J.D. Power and Associates recently released its 2010 North America Hotel Guest Satisfaction Index Study which is based on responses of more than 53,000 guests who stayed in a hotel between May 2009 and June 2010. This article focuses on Hotel Guest Internet Demands.
In today’s digitally connected world, guests’ desire for access to the Internet during their hotel stay continues to be strong. Whether it is to connect a mobile device or iPad to Wi-Fi or to connect a laptop to access work files or to download a television show or a movie, guests indicate their most important hotel amenity is wireless Internet access. This is the case in nearly every segment, with the exception of the mid-scale limited service segment, in which the most important amenity remains complimentary breakfast.
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In the J.D. Power and Associates 2010 North America Hotel Guest Satisfaction Index Study, 77% of guests indicate the in-room Internet connection they use is Wi-Fi, compared with just 55% in 2007.
Approximately 55% of hotel guests in this year’s study stayed at a hotel whose brand advertises free Internet connection for all guests. Among brands that do not offer this service free to all guests at every property within their brand, fees range from US$4.95 for the entire guest stay to as much as US$20 per night (24-hour period).
Offering complimentary Internet access varies greatly by segment. While it is limited in the luxury and upscale segments, most brands in the midscale limited service and extended-stay segments include Internet access in their room rate.
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It makes sense that guest satisfaction is much higher when Internet is complimentary, as the chart below on the left illustrates. There is not much disparity in the satisfaction level with the connectivity provided in either case.
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Where we have seen brands get into trouble in the study, however, is where they are not providing a quality Internet connection and one which is widely available throughout the property. The issues are further compounded if a guest is paying for the Internet, as expectations are greater when a guest has paid for something rather than when it is complimentary.
We see similar expectations and satisfaction performance in the airport and airline experience which we also cover—travelers who may have endured delays in baggage claim in the past and grinned and bared it, for example, are far less forgiving of delays or other baggage issues when they are paying for it as reflected in their satisfaction scores.
With the wide availability of the Internet and Wi-Fi seemingly everywhere—at a Starbucks, McDonalds, even at Denny’s—it may appear unseemly or at least unwise to charge for Internet, but it is still an important revenue stream at the upscale and luxury segments.
While charging for Internet may come at a satisfaction cost, the revenue streams likely outweigh that trade-off, at least for now. As long as a leading brand does not break rank, guests are likely to keep on paying even if they don’t like it. We see acceptance of fees travelers don’t like in the airline industry with checked bags as an example.
However, time will tell if guests start leaving your property for more than a cup of coffee, a Big Mac or a Grand Slam breakfast and the free Wi-Fi that comes with it. Will they head down the road to a brand in another segment scale where the Internet is free next time? While cost is often the focus, the importance of convenience and how a guest feels a brand is treating them in being charged for the Internet, should not be overlooked.
Given the economy, it is understandable that hoteliers are holding onto every revenue stream they can. Time will tell however, if the Internet can remain a viable revenue stream for upscale and luxury properties when it is available for free almost everywhere else. Will guests turn against brands that charge for Internet at some point? Or perhaps there will be technology innovations that render the need moot? It will be fascinating to see how the dynamic plays out.
What’s for certain is that guest satisfaction remains a constantly moving target as our founder, J.D. Power, observed, “You can never declare victory.”
Stuart Greif is VP and general manager of the global travel and hospitality practice for J.D. Power and Associates.
No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate
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