Happy New Year! Somebody finally got it.
Hyatt Hotels is ringing in the new year by offering free WiFi for all its guests at all its hotels (OK, technically it launches in February).
And if you're waiting for the disclaimer, there is none. Doesn't matter how you book, what medal-hued loyalty status you may have or which Hyatt chain you're booking with. Once you check in, you can log in, gratis.
Seems like a simple concept. Unfortunately, it's been anything but. Sure, smaller, newer, millennium-driven chainlets like Ace Hotel, Yotel and CitizenM already give guests free wireless Internet access (or risk their tech cred if they don't). But Hyatt will be the most prominent U.S. operator to unconditionally expand the concept throughout both its full-service and select-service brands.
"Internet connectivity is no longer an amenity," Hyatt Vice President of Brands Kristine Rose said in last month's statement announcing the new policy. "It has become an integral part of travelers' daily lives and a basic expectation."
It's a subject that's recently gained relevance as more hoteliers address what's become a pet peeve among a growing group of travelers. This past April, travelers polled by Expedia's Hotels.com unit pegged free WiFi as the third-most desired in-room hotel amenity.
Still, some hoteliers won't take the full plunge. In October, Marriott International, which already offers free WiFi at select-service brands like Courtyard by Marriott and Residence Inn, said that this year it would expand that policy to full-service badges such as JW Marriott, Ritz-Carlton and Renaissance as well as its flagship brand.
The catch is that those full-service hotel guests would need to be Marriott loyalty program members who book directly through Marriott channels (i.e., Marriott's websites or call centers). People booking through online travel agencies (OTAs) or through agents are left out. And that last part got Marriott into hot water with agent trade groups.
Starwood Hotels got closer to the mark last month by saying that, as of Feb. 2, all hotels would offer loyalty members booking through Starwood's digital channels free WiFi. That offer was also extended to loyalty-member clients of travel agents who participate in Starwood's SPG Pro loyalty program specifically for travel professionals. Still, if you book through an OTA or you're not a loyalty member, no soup for you.
But Hyatt's policy change also addresses the larger issue of consumers having to read the fine print as they spend more and more on travel. Last year, U.S. hotels were projected to generate about $2.25 billion on "extras" such as room-service delivery fees, cancellation charges, business center fees and, yes, WiFi charges, according to New York University's Preston Robert Tisch Center for Hospitality, Tourism and Sports Management. That dollar total is up about 45% since the recession depths of 2009.
Then there are the airlines, whose ancillary charges for items such as onboard meals, extra legroom and preferred boarding have grown from cottage-industry status to more of the mansion variety. Consultant IdeaWorks pegged 2013 global airline ancillary revenue at $31.5 billion. And while the true ancillary fees number is unclear (IdeaWorks includes the sale of frequent flyer miles in its total), any frequent flyer can attest to the carriers' nickel-and-diming proclivity.
In fact, the proliferation of such fees spurred low-cost carrier stalwart Southwest about five years ago to turn that negative into a positive with its Bags Fly Free ad campaign.
Still, even that policy has its proverbial asterisk, forcing travelers to jump through hoops to avoid getting dinged. Case in point is my witnessing a harried holiday-season traveler at Southwest's LAX counter frantically moving stuff from her suitcase to her carry-on to avoid being charged for having a bag that weighs more than 50 pounds (stand-up comedian Sebastian Maniscalco concludes a bit on that scenario with the exasperated punch line: "What's the difference? It's still going on the plane!").
Meanwhile, some newer ride-hailing services that have venture capitalists' hearts aflutter are forcing prospective riders to also read the fine print, albeit on their smartphones. Uber, which can't get through a week without alienating someone, has gained some infamy for its so-called "surge pricing," where standard rates usually comparable to taxicab fees can double or quadruple during periods of high rider demand within certain geographic areas.
Uber justifies the practice (Uber could make pretzels with some of its justification methods) by saying surge pricing is a way to lure heretofore dormant Uber drivers into their cars to meet increased demand. That policy backfired late last month when Uber rates quadrupled for folks looking to flee central Sydney during the early hours of a hostage crisis that killed three. Uber eventually gave free rides to the ride-hailers, refunded those who were charged and subsequently made a public apology. Still, it's enough to make someone wistful for a grumpy cabbie and his (or her) flat fees and standard per-mile rates.
Which brings us back to the WiFi fee issue, where "surge pricing" doesn't quite describe how some hotels are practicing tiered rates for their wireless Internet access.
Last month, one traveler to France notified the U.K.'s Daily Telegraph of Cannes' Majestic Barriere hotel's attempt to charge him 300 euros ($365) for 24 hours of WiFi. (It must be something in the water in Cannes; a couple of years back, I opted for the free WiFi in the lobby of the InterContinental Carlton rather than fork over $35 a night for in-room Internet access.) As for the Majestic, that bill was adjusted down to the "basic" $11 nightly WiFi fee, with an explanation that the top-tier WiFi was created for the (obviously loaded) folks who want super-fast downloads and streaming during the Cannes Film Festival. That's more than a grand for a three-night stay. For hotel WiFi.
Granted, here in the U.S., hotel profits continue to rise, signaling that hotel owners and their brand/management partners are having an easier time hitting budget numbers with less dependence on high-margin WiFi fees. PricewaterhouseCoopers in November forecasted that U.S. hotel occupancy this year would hit about 65%, a 30-year high.
Meanwhile, through September, U.S. room rates, which usually translate more to the bottom line than occupancy increases, rose 4.6% from a year earlier, to more than $116 a night, according to STR. And that's helped out companies like Hyatt, whose revenue through the third quarter is up almost 8% from a year earlier, to $3.34 billion (net profit is down because of year-earlier gains on real estate sales).
Is it fair to criticize companies like Marriott, Hilton and Starwood for not (yet, at least) taking the same free WiFi stance as Hyatt and forcing guests to keep looking at the fine print? That's debatable, since a far larger chunk of Hyatt's hotels are select service than are Starwood's and therefore already structured from an operational and cost standpoint to provide free WiFi.
And Hyatt's 573 hotels worldwide are just a fraction of Marriott's and Hilton's, each of which exceeds 4,000 properties globally (Starwood has more than 1,200 hotels).
Still, Marriott's net income through September rose 17%, to $556 million, while Hilton's jumped 31%, to $523 million (Starwood's net income was down 21%, though it still generated $399 million in profit), indicating that there's more wiggle room than ever for hotels to provide their full-service guests an amenity that's standard for select-service properties, not to mention for cafes, all over the world.
And when it comes to free WiFi, travelers are hoping that more hoteliers will make the connection.