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Why High WiFi? Solving the mystery of why some hotels provide free internet access, while others hit you with major fees.

By Joe Brancatelli

entrepreneur daily

A decade ago we were complaining about the cost of calls from hotel-room phones. Why, we wondered, did cheap hotels give us free calls, but fancy, five-star joints ding us even for toll-free numbers? Who made more sense: The general manager who insisted that telephone calls were an integral part of the nightly rate, or the one who claimed he wouldn't think of charging a guest for a service he or she didn't use, so anyone who used a hotel's telephone system had to pay inflated, à la carte prices?

Mobile phones mooted that debate, and no business traveler even thinks about using a guest-room telephone today. But the deep, philosophical disagreements are back-over the price hotels may or may not charge to access high-speed internet and WiFi service.

Business travelers expect select-service properties (that's politically correct, 21st-century lodging jargon for "cheap hotels") to offer free wired and/or wireless internet access. And free access is standard at places like Courtyard by Marriott, Hampton Inn, and Four Points by Sheraton.

"You can't compete in the [select-service] segment if you don't include free internet as part of the room rate," says Tony Isaac, president of LodgeWorks, which operates hotels under the Hilton Garden Inn and Hyatt Summerfield Suites brands and owns a group of suite properties called Hotel Sierra. "Guests demand it. They need it to work. They use it for entertainment. They don't care about 24-hour room service or bellhops. What they expect is the ability to get on the Net free from anywhere in the hotel."

When you climb the lodging-price ladder, however, internet access becomes an add-on service. Hilton may give it away at its Garden Inn and Hampton Inn brands, but internet is á la carte at its upmarket Hilton and luxury Conrad and Waldorf-Astoria properties. Ditto for Marriott, which charges for internet at its eponymous full-service hotels and its ritzy Ritz-Carltons, but offers it free at its Courtyard and Fairfield brands. Other big lodging groups-Starwood, InterContinental, Hyatt-follow the same formula: Free at the lower-priced brands appealing to road warriors, fee at fancier properties likely to draw more leisure travelers.

"I don't apologize for charging $15 a night for internet," says the general manager of a luxury resort property who nevertheless demanded anonymity. "Only a fraction of my guests use the internet when they're staying with me. Those that want it pay. Those that don't aren't paying for it as part of their room rate."
The problem with pay-as-you-go internet is that hoteliers look at Web access as a profit center. Just as they jacked up the price of guest-room phone calls, they are running up the price of internet access. Although nightly rates tend to range from $7 to $15 at U.S. hotels, "I've paid as much as $50 a night for access overseas," says Andy Abramson, globe-trotting founder of Comunicano, a public relations and marketing firm based in Del Mar, California.

Abramson, who has turned his obsession with travel-technology tools into the Working Anywhere blog, says he's okay with paid hotel internet, even if it is overpriced. "If it's free and it doesn't work, how can you complain?" he reasons. "But if I'm paying, I'll scream bloody murder if I can't get on the Net and work."

I'm not as sanguine about WiFi fees. I expect free internet access at the select-service hotels because I know that is part of their value proposition. I accept that more traditional hotels consider it a pay-to-play option because they offer different perks (more lavish decor, room service, concierges) as part of their room rates. But it's ludicrous to pay more for a night of hotel-room internet than I shell out for a month's worth of access at home. It makes me angry-and less likely to stay in that hotel again.

"We've warned our franchisees about overpricing," the executive of a major full-service chain told me last week. "But they live and die with the bottom line, and they're worried about the rising cost of providing internet service. Guests are really gobbling up the bandwidth now that they're downloading movies, playing games, and doing video conferences."

Isaac of LodgeWorks is concerned too. "We used to have one T1 line for a hotel of 120 to 150 rooms, and we knew guests were getting good, speedy access. But in our hotels in high-tech areas like Santa Clara [in California's Silicon Valley] or Fishkill [in New York's Hudson Valley, where many guests are I.B.M. employees], we need two or even three T1 lines now."

A T1 line, which data transfers at 1.5 megabits a second, costs a hotel $500 to $700 a month to rent. T1 providers also impose a monthly service charge of about $2 a room. "And the price is only going up as guests demand more bandwidth and faster access speeds," Isaac predicts.

So what's the bottom line? If you think free internet is your right, stay at the hotels that offer it. If you insist on staying at the fancier joints, consider high internet fees part of the high cost of living the high life on the road. Like the decades-long battle over the cost of a hotel-room phone call, I think this argument is going to be around a while.

The Fine Print.
One way to mitigate the high cost of on-the-road internet access is with Boingo, a network of WiFi hotspots. Among the company's 100.000 participating locations are more than 19,000 hotels and 850 airports. Boingo charges $21.95 a month for unlimited access in North America or $39 a month for global coverage. T-Mobile's hotspot network is also available in monthly gulps, but prices are higher than Boingo.

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