The ROI of Great Hotel Wi-Fi

Hotel WiFi Sucks Infographic

You already know you need to improve the Wi-Fi in your hotel. For the last 6 years there have been reports on top of reports about insufficient Wi-Fi being a hotel’s “Achilles’ heel”, and surveys have shown that guests’ demand for a great Wi-Fi experience is at the top of the ladder on the list of preferred amenities. The majority of our infographic was created to remind you of what you should already know, but what’s different is the case for your return on investment.

If you’ve been reluctant to upgrade your hotel’s wireless network because of how much it’ll cost you, I’m here to convince you that it’ll be the single best investment you ever make for your hotel’s future – in terms of both tangible revenue, and intangible customer experience.

Lost revenue, it sucks!

There are four ways your hotel is currently losing revenue because of poor Wi-Fi:

  • Lost bookings because online customer reviews show complaints about your Wi-Fi, causing potential guests to look elsewhere
  • Waived fees because your guests were frustrated with their Wi-Fi connection cutting in and out, and not having enough bandwidth to support their needs.
  • Corporate events canceled because they found out your wireless capabilities aren’t up to their standards.
  • And the most overlooked of all, few returning guests because their poor experience with your Wi-Fi put a damper on their overall experience with your hotel.

You may be thinking, “There’s no way my Wi-Fi network is that important to guests.” Well, a recent study by Forrester Research asked guests “What amenities are important to you in your room?” with 94% of respondents citing Wi-Fi as important and even a deal breaker. A survey found Wi-Fi access ranked higher than any other hotel amenity; including complimentary breakfast and free parking.

Convinced yet?

Consider for a moment how much you are really losing because of these four reasons. If you do the math, I guarantee you the numbers will be astounding.

Poor networks consume your resources

Inefficient, poorly designed networks deployed with cheap hardware will consistently eat up your valuable resources as more time is allocated to resolving issues.

IT-decision makers responded in a survey conducted by Forrester Research that guest issues with wireless networks hold the top 3 spots when it comes to customer complaints.

“Customers ran into issues most of the time when they tried to log on to the Wi-Fi with multiple devices. Typically most hotels are set up to authenticate one MAC address per room. As the ratio of devices to people increases and accelerates, complaints will only get worse. Another area that will cause a rise in complaints is the erratic service. As more and more users leverage their mobile devices for entertainment, to stream movies, or to make video phone calls, the connections will only become more clogged. More complaints mean more costs associated with answering them and lower customer satisfaction with the hotel stay.”
– (Forrester Research Inc., 2013).

In order to have a reliable wireless network capable of handling hundreds of devices in a dense area such as a hotel, it takes more than just deploying multiple thin access points throughout the building and connecting them to a central controller. This design creates unwanted latency due to the signal needing to travel from the access point – to the controller – and back out to the client.

Also, by setting up single thin APs all over the building, you create a system that’s hard to efficiently maintain for your IT staff. When one of the APs goes down, they have to locate it and manually reboot it, one by one. This all happens after the guest called your front desk to complain.

Not good for customer experience.

The technology exists to help you cut costs, and to even build revenue!

Technology in Wi-Fi equipment has evolved to a point where they can now overcome many of the issues hotels are having with older and inferior hardware; reducing the time needed to solve constant issues related to the network. Companies like Xirrus have spent millions developing wireless equipment specifically for hotels with access points that are intelligent enough to authenticate multiple devices, and automatically manage performance, security, and analysis all at the edge – providing your guests with a seamless, trouble-free experience with the Wi-Fi network at your hotel.

These advanced access points are also designed with multiple APs in one piece of hardware, reducing the overall amount of hardware you need to deploy in your hotel. This allows your IT staff to spend less time maintaining the network; and when the time comes to upgrade your hardware to future wireless technologies such as 802.11ac – it’ll mean less time for your IT staff to make the changes.

Less time for them, means a bigger return on investment for you.

New wireless technologies have also enabled innovative hotels to increase revenue by:

  • Providing tiered business services offering higher bandwidth for paying guests.
  • Advertising to guests within a specific proximity of the hotel, such as a restaurant or retail store.
  • Providing Wi-Fi offload for tier-1 carriers such as AT&T and Verizon.

There are already hotels employing a tiered Wi-Fi service by offering free Wi-Fi to all guests, but charging those that need more bandwidth for streaming movies on Netflix or video conferencing with their clients – creating up to $1 million per year in additional revenues!

But if you’re going to charge your guests for Wi-Fi, it’s imperative that you make sure your network is capable of handling those high bandwidth applications or else they’ll just complain and demand their money back – putting you right back in the position of losing revenue.

The case for ROI

Take a moment to consider all the tangible reasons I mentioned above for lost revenues due to your poor wireless network: lost bookings, waived fees, and maintenance costs.

Then think for a moment how the customer experience at your hotel measures up if Wi-Fi is the most important amenity that your guest requests.

What about your future lost opportunity costs from not being able to take advantage of additional revenue channels that other innovative hotels are implementing?

Have you considered archaic hotel processes you won’t be able to automate or streamline? Lost technological opportunities? Lagging customer experience compared to your competitors?

Now consider that it only costs on average $25,000 for a wireless network capable of solving all of these issues, and ensures that your hotel is prepared for the future.

The cost doesn’t seem so high anymore does it?

A recent Motorola case study featured The Bicester Hotel, a 52-room hotel that estimated their losses from lost bookings to equal $120,000 a year. If a high-end hotel Wi-Fi network costs just $25,000, they could recoup capital expenses in just 3 months with a ROI of 480%, which is only considering lost bookings! Imagine the return on investment if they factored in all the other ways they could be making money.

Many hotels are already imagining the future potential of a powerful and advanced wireless network to improve customer experience and hotel efficiencies.

  • Automatic climate and lighting control based on the guests’ preference at check-in.
  • Check-in, check-out, and room selection automation.
  • Mobile connectivity to various hotel departments such as housekeeping, room service, and IT so the guest can put in requests instantaneously.
  • Ability to send live updates to guests about promotions and events related to the property.

Imagine your guest being able to experience all the aspects of your hotel right from their mobile phone. With wireless technology advancing and mobile apps booming, it isn’t so far-fetched.

“While other brands can add products and services simply to match competitors, hotels that develop new products and services often lead their respective markets.” (Market Metrix, 2013)

The tipping point has come and the time to invest in your wireless network to prepare for the future is now.

What will you do?




15 thoughts on “The ROI of Great Hotel Wi-Fi

  1. Since a smaller number of on-demand movies would be purchased through the hotel, it would be interesting to see how this works out when accounting for lost “in-room” movie revenue.

    • Excellent question Jason! Thanks for your comment. Hopefully some hotelier’s will stop by and take an educated stab at addressing the “in room revenue” debacle. In the mean time, we’ll keep an eye out for any stats on in room entertainment.. Cheers!

    • That could be a case where the hotel offers access to higher bandwidth so people can stream from netflix, as long as they pay an additional fee. Essentially it could replace on-demand in the hotel and possibly all the costs associated with maintaining all that equipment. If that was the case, the lost in-room revenue for movies wouldn’t be that significant.

  2. So glad to see this.

    As someone who works online and travels frequently, wifi is my bread and butter. I’d even do without clean towels at my own home if it meant I had good internet access.

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  7. It is the unspoken customer that is the real loss – and the frustration
    is where the hotel and the ISP are at odds when the solution can’t track
    and control traffic distribution: it only takes 1 torrent at 100%
    upload to take down a unregulated system. The real loser in this scenario is the customer: even if the Admin/Wireless consultant of the hotel or the ISP figure out the problem, rarely do they resolve it when the customer needs it most (now!)!

  8. Xirrus excels in this category. Even hotels that have adequate throughput, IT infrastructure, and wireless penetration (which is rare) fall down because their access points can’t handle more than 30 simultaneous connections each. I like that the Xirrus gear can be upgraded and expanded upon without being replaced. We are future-proofing our clients with 10GB structured fiber/copper networks and Xirrus.

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