The business of hotel WiFi

I recently went to an event launching WiFi at all Tsogo Sun properties around the country. Press release blurb starts here:

In its ongoing quest to create great experiences, Tsogo Sun has installed high speed quality connectivity Wi-Fi in all its hotels that is free up to a varying data limit per room per day, depending on which grade of hotel the guest is staying in.


In Tsogo Sun’s Deluxe hotels, 750MB is free per room per day to in-house guests; in Southern Sun hotels, the cap is 500MB per room per day; in Garden Court hotels, the cap is 350MB per room per day; and in StayEasy hotels, the cap is 250MB per room per day. In all the hotels, these data limits are limited to a maximum of three devices per room. The free high speed, quality connectivity Wi-Fi service was launched in Tsogo Sun hotels at the start of June 2013, setting a new Wi-Fi standard in the hospitality industry in South Africa.

I think it’s a great move by Tsogo and while it might initially be painful it’s a step in the right direction. Tweeting about this led to an interesting debate: surely WiFi in a hotel is akin to having towels? Well the counter argument has two points:

  1. WiFi has always been a profit line item for a hotel. Suddenly you’re looking at tens of thousands of rands lost per month. That’s not insignificant in this economy.
  2. Not everyone uses the WiFi so surely it’s being subsidised for those that use it by those that don’t? Why should there be a small charge on my room for something I’m not using?

In the US WiFi is fairly common in hotels yet in Europe this isn’t always the case. After spending six months selling a hotel product related to marketing I can say that hotels only care about two things: Can you make more money or lower costs. WiFi doesn’t really fit either of those short term but it’s definitely a longer term goal that all hotels should aim towards. People will pick a hotel with free WiFi over another if the price or location isn’t that different.

It’s about time hotels and malls realise that WiFi is a people puller rather than an expense.

One thought on “The business of hotel WiFi

  1. An interesting argument can be had arguing whether or not Wifi should in fact be a profit line item or not. Personally I feel that Wifi is not their core business, but rather an additive service. I see it as a value-add for the consumer, a value differentiator to coax new business.

    I’m curious about the process by which the access is provided. Will it follow the current “vouchers” system and guests will be issued a voucher for each day they are in the hotel? If so, that’s a little clunky. Perhaps there is a better way of doing that? (Granted, it would mean changes for AlwaysOn as it deviates from their current model).

    I had another question about connecting to a secure AP, but just found the answer for myself. AlwaysOn do offer secure access, but you have to “pre-configure” your username and password and load a certificate onto your device in order to authenticate (no wonder I had problems trying previously). I’m not sure how well this ties up with the “voucher” system though, so that may need a little more thought.
    More info: https://hotspot.alwayson.co.za/AOHotspot/help/smarthelp.htm

    So, to add to your words, hotels care about profit increase and cost reduction, but should also focus on value differentiation. Well done Tsogo Sun! :)

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