Web of wonder - Hotel investment in WiFi and the real benefits
Published on Thu 16 Dec 2010
Fluctuating REVPAR rates across the hospitality industry are making purchasing decisions more challenging for hoteliers, but investments of any size can provide real business benefits.
Wi-Fi is now considered a must-have for many travellers when making their accommodation choice and hotels are expected to have a reliable, fast connection that serves their entire building. The installation of a high quality service comes at a cost for hoteliers but there are ways of making this investment work harder, providing additional revenue and marketing opportunities.
Dean Wilkinson, managing director of Airangel, a specialist in wired and wireless guest internet access, says the savviest hoteliers are making sure their Wi-Fi service is going the extra mile for their business and their guests.
Dean said: “Most hoteliers understand that Wi-Fi provision is a key service requirement, yet don’t embrace the full range of possibilities it presents.
“Increasingly we’re recommending that hoteliers use their portals to build dialogue with customers and strengthen the brand experience. Hoteliers need to make their Wi-Fi investments work harder.”
In recent years, guests’ expectations about their internet service has changed and with the rise in popularity of sites such as BBC iPlayer and 4OD, it’s no longer enough to just cater for them sending emails or reading a news site.
Dean said: “Guests expect a reliable, intelligent connection that allows them to do a variety of things online such as work, watch videos or download music. This requires sufficient bandwidth which comes at a cost.
“However, hoteliers can ensure they get some payback from their investment – whether it’s charging guests for their internet access or through marketing and advertising. There are also ways to make sure your bandwidth is distributed intelligently throughout your users, which can improve efficiency significantly.”
In a competitive market, hoteliers are under increased pressure to consider added extras for guests and advertising a free WiFi service can help to attract vital bookings.
Dean said: “If a P.A. is booking a hotel for a managing director, they will want to know that they are able to check an email or flight details. Charging for activities like this might be the difference between securing or losing the reservation.
“Of course, a hotel will want to advertise that it has free internet access but with that greater awareness comes greater demand, which can put greater strain on the bandwidth – and whether it is free or not, it has to work.
“What we’re seeing increasingly is hoteliers using this as an opportunity to assess their pricing models to their advantage – creating varied models that maximise financial benefit to their business.
In particular, tiered pricing models have become increasingly popular and Airangel has seen a 40 per cent increase in its hotel clients moving to this structure.
Dean said: “As our clients are becoming more digitally aware, they are better placed to develop pricing models that are financially beneficial, not least by driving on-site spend.
“Many of our hotel clients are offering free, unlimited WiFi in their bars and cafes knowing that while guests are in these areas they will spend money on food and drink, such as having a coffee or a sandwich while sending emails.
“It also provides the hotel with a means to attract business from those who aren’t overnight guests, whether it is a local company wanting to hold an impromptu meeting or just passing trade.
“These same hotels are charging for in-room use as their feedback suggests that those using Wi-Fi in bedrooms are less likely to spend elsewhere in the hotel. By using tiered pricing, hotels are directly recouping some of their investment while driving additional revenue elsewhere.
“Hotels can also be clever by using the models to protect their bandwidth, save money and improve efficiency. Hybrid models allow ‘free’ use for a certain amount of time or to a level of data, meaning it would be free to check a Facebook or Twitter account but to download video content, guests would have to pay for the privilege. This stabilises demand, resulting in less pressure on connection.
“To find the best model for business, hoteliers need to understand when the peaks and troughs of its guest internet use arise – who is using it, when they are using and what they are using it for. Then hoteliers can work with their Wi-Fi providers to choose the best solution for them.”
Once guests are logged in, there are other opportunities for hotels to benefit and extend dialogue with their guests. In particular, the internet portal itself can generate additional revenue and advertising opportunities.
Dean said: “The welcome pages of a guest internet portal holds huge potential as an additional sales channel. The system can be used to identify a user’s location and then offer them up-to the-minute information, such as the restaurant menu for that evening or notify them that it’s Happy Hour in the hotel bar.
“Moving in-room marketing collateral online or onto a television welcome page can save substantial printing costs and allows hotels to make any amendments or updates without resulting in additional spend.
Dean says the feedback from their hotel clients suggests that a more informative guest internet experience has resulted in happier customers.
He said: “A Wi-Fi portal can be used as an additional customer service tool and another way to mark your hotel out from competitors. A hotel could include links to external service providers that might be useful to its guests, such as taxi firms, a local doctors or even information about nearby running routes.
“Indeed, there is also the opportunity to sell advertising on the portal itself and to work with brands that reflect the quality and values of your hotel. Adopting this type of approach will improve your guests’ experience and your business’s reputation.
“The data capture potential of a Wi-Fi portal is often one that is overlooked but it provides an ideal medium though which you can gather extra information about guests staying at your hotel. Whether it’s collecting straightforward company details or enquiring about people’s interests, WiFi can be used to refine and develop your marketing database and provide another means to build a relationship with your guests and customers.”
“Hotel guests are a captive audience and are often looking for the convenience factor when making their purchasing decisions, such as where to eat that night. If hoteliers take the initiative with their WiFi solution, they could be soon be reaping the financial rewards.”
Published: Hotel Business
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