Here’s the truth about how hotels and convention centers charge meeting organizers for Wi-Fi at their events, in the words of a venue executive: “What is the fair price? Whatever the client can afford to pay.”

So what you’re about to read regarding investments venues are making to meet bandwidth demand, and how often they must upgrade that infrastructure, is relevant. But the bottom line is that market forces are at work in Internet pricing. Getting your best deal means going in with as much knowledge as possible.

It’s the Wild West

Which can be easier said than done, considering the varied service quality and pricing schemes planners are likely to encounter. Among the ways that Tom Grohman, manager of the IT services unit at association management firm SmithBucklin in Chicago, has seen venues charge for Internet connectivity are the following:

• Pricing based on bandwidth.

• Pricing based on bandwidth plus the number of locations where connectivity is needed—For example, you might be charged $10,000 to connect to the venue’s 10Mbps of bandwidth, then an additional $500 or $1,000 for each place in the venue where attendees can get a wireless signal or wired connection.

• Pricing based on concurrent connections—
that is, the highest number of users connected at any one time during your event. (So there might be a set fee for 1,000 peak users, a higher fee for 2,000 peak users, and so on.)

• Pricing based on unique connections—that is, all devices connected to the network during the event. This requires giving attendees unique access codes. The show organizer would then pay an agreed-upon amount per connection.

• Pricing based on a daily fee charged to the individual attendees  

• Free! OK, that’s rare, but it is available at some centers, including the Boston Convention & Exhibition Center, Boston’s Hynes Convention Center, and the Austin Convention Center. (Caveat: All these centers suggest that exhibitors spring for individual wired connections and point out that the free networks are unmanaged, therefore susceptible to rogue users hogging bandwidth and other interference.)

• Wireless “buyout”— a flat fee for dedicated bandwidth, and unlimited connections and coverage throughout the meeting space for the duration of the event.

The latter is Grohman’s preferred pricing method. In his experience a wireless buyout ranges from $10,000 to $40,000; for shows of more than 10,000 attendees the fee could rise much higher. One way to defray the cost is to sell the “splash page” to a sponsor. This is the first page a user sees when connecting to the network.

Of course, not all the largest meetings necessarily pay the fee at all. (See “How HIMSS Meets Its Wireless Demand.")

Smart City Networks offers buyouts at the 37 convention centers where it provides wired and wireless networks. Among the variables at play in designing and pricing a buyout, says David Lang-ford, vice president, technology, are the amount of bandwidth dedicated to the network, the space rented (one hall or the full building, for example), the number of users and devices, the duration of the event, and anything that might change (a different splash page each day, for example).

For show organizers that do not need or want a buyout and are meeting at a venue served by Smart City Networks, they can use the venue’s free public-space Wi-Fi, which is sufficient for checking e-mail or visiting a Web site. At the next level is the Instant Internet package, which is slightly faster Wi-Fi in the public areas and the meeting space, and costs $12.95 per person per day; three days for price of two; and five days for price of three.

In general, show organizers work directly with a center’s Internet service provider or the center itself to order their Internet connectivity. And in most centers, exhibitors’ Internet connectivity is handled separately from that of attendees and show operations. Smart City Networks offers the Exhibitor Internet package, which delivers basic wireless service on the 5.0GHz spectrum. (This is important to note, as it does not interfere with the wireless signals for the rest of your attendees, which are on the 2.4GHz spectrum.) Many exhibitors bring in their own wired solution, Langford points out, but the wireless package, at $79.95 per day, allows them to move around with an iPad or laptop.

Exhibitors may bring their own wireless solutions as well, which is what Olivia Cole, client services director at advertising agency Greenlight, did for a show last year. “La Quinta Inns & Suites hired Greenlight to manage their trade show booth. Our concept for the booth was supported by Twitter: Our goal was to ‘own’ the social space at the conference,” Cole says. “This was risky, as we were more reliant on a strong Internet connection than we had been in years past.

“In our initial planning, we learned that the conference was going to charge in the ballpark of $7,000 for Internet service. There wasn’t going to be any guarantee, and the connection would be shared with anyone else shelling out the big bucks.” Cole hired GoodGuyMobileInternet instead. “The service was reliable and their pricing more than fair.” GGMI service starts at $250 per day; Greenlight’s Internet bill for the show was around $800.

Paying for Wi-Fi in Hotels

PSAV works with nearly 400 venues, primarily hotels, in the U.S. and Canada. In some, the company manages the entire wired and wireless network and related services; in the others, the company provides the sales and on-site support for the venue’s network, which is run either by the hotel itself or another third party.

In the end-to-end scenario, PSAV is designing the network, something that many hotels are newly focused on with guest and group demand for Wi-Fi increasing like crazy. These infrastructure upgrades are expensive and they’re not permanent, since wireless technology changes rapidly. A report from wireless network provider iBahn states, “If a hotel’s Wi-Fi system was designed before 2010, it likely needs to be reconfigured to support the video demand arising from new devices like the iPad.”

For the properties it works with, PSAV has standardized Internet pricing so that it is based on bandwidth alone. “We would rather have the industry start thinking about high-speed Internet access as a quantity—the amount of stress that a group places on the network,” says Matt Harvey, vice president, client services, at PSAV. “I can show you a report and make it tangible, and you can take that measurement from one venue to the next.”

Bandwidth is also, he says, “the closest approximation we have for the cost of installing those networks in the first place.” And since bandwidth “doesn’t do anything by itself,” what’s folded into the price are the initial cost of the infrastructure and its regular upgrades, operational expenses, and on-site and off-site support. Volume discounting is “baked in,” he says. “We call out prices for 0.5Mbps, 1, 3, 5, 10, up to 100 Mbps. The more you buy, the lower the price per Mbps.”

Though the structure is standardized, the actual numbers are not. Market variables come into play. “You don’t pay the same for your room at every Westin,” Harvey says. “It depends on the competitive situation,” including the “raw cost” of bandwidth locally.

Competitive Bidding

Trade Show Internet is a temporary network provider that planners can hire to set up high-speed Internet access at a venue—even those with in-house providers—if, as CEO Ian Framson explains, “the venue either has no network or the network is insufficiently built to handle their needs.” TSI creates a site plan based on the size and usage intensity of an event, then provides a quote with line items for bandwidth, labor, equipment rental, and incidentals.

Framson’s view is that planners should contact temporary network providers to keep the in-house provider honest. “If Internet access is critical it should not be a no-bid award,” he says. “You need multiple bids to ensure competitive pricing and quality of service.” He and others say FCC rulings prohibit “exclusivity” in providing Internet service, but he advises planners who intend to get outside bids to address it early in the planning process.

Harvey agrees some planners might need outside partners. However, he notes, “it should always be cheaper to use the in-house Internet connectivity than anything you might bring in.”

And if it isn’t? That’s some good negotiating leverage.

How About that Free Wi-Fi?

A trending option for hotels and centers is to offer free Wi-Fi for guests and convention attendees with just enough bandwidth to check e-mail and visit a Web site; then offer a faster connection as a paid option. PSAV’s Harvey is not a fan. “The challenge is what is ‘just enough’? Is it just enough to annoy people? I don’t think offering a crippled level of connection is a path to excellent customer service.”

Sam Stanton takes the idea of “free” out of the conversation. “Hotels should make guestroom connectivity part of the room rate,” he says. “Everybody needs connectivity these days: Hotels don’t charge extra for towels or a TV.”

Justin Herrman, executive director, IT, at Sands Expo & Convention Center, Las Vegas, says whether Wi-Fi is free for an event “would be based on the property and its position in the market. Small venues may provide free [Wi-Fi] and recoup the cost on F&B and room nights. For venues that are larger and more prestigious, a cost may be justified.”

Smart City’s Langford sees the tiered system taking hold. “A few years ago, people thought ultimately [Wi-Fi] would be free,” he says. “That theory has changed. Everyone is moving toward a tiered system, with some form of free connectivity.” In answer to those who believe high-speed Internet access should be free and ubiquitous like water, Langford expands the analogy. “I can go to the drinking fountain in a convention center and it might not be filtered, might not be cold, and everyone else is using it” but it’s free. “Or I can go to the five-liter jug and get a cup, and it might be filtered and might be cold. Or I can buy bottled water that is individual, filtered, and refrigerated. Or I can buy custom-labeled bottled water.”

 TSI’s Framson also makes the quality argument. “There is no consistency. Planners should expect that free is mediocre at best. In general, a good network will cost $10 to $50 per person.”

Still, Grohman at Smith Bucklin is a believer in free: He’s seen it work beautifully in Boston. “Within the next 10 years, maybe even five years, there won’t be any venues charging you for Internet. It will just be a service like the lights or the elevators.”

In fact, at press time, Inter Continental Hotels Group had just announced free Wi-Fi at its 4,600 properties worldwide, becoming the first hotel chain with full-service properties to mandate that owners provide basic free connectivity. (Some may have a tiered system in place, charging users for premium service.) Access does not require a hotel stay, but does require free registration for IHG’s loyalty program.

(INFOGRAPHIC) Quick-Start Guide: Pricing