April 01, 2012

Maximizing or not the Internet Access Revenues...

I always try to share the best subjects on ancillary revenues where hoteliers can maximize their business units revenues, following analytical of their trends, and placing up the right strategies to grow their department profitability.

Having said that, when it comes to Internet access revenues, 10 years back hotels had to massively invest in broadband internet access (the one that came from the broadband cable plug in the wall), because  IT managers and hotel operators, had to cable the entire hotel, invest in routers, to ensure a decent internet access throughout the hotel. it's started first, with US hotel chains, then the rest followed up. Then came Wifi, with concepts such as @The Link by Sheraton in 2005, proposing a wifi access in the hotel lobby, then move to Hyatt....etc.....

Cost of technology is dropping

Six to eight years ago, a typical hotel wireless internet provider would place a few expensive access points at strategic points in the building, hoping to cover the entire hotel property. They installed expensive servers, switches and routers on site, and hired high cost IT workers to keep the whole thing running.

So what's changed in 3-4 years? unfortunately, most WIFI companies haven't changed a lot. They still install a few access points and expensive servers (that cost between AED 10,000 to AED 40,000 each) on site. Whether something breaks and become outdated, it gets replaced at the hotel's expenses.

Now with cloud computing, hotels can save lots of money by removing their servers, having a dial up off site consultant that can remotely access the location. 

In my last 6 years in UAE, i must have visited nearly 250 hotels across the Emirates, and stayed in nearly 40 hotels. All the hotels prove to be great in design, had a lovely big room with sectional sofa and huge flat-panel TV, quiet, upscale, and very well thought in amenities.

Except for the Internet Access

As has become all too common with Internet Access in hotels, Dubai hotels charges not by room for internet access, but by computer, so they can maximize their revenues: share a room and each of you pays for Internet Access. At AED 95.00 / Day that adds fast.

The issue is, we've move beyond a single Internet access device per traveller. I travel with three devices (laptop, i-phone and i-pad), that each want to get their personal ray of internet sunshine.

According to hotel policies, that would be 3 items x AED 95.00 AED 285.00 / day for Internet access.

Worst if you are sharing your rooms, with someone, that has also a smartphone and a laptop, so between you, hotels end up collecting AED 475.00. Staying for 3 days, it is AED 1,425.00 per stay.

Clearly this is an outdated way of charging for access, to say the least....

Having share that, I can admit that any hotels involved in Profit Therapy has to generate revenues every way they can. But there is an adjustment needed there, where Internet access need to be a flat fee for all devices.

One possibility, could be upon check in to ask how many laptops or smartphone access you need, or each access token could be great for two devices, let's say a laptop and a smartphone. Throughout their stay, travelers will experience that Internet Access is a real pain, and this may results in a share opinions through TripAdvisor or other communities.

When it comes to hotel Wifi, you should always lean towards simplicity:

Make it fast,

Make it easy,

Make it free,

Your guests will thank you for it and will keep coming back.

Romain @ RSVP - Hospitality

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