Telecoms firms and internet service providers are not the most flexible or transparent organizations to deal with. Many of us know this from personal experience, but for hotel owners and operators, the pandemic drove the point home further.
While lockdowns reduced occupancies to single figures, operators were able to minimize a whole range of their running expenses, from staffing levels to water and electricity. In most cases, the same did not apply to internet access. While occupancies were running at 10 percent, some hoteliers continued to pay for Wi-Fi as if it were business as usual.
Typically, hotel operators pay a fixed monthly fee. Extra bandwidth can be booked in at a price, for example, if a bunch of sports teams are staying and movie streaming and data usage will peak. But the notice necessary for such flexibility tends to be at least one week, which is not great for unexpected increases in transient demand.
To keep some level of competition in play, sensible hotel operators will not sign any supplier agreement for longer than a year. Those working with the global hotel brands are tied to brand-certified ISPs in any case.
Hoteliers have long argued that Wi-Fi should be treated like hot water or electricity—a utility paid for based on consumption.
“Some of the Wi-Fi providers and certainly some of the IP telefony providers are doing occupancy-based pricing now. Not all, to be fair, but there is a way of going with that,” said Carl Weldon, COO Europe for the Hospitality Financial and Technology Professionals Association.
Generally speaking, however, connectivity running costs are modest. The real cost of Wi-Fi for owners is in the hardware.
Costly Upgrades
Demands for costly Wi-Fi upgrades are now becoming a source of frustration for some owners, particularly given that investing in internet access provides virtually no return on investment.
“This is a highly emotive subject because it’s one where [hotel owners] continue to invest with little or no return, other than hoping that guest satisfaction is a part of it. Wi-Fi will never become a chargeable item,” said Kevin Edwards, director global business development at Alliants.
At an 800-bedroom branded hotel in the Middle East, Edwards was brought in to oversee a Wi-Fi upgrade project because the owners were not satisfied with what the operator was suggesting they do. $900,000 of the estimated $1 million total cost of upgrading the hotel’s network from Wi-Fi 5 to the new Wi-Fi 6 standard would go on replacing all of the hardware.
The cost of putting Wi-Fi 6 infrastructure in a new-build hotel is almost half compared to upgrading the same-size existing hotel.
The global manufacturers of Wi-Fi hardware are talking about reaching the mass adoption of the new wireless standard Wi-Fi 6 over the next two years. Users are likely to predict a much longer timescale. As is so often the case with IT, some see disadvantages to early adoption.
“Wi-Fi 6 is not market-ready yet in Europe. Until it gets into the mass adoption scale, there will always be that lead time when it’s definitely more cost-intensive and with teething issues,” said Vibhu Gaind, chief information officer at RBH Hospitality Management, a U.K. company with several brands in its 45-hotel portfolio.
At this stage, from a hotel guest’s point of view, the difference between the Wi-Fi 5 and Wi-Fi 6 standards would be almost unnoticeable. “Any operator going to their owner in this financial year wanting to upgrade a load of kit to Wi-Fi 6 … 99 percent of the time, the business case is so poor. Often the operators are not really thinking it through. Certainly in terms of priority of investment currently for hotels, I would suggest that Wi-Fi is probably fairly low down the list,” Edwards said.
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