Hyatt the largest hotelier to offer all guests free WiFi

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Hyatt Hotels next month will begin offering guests unconditional free WiFi in guestrooms and public spaces, becoming the largest U.S. hotelier to do so.

Hyatt will include free WiFi at all its hotels worldwide, "regardless of booking method or loyalty program participation," the company announced. In addition, Hyatt said guests will not be limited in the number of devices they can use with the free service, and the wireless Internet connections will be available in hotel rooms and in public spaces.

"Giving free WiFi without a catch will enable us to continue innovating the guest experience to help people be more productive and stay better connected to colleagues, friends and family," Kristine Rose, Hyatt's vice president of brands, said in last month's announcement. "Travelers feel out of sync with their lives when they can't freely connect."

Hyatt had already provided free WiFi at many of its brands as well as to loyalty members.

Starting in February, loyalty members will receive a free upgrade to higher-speed "premium" WiFi service at hotels where that amenity is available.

In-demand amenity

The subject of free WiFi at hotels has gained relevance as a growing number of guest surveys have indicated that an ever-increasing percentage of travelers list it as one of the most desired amenities at a hotel.

Guests polled by Expedia's Hotels.com division last year said free WiFi was the most vital in-room amenity and the second most important on-site hotel amenity after a complimentary breakfast.

Further putting the issue front and center is the growing ubiquity of WiFi access. Coffee-shop giant Starbucks has long offered free WiFi at its 21,000-plus outlets worldwide, while cities such as New York, San Francisco and Tel Aviv have enacted programs to make free WiFi access available throughout much of their municipalities.

Against that background, more hoteliers are offering free WiFi as a way to entice guests. Luxury hotelier Loews Hotels & Resorts, which had been charging $15 to $20 a night for in-room WiFi access, early last year scrapped those fees and now offers free WiFi at its 21 North American properties. Ace Hotel, Yotel and CitizenM are among smaller chainlets offering the same amenity.

Additionally, many hoteliers running more moderately priced chains of the select-service variety have included free WiFi as a way to better position their properties with the value-conscious traveler.

Those chains, which benefit from lower staffing levels and space requirements than full-service properties, include InterContinental Hotels Group's Holiday Inn and Holiday Inn Express properties in North America as well as Choice Hotels International's Comfort Inn and Comfort Suites hotels.

Motel 6 rolled out WiFi chainwide in 2008, and while some properties offer it gratis, many continue to charge the $2.99 nightly fee instituted upon its launch.

Reservation requirement

Still, the larger U.S. companies with a substantial stake in the upscale, full-service sectors continue to make free WiFi conditional on the method used to make a booking or a guest's loyalty-program status or both.

In October, Marriott International, the largest publicly traded U.S. hotelier, said that starting Jan. 15, it will provide free WiFi at its full-service hotels (Marriott, JW Marriott, Ritz-Carlton and Renaissance) for Marriott Rewards loyalty members who book through Marriott's in-house reservations service, either by phone or online. The company's select-service brands already offer complimentary WiFi.

That announcement spurred opposition from travel agent groups such as ASTA and Signature Travel Network, which protested that the policy put guests who booked hotel reservations through travel professionals at a disadvantage.

Meanwhile, last month, Starwood Hotels & Resorts announced that it would start offering free WiFi on Feb. 2 for loyalty members who book directly through Starwood's digital channels.

But in Starwood's case, the company is also extending free WiFi to guests who book through travel agents who participate in the SPG Pro program that Starwood launched in October specifically for travel agents and meetings planners.

A representative with No. 2 U.S. hotelier Hilton Worldwide said that the company offers free WiFi to members of the top tiers of its loyalty program as well as to all guests at select-service badges such as Hampton Hotels and Homewood Suites but didn't say if the hotelier would further adjust its WiFi policy.

Whether Hyatt's larger U.S. competitors will follow Hyatt's lead by further tweaking or broadening their free-WiFi policies remains in question because of the challenges involved in both persuading owners of the hotels to give up that revenue stream and tweaking the business models of full-service properties.

For example, more than half of Hyatt's 573 properties are select-service hotels such as Hyatt Place and Hyatt House, which already offer free WiFi, whereas just 187 of Starwood's 1,200-plus hotels fall under the company's Four Points, Aloft and Element select-service brands.

"We can only comment on our own initiatives, and we are confident our SPG members and travel pros will be happy to have this new benefit in the new year," Starwood spokeswoman Maire Griffin said when asked to comment about Hyatt's new policy.

Additionally, Hyatt's size is just a fraction of Marriott's or Hilton's size; both companies have more than 4,000 properties globally, more than three times that of Starwood.

The ownership issue

There is also a substantial difference in the percentage of the flagged hotels each company owns as opposed to simply manages.

Hyatt owns or leases about 15% of its properties outright, while Hilton owns about 3% of its properties. Marriott doesn't disclose how many properties it owns, but earnings reports reveal that just 7% of its revenue is generated by "owned, leased and other" properties.

Ownership is a major issue, because about 90% of whatever revenue is lost by offering free WiFi will be borne by the hotel owner, not the branding or management entity, according to Bjorn Hanson, clinical professor and former dean at New York University's School of Professional Studies Preston Robert Tisch Center for Hospitality, Tourism and Sports Management.

And while room rates continue to rise as a result of higher demand, Hanson said that folding the fee into the room price isn't always easy, as just a $2 difference in room rates can sway a guest from one hotel to another.

Nevertheless, Hanson called Hyatt's policy change "a bold move," adding, "I anticipate others will follow, but not immediately, and with some nuances."

A Marriott representative did not respond to a request for comment from Travel Weekly.

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