Travel’s biggest rip-off to end soon?
“In 10 years, all hotels need to be offering free Wi-Fi.”
Don’t take it from us. That’s the forecast from one of the world’s biggest hotel chains -- InterContinental Hotels Group (IHG).
Don Berg, vice president of loyalty programs and partnerships at IHG, continues: “More people expect free Internet -- a tipping point is occurring.”
A survey by HotelChatter.com shows that 64% of hotels worldwide now offer free in-room Wi-Fi.
That’s good news for travelers who like to Tweet, Instagram, Vine or update Facebook as soon as they land in paradise.
Hotel Wi-Fi rates have been expensive for years, with day fees from $5.95 in lower-end hotels and up to $30 in luxury hotels.
Travelers are demanding a change.
HotelChatter.com’s survey found 43% of travelers wouldn't choose a hotel if it didn’t offer free Wi-Fi.
The fussiest tourists were from China, with 70% saying they'd snub a hotel without free Wi-Fi, with Indian and Russian tourists at 58% and 48%.
IHG, which manages 4,600 hotels globally, rolled out free Wi-Fi to the Elite level of its rewards program from July 1, and will do so for all loyalty group members by 2014.
Hilton, Best Western and Marriott now offer free Wi-Fi in some of their brands. It’s even available in IHG’s budget line of Holiday Inns.
So what took the luxury hotels so long?
“We charged for it because that’s the expectation of the industry at that price point,” Berg says.
You might think a $300-a-night room should include free Wi-Fi; hoteliers know that if someone pays that rate, they’ll most likely shell out $15 – or 5% of the room rate -- for in-room Internet.
Or they’ll throw it onto their business expense account.
“Wi-Fi is a revenue stream and to offer it free is to lose that stream,” says Berg. “However, we believe the incremental loyalty we receive will offset the lost revenue.”
High-speed Internet for streaming video and downloads is still a paid-for service at IHG.
International hot spots
It’s not just hotels chasing the wired traveler.
According to research from mobile advertising platform JiWire, the number of global Wi-Fi hotspots has tripled since 2009, but only about 20% are free to use.
As the world’s most connected country with over 83% of its population on broadband, South Korea leads the way.
Homegrown tech giant LG subsidizes a nationwide free network, and in Seoul, free Wi-Fi is available on taxis and subway trains.
The United States is also Wi-Fied up -- according to JiWire, 81.7% of its 183,000 hotspots across shops, restaurants and hotels are free.
“There has been a global increase in the shift from paid to free Wi-Fi over the last few years,” says JiWire president David Staas.
“What’s driving it is that more consumers are making purchasing decisions based on whether that shop, hotel or airline offers free Wi-Fi.”
In the UK, central London is covered by Wi-Fi network The Cloud, free to access after registering online.
The London Underground has it, too, for customers of mobile operators Virgin Media and EE, as do many of the city’s black cabs.
The only price is 15 seconds of ads per 15 minutes of Wi-Fi.
“Providers of public networks will always look for ways to make money on their investment -- but it’s clear now that paying for access up front doesn’t work,” says James Atkinson, editor of Wireless magazine in the UK.
Instead, business models depend on advertisers or venue owners sponsoring a network.
For example, U.S. retail giant Target started rolling out free Wi-Fi in December.
“Not only did it encourage customers to enter the store,” Staas says, “it also allows the store to push promotion ads directly to customers’ devices.”
The travelers’ special
Visitors to Taiwan can register for the island’s free iTaiwan Wi-Fi by presenting their passports to tourist offices at the airport and Metro and train stations.
The bandwidth of 1Mbps allows for emails, navigation and web surfing.
In Tokyo and Kyoto, tourists can show their passports in exchange for Wi-Fi cards that allow up to 14 days free Internet on the city streets.
They can even head underground -- Tokyo Metro is trialing free Wi-Fi in selected stations from July.
The tiny island state of Niue, near New Zealand, is covered in free Wi-Fi, while Tallin in Estonia is a secret techno-hub -- it’s had citywide free Wi-Fi since 2005.
In the air
There’s a smaller, but growing, expectation for airlines to offer free Wi-Fi too, especially for business travelers.
This could explain why airlines that currently have Wi-Fi are charging prices from $2.75 per 5MB or around five web pages (Emirates) to $11.95 per hour (Japan Airlines).
In January, Norwegian Airlines became the first airline in the world to offer free Wi-Fi access on all European flights, while various other airlines have been flirting with the idea.
“We believe free Wi-Fi will attract more customers,” says Norwegian Airlines spokesperson Lasse Sandaker-Nielson. “Half our passengers use the service on average, and on flights to Spain up to 80%.”
So why now?
“There are two things that will drive free Wi-Fi in more countries -- first, more smartphone and tablet users, who choose venues with free Wi-Fi over those that don’t,” Staas says.
“Then, venues realizing that free Wi-Fi helps them engage with customers for better sales.”
Right now, the world’s largest mobile operators are forming alliances to create so-called Next Generation Hotspots, which will recognize customers’ phones and automatically sign them into a free Wi-Fi network.
In the United States, AT&T is testing these hotspots in selected Starbucks outlets, to roll out globally in three to four years.
“Once it takes off, we should be able to roam the world and get on an alliance country’s Wi-Fi network without needing to log in or pay,” Atkinson of Wireless magazine says.
An additional fee would likely be worked into existing smartphone tariffs.
Already some U.S. luxury hotels offer apps that connect to hotel Wi-Fi to let you customize your stay or order room service from your smartphone.
Staas also predicts the speed of free Wi-Fi networks will reach home broadband quality to keep up with increasingly data-intensive devices.
After all, being able to stream the latest episode of “Game of Thrones” could decide the next hotel you stay in.
Gadgets for low-cost Wi-Fi anywhere in the world
In Spain, tourists can order these portable hotspot devices to be delivered to their hotel.
A WiFiVox uses a local data SIM that transmits a cellular signal into a Wi-Fi signal shareable by 10 devices. At EUR6.99 ($9) daily flat rate, it’s helpful if you’re traveling in a group.
Aimed at business travelers, this gadget supports up to 10 SIM cards from different countries and will automatically choose the right one when you land. Then you get local rate 3G Internet, converted into a Wi-Fi signal you can use for five devices.
At EUR249 ($320) for the device, a EUR9.90 ($13) monthly fee plus a daily fee of EUR5.90 ($7.60) for 1-3GB of data, this is one for the very frequent flier.
Your own smartphone
Nowadays, the simplest solution for leisure travelers is to pick up a pay-as-you-go SIM card that includes Internet when you get to your destination, then pop it into your smartphone -- most newer models can open Wi-Fi hotspots.