Monetizing Wi-Fi through tiered bandwidth - Insights

Monetizing Wi-Fi through tiered bandwidth

Wi-Fi coffee beansIn survey after survey and study after study, free Wi-Fi is the most wanted and needed amenity. This demand is so strong that according to our recent study, 72% of the guests we surveyed declared that not having free Wi-Fi is a deal breaker when choosing a hotel. There is no question that free Wi-Fi is here to stay, but how are hoteliers going to keep up with the demand for more and more bandwidth? Guests travel with smart phones, tablets, laptops and they expect to hook up to your wireless network with all these devices. Put a family in the room and usage multiplies rapidly.

Not only do guests expect top notch wireless connectivity available 247, they expect it to be fast! However, we all know faster internet means more cost to the hotel. Who should pay for this? The guest or the hotel?

Where is all this bandwidth going to come from and how do you put all these guests and their families and their devices online? Hotels are already investing in a Wi-Fi infrastructure by increasing bandwidth to allow for video and music streaming, etc. It is fair for a guest to expect good quality free Wi-Fi to access email, Facebook, Twitter Instagram etc. However, when it comes to guests watching Netflix, Amazon, Hulu and YouTube in crystal clear HD quality, it’s a fair to assume there should be a cost to this type of premium access.

Think about it – hotels are already taking a hit with video on demand not being utilized. Are they now supposed to pay for the bandwidth of the upstart (video streaming) that is replacing their only in-room entertainment revenue source? Moreover, paid Wi-Fi proved to be very lucrative and was a significant return on investment for the hotelier. So now what?

The advent of tiered bandwidth

Now that free Wi-Fi is an intrinsic part of doing business, hoteliers have been searching for another means of recouping their investment while still delivering an exemplary service that keeps the guests happy and their craving for bandwidth satisfied. In our recent study, 53% of the guests surveyed said they would be willing to pay an additional nominal fee for the increased speed and bandwidth. The sweet spot for hoteliers was $4.99. By implementing a tiered offering, guests who do not require increased bandwidth and are perfectly happy with the free Wi-Fi that the hotel offers are not penalized by having to pay for it. Those guests who require greater bandwidth for streaming content or transferring larger files would simply pay an upcharge. This is not unlike consumer offerings from cable companies that upcharge you if you want faster access.

This premium service would help on the hotel’s ROI and pay for the infrastructure. Accordingly, it becomes very simple for the hotel and the guests. With tiered bandwidth, basic internet browsing is free, but if they should require additional bandwidth, guests would be able to purchase “Enhanced High Speed Internet.” In this way, everyone gets the bandwidth they need, without bringing down the hotel’s network.

Design and installation

The more Internet-centric we become, obviously, the more bandwidth required. Hoteliers and installers need to take this growing need into consideration and put these forecasted requirements into the design, whether it be a new installation or an upgrade. One of the determining factors is the Wi-Fi access point. Guests share the bandwidth from the AP they are using. The hotel, along with the installer, needs to determine how much bandwidth is needed by how many guests – thus determining how many access points are necessary.

There are tools for implementing tiered bandwidth such as Fusion Gateway. The device enables hotels to bill their guests for tiered levels of access and charge for premium usage. Additionally, there is direct credit card integration with over 40 different merchant gateways, PMS integration using multiple PMS vendors and prepaid access cards. The Fusion gateway allows bandwidth tiers as well as fail-over, so there is “Always On” Wi-Fi.

The great differentiator

Hoteliers will find that initiating a robust state-of-the-art Wi-Fi system is a necessity in today and tomorrow’s marketplace. It is a major differentiator in separating out your establishment from the competition. When you can deliver seamless connectivity to your guests that enables them to rapidly logon to the network – and, of course, stay on it – while delivering plenty of bandwidth and 24/7 guest support, you will have the happiest of guests. They will write good reviews and tell their friends about your hotel.

With the proliferation of internet-enabled devices rapidly increasing each year, tiered bandwidth makes the most sense for both monetizing the network as well as keeping guests happy.

About the author

Larry JaffeLawrence Jaffe is the Marketing Director of Hotel Internet Services, a leading provider of secure wired and wireless Internet services, Video-on-demand, IPTV streaming media, unattended business centers, 24×7 Support services and meeting and convention services for casinos, hotels, resorts, timeshares, and other venues. Hotel Internet Services has successfully deployed hundreds of small to large-scale facility-wide Wireless and TV solutions across the US and currently manages and maintains hundreds of properties with more than 150,000 guestrooms.

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