What is in this article?:
- WI-FI PART THREE: Pricing Internet Service for Events
- Paying for Wi-Fi in Hotels
- (INFOGRAPHIC) Quick-Start Guide: Pricing
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.
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.