Fair Wi-fi: Are service providers to blame for hotel rip-offs?

A lack of knowledge and resources across the hotel industry means many hoteliers are turning to technology partners and service providers to install and manage their guest wi-fi access.

And while service providers are naturally chasing profits many critics of wi-fi pricing suggest the hotels' relationships with these companies are to blame for 'rip-off' wi-fi prices.

But it is far from being so clear-cut.

Some of the most expensive wi-fi charges are actually imposed by hotels that manage their own networks and billing, according to James Saunders, marketing director for hotspot provider and wholesaler The Cloud. His company works with a number European hotels including some in the Best Western chain.

Unfair wi-fi...

Don't just take our word for it, read what the editor of The Good Hotel Guide had to say on the matter by clicking here.

Saunders told silicon.com: "Many hotels don't want to get involved and want to pass the whole thing on to somebody else to install and manage."

For those hotels still scrambling to understand the need to offer wi-fi - and which lack the resources, know-how or even the inclination to provide it themselves - the partnering route is an effective way to get up to speed quickly.

However, some service providers have been accused of charging over the odds for internet access at the hotels they work with.

One company whose pricing has come in for criticism from silicon.com readers is SwissCom, a major partner of many European hotels.

silicon.com reader Trevor Lee said: "Beware hotels in Europe partnering with SwissCom to provide wi-fi." Lee cited charges of €21 per hour on his travels, adding: "Now that is a rip-off."

A spokesman for SwissCom told silicon.com: "Selecting a professional service provider certainly remains the preferred option for most hotels."

As such those hotels - and their customers - are at the mercy of the service providers' charges.

However, addressing accusations of overcharging, the SwissCom spokesman claimed the company has a "fair value for money policy", where higher charges are justified by a perceived high quality of service among its users.

He said: "We are convinced users are able to tell the difference between standard and premium internet and ready to pay for the difference."

The problem is further exacerbated when a profit-sharing agreement exists which sees the hotel and service provider both add a mark-up to the cost of providing the service.

With regards to whether hotels are ripping off their customers, this is perhaps the least defensible arrangement when the hotel has done nothing to install or manage the network but still insists on making money in return for little or no investment in its customers.

Furthermore, many hotels are also imposing high charges on customers even when they own and manage their own networks and have no profit-sharing agreement in place.

These hotels could choose to swallow the costs - comparable to around €10 per room per month - in return for the tangible and intangible benefits of greater customer satisfaction. But some are charging guests more than £50 for a few hours of internet access.

It's not a situation that paints those hotels charging over the odds in a good light. Service providers have to make money from wi-fi access - and many still manage to do so while undercutting hotels. The latter could simply approach provision as a value-add but choose not to.

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