How long will hotels keep charging for Internet connections?

by Charlie Leocha on January 26, 2010


While many of the lower-cost and mid-cost hotels do not charge for Internet connections, the most expensive still are charging for connections to the Web. But the days of Internet access are numbered. The only question is when will the charges be totally eliminated.

Checking a list of hotel charges for Internet service one can see that most lodging establishments offer Web as a free service. But, Crowne Plaza, Doubletree, Embassy Suites, Fairmont*, Four Seasons, Hilton, Hyatt*, Ian Schrager, Intercontinental, Lowes, Marriott, Rennaisance, Ritz-Carleton, Shereton, Sofitel, St. Regis, W Hotels, Westin and Wyndham* all charge around $10 or more per day for access. (* free service for members of their frequent stayer programs)

Conrad by Hilton and Kimpton were the only two upscale hotel brands to offer free high-speed Internet to guests at all of their locations and without restrictions. At the other end of the spectrum, Red Roof Inn, inexplicably, has a deal with T-Mobile that adds $10 a day for web connections unless clients have their own T-Mobile account.

With the falling room rates and occupancy at hotels, business travel negotiators are finding that wrangling free Internet connections as part of their corporate room rate is becoming easier. But normal leisure travelers are discovering that these Web rates are hard to get rid of since they add to to the revenue per room.

Some new upscale properties are bundling the Internet fees into the room rates; others are sticking to maintaining separate charges. However, virtually every hotel expert I find sees Internet fees disappearing in the future. Once occupancy rates rise and business travel begins to grow again, Web access fees will probably become a thing of the past in luxury chains as it is already in most of the budget chains.

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Tagged as: hotels, internet fees, web charges

  • OTC

    At higher-end hotels the people using the Internet are often business travelers that are indiferrent to the costs. Until businesses refuse to pay for these charges for their employees hotels will keep chargining it knowing it’s just going to be another item on an expense report.

  • http://www.bonjourparis.com Karen Fawcett

    You have stepped on my corn. Hotels in the US appear to be getting the picture that business travelers insist on free WiFi or IP connects.

    But – go to Asia, the UK and some Paris hotels – and getting connected is a definite profit center.

    Taj hotels still charge for Internet connections. Some hotels should give you the IP connect AND the computer for FREE. Sorry to rant.

  • dcta

    when will phone charges be totally eliminated? I mean, you pay the hotel for local calls in most cases….

  • Steve Surjaputra

    The problem with including Internet access in the room rate is that people are going to complain because they don’t want to pay for something they’re not going to use.

    If they do want to include it, then they should have two different rates: one with Internet access and one without.

  • http://habaconsulting.blogspot.com Laurel Bailey

    It’s easy to say that High speed internet access should be free in all hotels. From a customer’s perspective, it is highly desireable. However, there is a difficult financial issue behind luxury/larger hotels charging a fee for this amenity. It’s a little disappointing that this article doesn’t delve into the real issue at all.

    Hotels must offer telephone service and high speed internet access. Both are a given. Both are very expensive to purchase, install, and maintain. Telecom used to be a money-maker for hotels. Obviously, that is no longer true. Why would you use the phone in the hotel for local or long distance calls (for an often exhorbitant fee) when you have a cell phone with service for which you already pay a monthly fee?

    Telecom revenue has disappeared, and hotels are required by their brands and customer demand to offer high speed internet access (HSIA). Installing HSIA in a small hotel or motel is fairly inexpensive, because of the small footprint of the hotel (lending itself to wireless) and/or the small number of rooms that need to be wired. For those hotels, the benefit of offering the amenity for free outweighed the burden of the cost of maintaining the technology required to provide the service. At smaller hotels, the “take rate” for HSIA (or the percentage of guests who partake of the service) exceeds 50% of occupied rooms.

    Large, complex hotels must invest hundreds of thousands, some even over a million, dollars to equip their hotels for HSIA. Some of the equipment has a life span of only about 3 years, so almost constant maintenance is required. The ongoing cost is substantial. Hotels that charge for HSIA have a take rate of approximately 35%. It is undoubtably lower because of the fee charged.

    Here are some of the complex issues that exist due to the demand for HSIA today:

    1. There is a real cost associated with providing HSIA, and it will be paid by guests. Should it be paid by all guests (hidden in the room rate); even those who do not need or want the service?
    2. Demand for bandwidth continues to grow. People don’t just check email anymore – they download large files, connect to their offices to do work for hours, and use the internet with things like Slingboxes that gobble bandwidth. Hotel infrastructures have to be continually improved to respond to the demand. Should room rates increase to provide that bandwidth?
    3. More hotels than ever are going into receivership, due to the state of the economy and the travel industry. Should franchisors demand that their suffering owners eat the cost of HSIA?
    4. With more and more customers using wireless cards or smart phones are their primary means of communicating via the internet, does it really make sense to invest more and more money into the hotel’s HSIA infrastructure?

    I travel too, and would like my HSIA for free anywhere I choose to stay. But I understand it’s not that simple. If it’s that important to you as a traveler, make your stay decisions based on hotels that offer HSIA at no cost. Ultimately, that’s what will drive change.

  • http://www.ffocus.org Bruce InCharlotte

    If you’re traveling in your own country, get a WWAN card from AT&T or Verizon. $30 a month for the service and you can connect from ANYWHERE. Hotel, customer sites, even when your plane is in the “penalty box” if the captain will allow electronics to be used. The other day, my daughter surfed on my laptop while I drove I-40 between Knoxville and Little Rock. In the UK, O2 and three.co.uk offer the dongle for free and the service is £10 a month, which also gives you unlimited access to BT hotspots. It’s saved my company over $1000 in hotel wifi charges in the last year.

  • Doug

    To add insult to injury, the internet access offered in some hotels is so slow as to be completely useless. Dialup is a better alternative…although now the hotel gets you with the telephone access charge : )

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  • SpotLight

    Whether traveling on the company expense account or on my nickel, I will not stay at lodging that charges extra for internet services when there is any reasonable alternative. I try to spend the company’s money and mine the same way.

    The suggestion to invest in wireless services of a telephone carrier is a good and often less expensive alternative for the frequent traveler.

  • http://www.tripso.com/author/leocha Charlie Leocha

    Personally, I have a Verizon Internet card. It has been a lifesaver. Cost: about $60 a month. I’m waiting for AT&T to open tethering for the iphone, but then again, AT&T coverage stinks compared to Verizon.

  • http://www.tripso.com/author/ned/ Ned Levi

    Karen is certainly right about Europe and Asia. Like the airlines, they are not looking to bundle up hotel services any time soon, as long as they can keep the fees coming in.

    Here in the US, upper end hotels may start to include Internet in the room charge in the future, but I’ve found that most road warriors don’t really care anymore. They’ve already gone the route suggested by Bruce InCharlotte.

    I’ve got a WWAN card myself. I’ve had it for several years. I got it originally to have Internet access at clients when their connection was out, and while traveling during those long waits we always seem to have, and while in the train traveling in the Northeast (On the Autotrain last year I had service most of the way, and was able to get a lot of work done.). It is a bonus to thumb my nose at the hotel fees for Internet access.

    More and more in train stations, and at the airport I see these cards in use, rather than pay the absurd fees charged for “hotspot” access.

    Bruce is also right about access in Europe.

  • Chris in NC

    I too, ditched Wifi and went with a WWAN card years ago. In fact, I was one of the first customers of WWAN. Initially, the service was somewhat spotty, but in the last 1-2 years, coverage has become almost universal. Granted, speed is still variable, but in most urban areas, it is very fast. Even in the rural areas, you can at least get enough speed that you can check e-mail and access other critical data. As Bruce said, the connection is stable enough that when traveling on the interstate highways, you can stream music or surf continuously without interruption.

    I use an unlimited plan that costs $59.99 + taxes. Its been worth every penny. On the road, I don’t worry about whether the hotel offers Wifi or how reliable it is. The best use of the Wifi card occurred a few months ago when our internet connection in the office went down (when a contractor cut the fiber optic cable by accident), the WWAN card allowed us to continue business as normal.

    @Laurel
    No offense, but your argument of the cost of establishing a network as a justification for the cost doesn’t hold water. Hotel infrastructure should be continuously in order for the hotel to maintain its competitive edge. By the same argument, hotels should not replace carpet, beds, furniture, etc, because they can’t “recoup” the costs. Every business class hotel that I have stayed in, proudly displays the date of the last renovation, and how much it cost (ie “Million Dollar renovation done in 2009!”) on its brochures/internet page. You are right though, hotel that starts losing business to its competitors because of “free WiFi”, will adapt! Also consider that midrange properties like Courtyard by Marriott offer complementary WiFi, whereas full service Marriott’s don’t, so obviously, it must not be THAT expensive!

    @Steve
    You seem to have bought into the “un-bundling” Kool-Aid that the airlines seem to have mastered. I (among many others) do not object to reasonable fees for WiFi access, but when hotels and resorts are charging upwards of $15-25 per day for access, that seems steep. How much of that is covering “overhead” vs pure “profit” will never be known, but I suspect its more on the profit side. By the same argument, what is to stop a hotel from charging you by the towel, frequency of housekeeping service, use of the pool, use of the fitness center, the soap in the room, etc. When I book a hotel, I expect a package, rather than being nickle and dimed.

  • http://www.globepharm.org Michael Anisfeld

    I view Internet access as another utility. In the same way that I do not expect to pay for water (to take a shower), or electricity (to shave), I do not expect, in this day and age, to pay for Internet access. And, yes, it does impact the choice of hotel that I make.

  • Carrie Charney

    I’d love to know why the cheaper hotel brands offer the free wi-fi connection (and breakfast) when the more expensive brands don’t. Even within a brand, where hotels are franchised, there is a difference. The Hilton at Penn Station, Newark, NJ would not allow me, as a gold card guest, free access. (But I did get breakfast.) The Anchorage, AK Hilton had me authorize a charge for it, but the charge automatically came off my bill.

  • http://www.perceptivetravel.com/ Tim L.

    Bruce is right: most business travelers who are peeved about this have bypassed the hotel services completely, just as we all did as soon as cell phones became a far better value than the hotel phones, which now sit there collecting dust. Sorry Laurel, but the “we paid for it so we should be able to charge extra for it” is a flawed argument. The hotel paid for hot water pipes and the means to heat the water too—something that was option a century ago—but that’s long been part of the rate except at $5 guesthouses. Internet is the new hot water and any hotel that doesn’t include it in the rates is going to find it harder and harder to win customers. Like others on here have stated, I refuse to book any hotel that charges for this when I’m on my own dime. There are too many alternatives out there that are more customer-friendly, often right next door.

    If McDonald’s can give it away while charging $1 for a cheeseburger, I think a hotel charging $400 a night can manage it as well.

  • http://www.shorttraveltips.com Vi @ Travel Tips

    Surprisingly it is usually free in cheaper accommodation options like hostels and etc. Are they thinking that if you can pay $100 instead of $30 for a room additional $10 won’t hurt you? May be not, but I am just skipping hotels which charge for internet when l am looking for accommodation.

  • Steve K

    I’m in the Courtyard at Orlando right now. Wireless is free and the bandwidth is so low as to be useless. Paid service is $10/day and is about equal to a 50K modem. (Just barely OK for email/blogs).

    I don’t mind paying for service I can use, but am totally ripped off here. This isn’t the first time that’s happened, and the problem isn’t unique to Marriott.

  • martin

    This thread may be dead now but as a small uk hotel owner I am faced with expensive broadband lines having installed wi-fi and wired access, The problem I am experiencing with the free access that i give are the high banwidth users that have caused me to pay the ISP large overcharges. The way the uk appears to be going is to offer a basic e mail service, limiting the bandwidth, and a business user service with high bandwidth and data amounts downloaded which will be chargeable (but at a fair price) . The level of charge is the difficult thing to peg, get it right and people will think its fair…get it wrong……..

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