As Cities Use WiFi To Lure Guests, Hotels See Revenue Source Fade | Wifi |

......As a result of this slow but persistent march toward ubiquitous connectivity, the hotel WiFi revenue stream is narrowing. U.S. hotel revenue from telecommunications services such as Internet and telephone usage plunged from about $5 per occupied room in 2000 to less than $1 in 2009, though that number has since leveled off, according to PKF Hospitality Research.

And while much of the drop is a result of the near ubiquity of cellphones, Robert Mandelbaum, PKF's director of research, said that some of the decline also reflects the waning leverage that hotels have to charge a daily fee for wireless Internet. 

In fact, about a third of traveling consumers surveyed by earlier this year said that free WiFi was the single most important amenity factored in their booking decisions.

That spells bad news for hoteliers looking to recoup a capital investment on upgraded WiFi service, which can reach $50,000 for a suburban hotel and a multiple of that number for a larger urban property, according to Bjorn Hanson, divisional dean of New York University's school of tourism and hospitality management.

That said, the growth of municipal public WiFi might merely bifurcate travelers into "need" and "need more" categories, dividing those who can get by with the basic Internet services provided in parks from those who need higher-bandwidth networks for things like video streaming. 

Hanson and Mandelbaum both said that such a bandwidth differentiation might provide an opportunity for hotels to pitch, and ultimately charge for, higher-quality WiFi access for travelers, especially business travelers on an expense account, who have a growing appetite for bandwidth.

Via WiFiNovation