the luxury hotels need to charge $15-$20/day for Internet, I can only say that's highway robbery.

Just think, even while paying off the infrastructure, at $15/day the 200 room hotel can make a profit of $12.80 per day. Multiply that by 100 rooms for 365 days you get, $467,200 per year. After the first two years, you've paid off the system. The profit then is $517,205 per year. As I said, "highway robbery."

Internet access should be bundled into the price of the room and should add less than $5.00/day to that cost. Even at that modest increase, the costs of the system are easily paid off, more than enough funds can be put aside for maintenance, parts replacement, support, and operating costs, and it will still increase the profitability of the room.

Let me know if my math is off please.

[susanliber]

What I cannot understand is why the more upscale hotels charge for internet access but the lower end hotels do not? If it really does cost that much, how do the less expensive hotels afford it and not the higher end ones.

[AaronK]

This is the reason I rarely stay at higher end hotels.

I did just stay at a Sheraton Suites in Houston. Apparently, Starwood has a program where if you decline housekeeping service, you receive 500 bonus points per night.

[Ned]

Originally Posted by susanliber

What I cannot understand is why the more upscale hotels charge for internet access but the lower end hotels do not? If it really does cost that much, how do the less expensive hotels afford it and not the higher end ones.

Unless there is a flaw in my math, Internet should cost no more than about $2.20 or so per day. That's how the less expensive hotels afford it, and that means the expensive hotels are using the fee like the airlines are using baggage fees, though the hotels started doing it first.

[Ned]

Originally Posted by AaronK

This is the reason I rarely stay at higher end hotels.

I did just stay at a Sheraton Suites in Houston. Apparently, Starwood has a program where if you decline housekeeping service, you receive 500 bonus points per night.

If you're gold Hilton Honors or higher, they don't charge for Internet access.

As to Starwood, the problem with the "decline housekeeping service" for me is that it's all or nothing. When you decline housekeeping, it means your room will be skipped by housekeeping all together. They don't come into your room at all. The bathroom isn't cleaned, no supplies are replenished in your room, so for coffee addicts (not me), when you're out, that's it, etc. No more soap or shampoo either. (I believe you can ask them to drop off supplies, however.) Starwood is really helping their bottom line if many take up the offer of a $5 gift card at participating food and beverage outlets within the hotel, or 500 points, as that's a drop in the bucket compared to the time costs and materials of cleaning a room.

I reuse my towels for a few days, but I want my bathroom cleaned, since they don't give you the tools to clean it yourself, etc.

[tdew]

I have no problem reusing towels as long as there is is adequate space to hang them so they'll dry before they are needed again, but do want the beds made each day.

As to internet, I think it's mostly those on business accounts who can use the higher end of the different brands and not be bothered by the cost of internet access. They aren't paying for it anyway, the company is.

I'm just back from my road trip (6,500 miles) and have changed my opinion about Springhill Suites. The one I stayed in previously in PA seems to have been an exception. All those we visited this time were lovely. There are little differences between them, but they suited us well.

We also stayed at the Best Western Premier at the Grand Canyon and the Best Western Plus at Bryce Canyon. Both were well done, but the Bryce Canyon hotel was much nicer than the one at the Grand Canyon. I don't know how the ratings are determined in the Best Western chain, but the Plus hotel and Premier should have been reversed in our opinion.

One more place that we stayed overnight was the last of the Wig Wam hotels from years ago. We'd already stayed at the ones in CA and AZ - so this time we made a stop in Cave City, KY. The kids loved it and we did too.

[Ned]

Welcome back. That's good to hear about Springhill Suites. I've not had much luck with them and avoid them these days. Maybe they're an option again.

I haven't a clue how Best Western rates their properties. I avoid them like the plague. They fooled me too many times.

[tdew]

I have used the Best Westerns in Europe many times with good results, but not much in the US (after some not great places,) but when you are out in the middle of nowhere, often that's the only option with at least some level of oversight.

Years and years ago, my family used to travel by the AAA book, but though I still get their maps and books, I don't rely on them for hotels/motels.

As for the Springhill Suites - we were looking for a room for 5 each night, but it's not as bad as that sounds. Most nights it was just a quick swim and then to sleep.
Springhill always had a room with 2 queen beds and a sleeper sofa. The grandson who is 12 slept there and my daughter and I shared the other beds with the little girls (2 and 4) Marriott seems to have been building these all over the country in recent years.

[Ned]

I use the AAA for maps a little bit, but mostly for the AAA books which have lots of good touring information. I, of course, use them for towing, and road service too. I've been a member for 30 years.

Originally Posted by tdew

I have used the Best Westerns in Europe many times with good results, but not much in the US (after some not great places,) but when you are out in the middle of nowhere, often that's the only option with at least some level of oversight.

Years and years ago, my family used to travel by the AAA book, but though I still get their maps and books, I don't rely on them for hotels/motels.

As for the Springhill Suites - we were looking for a room for 5 each night, but it's not as bad as that sounds. Most nights it was just a quick swim and then to sleep.
Springhill always had a room with 2 queen beds and a sleeper sofa. The grandson who is 12 slept there and my daughter and I shared the other beds with the little girls (2 and 4) Marriott seems to have been building these all over the country in recent years.

[bodega]

Having sold hotels, worldwide, for close to 3 decades, I have become less and less infatuated in high end hotels as the years have gone by. Yes, there are some that are great, but I have found so many of the smaller hotels to have improved to compete and offer more that recommending the high end ones get more difficult.

As for Best Western, it is difficult to recommend them across the board, unlike Hamtpon Inns, as they are independently owned. We have stayed in some really excellent Best Westerns and then there was the one in Rawlins, WY that still gives me chills, but it was the best accommodation in the area at the time. I have found some great BW's in Europe. We stayed at serveral ourselves and I have to mention the BW Butterfly in Zermatt as that one was just wonderful.