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Galt House: Who Should Get Free Wi-Fi?

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June 01, 2012
CIO/CFO Column: What Keeps Me Up at Night
Ron Strecker

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Who should get free Wi-Fi? For starters, it shouldn't be bargain hunters using opaque OTAs and those who wait until the last minute looking for a deal in Louisville for the Kentucky Derby–like some magazine publishers.

While I don’t have CIO in my title I can show proof that I received the 33rd CHTP designation awarded by HFTP. Technology deployment has been a constant part of my job for most of my more than 30 years in hospitality, and even more so in my current role with the company that owns the Galt House Hotel in Louisville, Ky.

With its 1,300 guestrooms and 120,000 square feet of meeting space, the Galt House received its last Wi-Fi network upgrade in 2007.  Remember 2007?  Back then there were no tablets, smartphones were brand new but very expensive, and most laptops didn't have built-in Wi-Fi.  Generally, we had customers that seldom complained about our free Wi-Fi.

Within three years of that investment, we saw a growing trend of dissatisfied Wi-Fi users. We knew it wasn’t the price, because it was free.  It was the explosion of demand in excess of the 20MB capacity of our gateway, and more guests with more Wi-Fi devices.  It didn’t take long for us to realize that we were going to need to make some big changes and it was not going to be cheap.

The timing was good since we have made a strategic decision to migrate to a unified communications platform by the end of 2013.  Many pieces of this project became enablers for future phases of this plan but we set one key goal that had to be met:  No more guest complaints about weak Wi-Fi signals. 

Additionally, we wanted to create a flexible environment that serviced four key areas: public spaces and outlets, guestrooms, meeting space and back of the house. Adding coverage for back of the house areas was an expansion of the existing network but was an absolute necessity to overcome dead zones in a building built of reinforced concrete.
I put my CFO hat on and had a serious conversation with my CIO alter ego and Walt Zaleweski’s team from DCI who handle our infrastructure maintenance and operation of voice and data networks (he’s my CTO).  As CFO, I was responsible for determining the ROI and presenting the project to our board of directors.

The very first obstacle was the issue of free Wi-Fi.  The Galt House competes with convention hotels in town flying Marriott, Hyatt and Hilton flags.  The properties charge for Wi-Fi so a decision was made back in 2005 that we would offer it free as a competitive advantage.  However, our Wi-Fi network had become so choked that it was a free amenity that was driving business away.

If we were going to invest in a Wi-Fi experience for our guests that wanted to do streaming video or data intensive VPN sessions then we felt it was reasonable to offer higher speeds for a modest fee. In our guestrooms we have offered two bandwidth tiers at two price points, and if you purchased this service, it follows you everywhere throughout the facility. We would still offer some free service, but only in our public spaces and outlets and it would not be high speed, but more like a moderate DSL speed. After all, we don’t want our guests spending all of their time in the guestrooms.

So what keeps me up at night?  Who should get free Wi-Fi?  My first response is why should anyone get it for free? I’ve read the commentary that we should just raise our rates and include free Wi-Fi. What hotel is going to be the first to do that?

 Yes, there are chains out there that offer free Wi-Fi, but read the fine print.  Is it free in the guestroom?  Is it faster than tethering a 3G phone to your laptop? How’s the signal when the hotel is busy? Still, there must be something that we can get from the guest in exchange for access to a free Wi-Fi signal. For the guest, free means no cost, but they measure cost with dollar signs. We think we found a simple solution: To get a free signal in our public spaces, a guest can exchange his or her name and email address with us. This is something that marketing really likes, and since the free zone is available in our outlets as well as the public spaces, and not in the guestroom, we create the opportunity to sell something else.  In this situation, free to the guest creates additional marketing contacts. And the best part, it doesn't cost a penny.

Opportunities abound to take the perceived value of free high-speed access and turn it into an incentive to reward guests for their loyalty: How about an access code for free high speed with the purchase of an appetizer with your drink? And if the guest wants to stay in their room and stream movies, then let them. A modest fee for the right bandwidth will still cost less than an in-room movie. 

Now if I could just decide who has the best unified communications platform for hospitality – Microsoft or Cisco.

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