Wi-Fi spurs broadband growth in hotel industry

Computerworld - Led by Wi-Fi deployment in midrange hotels in North America, the number of hotels offering broadband Internet access in guest rooms is expected to more than triple between 2004 and 2009 to nearly 54,000 properties worldwide, said a report on Tuesday.
But experts warn travelers that while low- to midrange hotels are already making broadband Internet a standard guest amenity, like free coffee or breakfast, most higher-end hotels that cater to business travelers will fight dropping the charge.
"At a two- or three-star hotel, breakfast is usually free. But there's no such thing as a free meal at a four- or five-star hotel. Broadband access is kind of along the same lines," said Amy Cravens, an analyst at Scottsdale, Ariz., research firm In-Stat.
Best Western International Inc. has installed free Wi-Fi service in at least 15% of the rooms in all 2,300 of its hotels in North America and the Caribbean. All Clarion Hotels and Comfort Inns and Suites also have free Wi-Fi. But InterContinental Hotels Group, which offers high-speed Internet at 2,700 North American hotels, offers the service for free only at its Holiday Inns and other low- to midrange brands, not at its deluxe hotels.
"[Higher-end] hotels have always nickel-and-dimed guests. I just don't see that going away," said David Blumenfeld, vice president of marketing at JiWire Inc., a San Francisco company that offers a Web-based directory of Wi-Fi hot spots.
One reason is that hotels, especially high-end ones, have lost the easy, high-margin revenue from charging guests for local and long-distance calls because of the ubiquity of cell phones. Atlanta-based research firm PKFConsulting estimates that hotel revenue from guest phone call charges fell by an average of one-half between 2000 and 2003.
Charging business travelers, who can expense the typical $10-per-day fee for Internet, has helped cushion the financial blow at higher-end hotels, asserts Blumenfeld.
Another reason is that installing broadband, especially wired access in older hotels with aging phone lines, can cost on average $100 more per room than installing wireless access, Cravens said. Even Wi-Fi deployments take at least a year to pay for themselves, he said, which is why more than two-thirds of hotels today are choosing Wi-Fi, with many also opting to outsource setup and management to specialized wireless service providers, splitting the financial rewards and risks.
While some individual high-end hotels are making broadband access free to guests, the only high-end chain to announce plans to do so is Radisson SAS, which has already made Wi-Fi free to guests in Europe, Africa