Insights from APT's Hospitality & Travel Practice

Should Hotels Offer Tiered Wi-Fi?

May 13th, 2014 | Posted by Ryan Rosario in Uncategorized

In response to increasing consumer demand for basic internet connectivity, many hotels are now opting for a “tiered Wi-Fi” offering, where a basic Wi-Fi package is included in the base room rate and guests can opt to pay extra for a high speed offering. The main goal of the tiered Wi-Fi approach is to drive additional occupancy while also covering the increased IT costs.

Determining the additional revenue flowing through the tiered Wi-Fi offering is easy; the challenge lies in understanding the total revenue impact of the new offering at each hotel. Prior to implementing the program broadly, it is critical that hotel executives consider key questions such as:

  • Will offering tiered Wi-Fi truly drive incremental room-nights?
  • What is the appropriate pricing structure for high-speed internet options in order to drive the most incremental folio? How should this structure vary by market or by location?
  • Will the additional revenue generated by the high-speed Wi-Fi options (and potentially by higher occupancy) justify the additional IT costs?

Testing this new program in a small subset of hotels and comparing site performance to similar hotels that do not receive the offering will enable hotel executives to understand the true incremental impact of offering tiered Wi-Fi. Further, this Test and Learn methodology allows executives to tailor each program and target rollout only to the hotels predicted to respond profitably.

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