It’s tempting to see free WiFi as an overhead costs. Your hotel guests expect it, so you have to pay for reliable service in all rooms and public areas. If you fail to do so, the negative reviews start coming in. Think water or electricity, which are simple expectations of any guests as they arrive and through their stay.
However, reality is starting to look different. Increasingly hotels are beginning to realize the true opportunities that WiFi brings with it. For these organizations, the concept is turning IT from a service department just looking to keep things running to a profit center that plays a role in your revenue generation.
That’s not necessarily intuitive. After all, most services IT offers don’t tend to act that way. Still, it’s an important consideration as you look to distinguish your hotel and maximize the opportunities each guest brings with them.
The Need for Free WiFi in Any Hotel
Just a few years ago, wireless internet access was an added benefit for any hotel looking to attract guests for overnight or long-term stays. Today, it has become absolutely vital to attracting those same guests. In fact, according to recent studies, free WiFi is the single biggest technology influencing a consumer’s decision to stay at a hotel.
That makes intuitive sense. We are nothing if not connected; from smartphones to tablets, the need to constantly be online has long been documented by technology experts and sociologists alike. As one survey found, it takes the average guest seven minutes or less to find and log into the hotel WiFi. When they can’t, 61% of consumers feel lonely and disconnected, the opposite of what the hospitality wants to make its customers feel.
That expectation has become both a blessing and a curse. Offer free wireless internet, and the chances of guests choosing your hotel increase drastically. But others in the industry have noticed, and the service has turned from a benefit to a necessity for competition. That’s the biggest reason WiFi has turned into a cost center, a necessary expense for any type of customer satisfaction. Yes, the opportunities to generate revenue still exist. You just have to find them.
Guest Engagement Through Hotel-Internal Networks
First, think of WiFi as a core communication channel. Rather than simply offering a free network to log in, hotels are using centralized platforms involving either an app or web portal. As a result, they can get their audience’s contact info for more targeted communications.
The possibilities of this opportunity range depending on the types of guests your hotel attracts. Business customers might want to know the hours of the computer room or fitness routines in the morning. Leisure guests may prefer to be aware of activities, shuttles, and day trips to local attractions.
When set up the right way, WiFi is the gateway to communicate this information with your guests. Of course, many of these types of add-ons may cost extra, allowing you to drive guests directly to your secondary revenue generators.
The Targeted Advertising Opportunities of WiFi Networks
Offering WiFi to all of your guests also allows you to tap into your possibilities as an advertising platform. Especially if you manage the access through a centralized portal, and given the ubiquity of guests now using WiFi, you have a captive audience that especially local advertisers can tap into.
From local restaurants to attractions, you likely have a number of stakeholders interested in reaching your guests. This is your opportunity to offer that possibility without intruding the personal or physical space in which your customers operate. Naturally, you won’t hang posters in the hallways. But what if a local sightseeing company could provide that same information through your WiFi network?
Consumers recognize that getting something free online typically comes with some type of trade-off. That trade-off might consist of viewing an ad every time they try to log in. The result is minimal intrusion in exchange for added profits that come with little to no additional overhead cost.
Premium Options to Increase Nightly Revenues
In a world where guests expect free WiFi no matter what, the obvious option of charging for it to build extra revenue has gone away. That doesn’t mean hotels have run out of options. Instead, many resorts are beginning to build tiered plans for their guests.
These tiered plans typically include a free option that allows for general web browsing and checking/writing emails. It will likely be enough for many guests, especially those with family. But if someone wants to stream video content, download large files, or play online games, they might need to pay.
This approach accomplishes two things at the same time. First, you build revenue from guests who do want to take advantage of premium options. In addition, you also de-saturate your network by redirecting what will likely be the majority of your guests to lower-volume servers. Limited in bandwidth, their service can still be reliable without costing as much on the IT side.
Gaining Insights into Guest Demographics and Behaviors
Anytime a guest logs into your network, they give you their information. What you do with that information, of course, is entirely up to you. We’ll let AT&T’s associate VP and hospitality practice make the argument for free WiFi as an important data tool:
Brands, owners and property managers should view Wi-Fi as a platform for guest insights and analytics for marketing opportunities versus only a cost.
Indeed, while your guests are enjoying what they consider to be a necessity in accessing the internet, you can access relevant insights into their demographics, behaviors, and even contact information. A quick survey at the beginning of the access helps you get started in some of the basic information. Data on how long the average guest spends online, and most popular websites visited (anonymized to protect your guests’ privacy, of course).
That data gathering effort can extend to more complex scenarios, as well. With the right analytics tools, you can gain insight into what areas of your hotel WiFi is most used, and even how your guests choose to move around the building and exterior. As a result, you can find pain points that might be improved through better signage, or better position your promotional efforts physically. These might be indirect revenue generators, but still allow you to aim for higher profit as a result of the WiFi you provide.
Making the Long-Term Play in Retaining Your Guests
Finally, don’t underestimate the potential power in guest retention. We know that in the hospitality industry, repeat guests spend up to 30% more than new guests during a stay of the same length. We also know that repeat guests are much easier to attract, and that increasing retention rate even by 5% can increase profitability by as much as 75% depending on the situation.
A seemingly simple concept like free WiFi can actually play a powerful role in accomplishing those ambitious revenue goals. The first reason is obvious. Happy guests are more likely to come back, but also to talk about your hotel and recommend it to others. Given the clear expectation of WiFi that exists today, even offering it can be the difference maker between encouraging those recommendations.
It doesn’t end there. The insights you gain into your guest demographics can help you not just improve their initial stay, but optimize your outreach to them over time. As you analyze reports on demographics, interests, and behavior, that insight can feed into your digital campaign. Depending on your solutions, you can even leverage retargeting to market specifically to previous guests who used your internet access during their last stay.
How to Turn Your Hotel WiFi From Cost to Profit Center
In today’s connected world, offering free WiFi has become a necessity. It’s tempting and perhaps even obvious to compare it to basic utilities like water and electricity, given how integral it is to the modern guest experience. That doesn’t mean it has to become an operating cost you simply have to eat in order to satisfy your customers.
Instead, the technology still offers a number of opportunities to generate revenues, pay for itself, and even add to the overall profit your hotel could generate. Some of these opportunities are direct, like advertising possibilities for local businesses and premium options for high-bandwidth alternatives. Others, like gathering insights and guest retention, are more indirect but can still make a major impact on your long-term revenues.
Of course, all of these tactics are theoretical. To be truly effective, they need a strategy that pulls it all together, establishes revenue and coverage goals, and communicates it to your guests in a way that both makes sense and doesn’t alienate them.
Finally, don’t underestimate the importance of the right technical setup. WiFi, and any potential revenue that comes with it, can only be beneficial if it works reliably, optimized for the number of guests and the ways they’ll use the access. That, in turn, requires a solid IT infrastructure designed to take care of both the basics and more complex nuances behind each of these tactics. Contact us to start talking about a potential partnership that turns your WiFi from a cost center into a revenue opportunity.