Tuesday, 11 August 2009

Hotel Internet Charges Are Iniquitous

100 AEDImage by Moha' Al-Bastaki via Flickr

One thing that has long annoyed me is the widespread practice of charging hotel guests for Internet access. Apparently European hotels are starting to realise that this is not actually funny, clever or mature but here in the Middle East, every hotel I have visited so far has charged guests - typically Dhs100 per day or the equivalent. In Europe it's typically 20 Euro, in the UK £20 and even in the US up to $20.

And this despite the fact that access to the Internet is equivalent to the provision of a utility - some 47% of guests in surveys confirming that free Internet access was an influencer on their choice of hotel.

But it's not just the fact that they charge. It's how MUCH they charge.

At hotel rates, you're paying the equivalent of Dhs3,100 ($850) per month for Internet access. If you apply the common hotel markup of five times cost, you're still looking at Dhs620 ($169) a month.

To put that into perspective, Etisalat's most expensive BusinessOne Internet package, a 4Mbps access speed and unlimited usage, comes in cheaper at Dhs2795. And for one sixth of a hotel's charges for a month's worth of Internet, Etisalat will give you 4Mbps domestic Internet, telephone and television.

So here's a friendly hint for the UAE's hoteliers and, in fact, hoteliers the world over. Chaps, when Etisalat looks good in comparison to your business, it's time to rethink your business.
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KJ said...

Your last paragraph says it all

Mita said...

"More expensive than Etisalat" has to be an impossible feat and should really send alarm bells to all hotels in UAE.

I also do not understand why wireless Internet can be free in hotel lobbies but not available in the rooms. Its not rocket science any more.

ghoonk said...

Some points:

a. IIRC, businesses are not supposed to resell Etisalat services without explicit permission from Etisalat. It's not as simple as just getting a fixed broadband service, hooking it up to a couple of routers (wireless or otherwise) and charging. The hotel also needs to have a system in the backend to charge, and Etisalat doesn't have anything to do with that. Unless, of course, the hotel has some sort of revenue sharing in agreement with Etisalat -- who knows? :)

b. As always, these observations/complaints about expensive/bad service will fall on deaf ears. If they ALL ignore complaints long enough, they figure that people will just (a) go away, or (b) shut up and pony up.

ghoonk said...

@mita: My guess on how the hotels are thinking:

It's a simple business proposition, methinks. If, as a business user, you're comfortable enough to walk downstairs every time you need to surf the web, check your email, instant message, or have a PC-to-PC chat with colleagues over VoIP, they aren't stopping you.

But if you want the convenience of doing all that in the privacy and comfort of your hotel room, then it's a value proposition you should pay for.

Not all hotels offer free WiFi access in the lounge either, though I know some in the Dubai Media City that offer free WiFi access (for the day) if you are using their conference rooms -- you just have to ask the conference management guys for the access code to get past the walled garden

Doug said...

Really, hotels should consider internet provision in the same way they consider TV provision. Almost all hotels have a TV in-room with channels that are free to watch. These are usually supplied via cable, which means the hotel incurs a cost to supply the channels to the guest.

There's no difference between this and providing internet access. In fact, the example shows how ridiculous this dichotomy is - after all, the hotel not only provides you with TV channels free of charge, but also a TV!

Imagine a hotel than not only provides free internet access but also a free laptop/netbook in your room for the duration of your stay - it seems far-fetched but it's totally in keeping with current hotel room facility provision.

ghoonk said...

It's say that's mostly true. FTA channels are free, so hotels may not pass the cost over to their guests. Or they may be paying a fixed fee for FTA channels (licensing) and incorporating the charge into the room rate, like what they do with the 'standard' utilities (I'm sure they've figured out how much to add to a room rate for air-conditioning, water, sewerage charges, etc).

I'm suspecting that they don't just 'bundle' WiFi/Internet access into the room rates because not all their guests use rates, and possibly compounded by the likelihood that they haven't figured out the right number yet.

Or maybe they've just figured that if you want it badly enough in the room, you'd just pay for it :)

Don't get me wrong guys, I'm very much in favour of hotels seeing this as a utility and offering it at more sensible rates!

Oussama said...

First thing I look for when I want to book a hotel room. The only encouraging thing there are a lot more hotels offering free internet and some are reducing it to 10$ a day or less.

Seabee said...

These kind of things have long been a good profit source for hotels, especially from business travellers. Telephone and laundry charges for example are outrageous and bear no relation to their actual cost to the hotel. They charge as much as they think they can get away with.

Short term thinking, not a good marketing move but all too many businesses operate that way.

Brn said...

The thing that I always thought was fascinating, at least here in the US, is that the more expensive the hotel is, the more likely they are to charge you for internet access. If you are paying $150+ a night for a room, it would be "internet access would be $20 a day". If you are paying $45 a night for a room, then "please enjoy our free wireless access, sir". That always seemed completely backwards.

Grumpy Goat said...

My two fils: At the Best Western in Boston MA last week, the blisteringly fast WiFi in the room cost nuppence. This was just as well, given the room and an atrocious continental breakfast cost $160.

Doug said...

I will say some hotels are quite switched on though. The Premier Inn at DIP is essentially a glorified Travelodge in the middle of nowhere but it does have free WiFi.

Anonymous said...


I work in hospitality IT and hotels are charged much more than businesses. 2 mbit unlimited is approx 15,000 AED per month (no joke) with either du or etisalat.

Plus think about the lost business:
A Hotel guest uses the internet for:
- telephone (skype)
- movie rental/download (iTunes)
- music downloads
- radio
- news/magazines
- naughty stuff

which replaces the hotels profit centers:
- pay tv
- telephone system
- newspaper shop

People travel now with their content and this is just the beginning....

So long,

Alainet said...

Free hot spots should be free everywhere ... the concept of information spread should be as easy as getting it anywhere...

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