There is nothing that irritates a hotel guest more than having to pay for Internet service. And herein lies a significant strategic competitive advantage for small luxury hotels.

Go ahead and do a Google Search for “What travelers think about hotel WiFi?” Then read a couple of pages of results and you’ll see how universally despised hotel Internet access fees are. USA Today, CNN, MSNBC, J. D. Powers, Hotels.com, The Daily Mail (and the list goes on) are all reporting on it. And bloggers are being merciless on hotels in their condemnation of Internet charges.

J. D. Powers just released its 2010 North American Hotel Guest Satisfaction Study which shows the number one hotel amenity is wireless Internet access. And WiFi use is on the rise – over three-quarters (77%) of respondents say they access the Internet through a WiFi device – up from just over half (55%) three years ago. And they don’t just want access they want high speed access – reliable quality service.

What I found most interesting in the study is that overall customer satisfaction of hotels that offer free Internet access is more than one full point higher than hotels that charge for it (8.15 vs.7.04).

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In other words, Luxury and Upscale chain hotels – those properties notorious for charging for Internet access – are willing to throw customer satisfaction under the bus to keep this revenue stream. The majority of hotels in other categories offer free WiFi. And now that even McDonald’s offers free WiFi it’s no wonder hotel guests feel it should be free.

In a BBC survey of more than 27,000 adults across 26 countries, close to four in five people believe that access to the Internet is a “fundamental right.” And by charging for Internet access, luxury chain hotels are inhibiting people from enjoying that fundamental right.

It’s easy to count the amount of money a hotel generates as a result of charging for Internet access. But it is more difficult to measure the amount of lost revenue as a result of people not booking because it is not free. Or those choosing to eat at a nearby Starbucks, McDonalds or the local deli because they offer free WiFi.

The other thing that can’t be measured is the damage these charges can do to a hotel’s brand. All you have to do is look though negative comments on TripAdvisor.  A quick check of several luxury chain hotels on TripAdvisor turned up the following comments – all made this year.

• “Another disappointment was that WiFi was an additional charge. For this class of hotel, one would expect it to be included.”

• “I would probably prefer a Holiday Inn or equivalent where you can get free wifi, free parking, nice pool, free breakfast, and convenience for $100 OR LESS A NIGHT.”

• “WiFi was expensive and we had to pay for the parking as well. Why don’t they include them in the room price?”

• “All the extras in the hotel are very pricy and WiFi is an extra USD 15 per day.”

• “Also like many have said on here, it’s crazy to charge $15 for WiFi when the room and everything else inside the hotel costs so much.”

Hotel guests clearly despise being charged for Internet access. It’s the number one complaint among 1,815 travelers recently surveyed by Hotels.com – 75% cited this as an issue.

Free WiFi is an emotional issue for a majority of travelers. Expect this issue to intensify as more and more people switch from regular cell phones to smart phones. The more they become used to universal Internet access the more they will resent hotels charging for it.

For small luxury hotel marketing folk the implications are clear -

to increase customer satisfaction you need to provide high quality, in-room Internet access for free.

And when you do you’ll have a very strong competitive advantage over the large, branded, chain luxury hotels. Market this highly charged, emotional issue like crazy while you can. Sooner or later those large competitors will have to offer free Internet service.

How long do you think it will be before all WiFi is free?  Share your thoughts – post a comment.

Safe travels – Madigan Pratt

As promised – here’s the Nisbet Plantation Case Study that Jamie Holmes and I presented at the Caribbean Hotel and Tourism Association meeting in St. Thomas last month.

It’s good news that proves you can market your way around a recession.

Here’s what Nisbet Plantation Beach Club, an intimate luxury resort in the Caribbean, did to outperform other hotels in the region. As a result of following best practices and adhering to customer relationship marketing, Nisbet is also well positioned to flourish as the recession subsides.

You can download the complete article here.  Here’s a top-line summary.

• Focus on Marketing Basics – A recession is not the time to experiment – especially if you have a very limited marketing budget. Make sure your 4-P’s of Marketing – Product, Place, Price and Promotion – are performing perfectly. Experiment only if there are any opportunistic funds left in your budget.

• Don’t Deep Discount – Study after study show deep discounting is easily copied, doesn’t stimulate demand and hurts RevPAR over the short term.Long term revenue also suffers. STR estimates it will take between five to ten years for hotels to return to pre-recession pricing once inflation is factored in. Used to cheap rates, the trade and consumers will resist your attempts to raise them.

• Deliver a Great Guest Experience/Provide Value – Hotels need to cut expenses, but caution needs to be taken to cut those that will least impact the overall guest experience.Cutting staff to skeleton crews, draining the pool, closing the spa and shuttering restaurants are not what a guest expects. And most likely their displeasure will be shared with others on TripAdvisor.

• Maintain Marketing Spending – Hospitality marketing budgets are always easy targets for budget reductions in recessionary times. It is the tool that will help convince potential guests that your hotel is better than competition, provides good value and is certainly worth a few more dollars a night than the other hotels that are using Price as their primary marketing tool.McGraw-Hill did a study of companies during the last Great Recession of 1981-82 and found that those who maintained or increased advertising spending outperformed competition during the recession and recovered more quickly than those who cut spending.

Click here for the complete Nisbet Plantation Hotel Case Study.

Safe Travels – Madigan Pratt

If you are a regular reader of HospitalityMarketingBlog.com you know I’m a raving fan of TripAdvisor.  With over 20 million reviews there’s hardly any guest who enters the door of a luxury hotel who hasn’t first read about the property on TripAdvisor.

The TripAdvisor Home Page proudly boasts, “more than 15,000,000 travelers from 190 countries planned trips here this week.” An astonishing statement.  Adding weight to this is word-of-mouth impact.  Research shows consumers believe reviews read online almost as much as they do personal recommendations from friends and relatives.

While many hospitality marketing professionals and travel agents don’t care for TripAdvisor (how’s that for PC?), our clients embrace it.  Through a series of proactive, custom-tailored strategies each hotel actively manages TripAdvisor and encourages guests to post reviews.  We treasure every TripAdvisor review – especially those with 5-Stars (or 5-Owls as TA refers to them).

But here’s what gets my goat.  And the only reason I’m bringing it up is it’s happened a couple of times now.

A guest writes an absolutely glowing review of a property and rates everything 5-Stars – Service, Value, Location, etc.  But in posting the review at the end they make an obvious mistake and rate the hotel as 1-Star.  The first time this happened customer support was contacted and asked to simply correct the guest’s mistake and change it to 5-Stars which was obviously what the guest intended.

Instead of making the change, a few days later the review disappeared!

This happened again recently for another hotel.  Instead of contacting customer support an email was sent to management. It explained the situation as well as what had happened previously and asked them to please make the correction to 5-Stars.  A couple of days later the review disappeared!

When I post a golf score that’s well outside my normal range (usually higher) the computer informs me it looks like a mistake and asks me if I want to change it.  With all their technological prowess, you’d think a similar fix would be simple for TripAdvisor.

Then I could rave about TripAdvisor all the time.

What do you think?  Safe travels – Madigan Pratt

 Related Blog Posts about TripAdvsor:

• Nowhere to Hide 
• TripAdvisor Reaches 20 Million Reviews
• Where’s Your TripAdvisor Strategy
• How Important is Word-of-Mouth Advertising

As a small luxury hotelier you know the story – nearly every guest who comes through your door will have checked past guest reviews on TripAdvisor before coming.

That’s why yesterday’s announcement that TripAdvisor now has over 20 million reviews is so important to you. Last April TripAdvisor had 15 million reviews and two years ago the figure was just 6 million.  Growth is accelerating and will continue to do so as travelers become more concerned about value for money in pressing economic times.

The importance of TripAdvisor in the hotel selection process can not be underestimated.  As a small luxury hotelier you know the most effective marketing tool you have is Word-of-Mouth advertising – having your own customers “sell” you property.”  Well TripAdvisor is almost as powerful as first hand WOM.

You see, people believe reviews they read online.  This fact was highlighted the research posted last January.

You just can’t ignore TripAdvisor!  There are strategies you should follow to manage this powerful marketing resource for maximum benefit.  We advise our clients on how to do it and can help you too.  But only if you contact us.

Looking forward to hearing from you.

Safe travels,  Madigan Pratt

How is this for telling it like it is?

“Businesses today exist in an era in which it’s nearly impossible to escape the likelihood of being evaluated.” said Linda Shea, senior vice president at Opinion Research, in a statement, “There’s nowhere to hide.”

Like it or not consumers have taken over control of hotel comment cards. And where management use to keep results to themselves, today consumers are sharing results with the world. There is no where to hide!

• And guess what! Consumers are loving it. According to a Opinion Research Corporation June 2008 report 61% of people surveyed indicate they check online reviews, blogs and other online customer sources before buying a new product or service. That number is even higher for travel products at 82%.

• Wait – there’s more! People who shop online value the reviews of fellow consumers more than those provided by professionals in the field. That’s according to a 2008 study commissioned by InQuira.

The implications for small luxury hotels is clear – you have to be at the top of your game with everyone you talk to on the phone, send an email to or who enters your lobby.

You also need to have a clear strategy designed to monitor, manage and respond to comments made about your hotel online. It is just too damn important to ignore. Where is your TripAdvisor strategy?

What do you think? Safe travels – Madigan Pratt

A recent survey by Habeas, an online reputation management firm, reveals consumers prefer e-mail as a primary method of communications in their personal and business lives. 

In fact 67% preferred email and 65% believe this will continue to be true for at least the next five years vs. video conferencing (19%), instant messaging (17%), SMS text messages (12%) and Web meetings (12%).

Nearly 70% are concerned about being victimized by online fraud and 43% are concerned about spam and virus threat to mobile devices – both considerably higher than last year.

So what does this mean for hospitality marketing – especially for small luxury hotels?

• Email is vitally important in communicating to past and potential guests.
• Email is here for the long-term.
• If you are using email to foster loyalty, invest in making sure you are following industry best practices, are in compliance with the CAN-SPAM Act and are up front with privacy rules.
• While mobile messaging may seem sexy – your time (and $) might be better spent making sure your email program is the best it can be.

What do you think?  Safe travels – Madigan Pratt

Here’s some news that got me wondering about the future of hotel brochures – Bloomingdale’s is shutting down its catalog business in 2009 to concentrate its direct marketing efforts on the web where sales are growing faster. 

Higher paper, production and mailing costs are affecting every business that employes brochures, catalogs and direct mail.

A small luxury hotel can easily spend $50,000 to $60,000 to produce 20,000 brochures – maybe $75,000 once you factor in postage and handling to get them in the hands of agents and travelers.  $75,000 over the course of two years could go a long way toward enhancing a hotel’s web site, Search Engine Optimization and pay-per-click.

In today’s Internet focused world is the hotel brochure about to go the way of the buggy whip?  What do you think?

Safe travels – Madigan Pratt

PS – Bloomingdale’s is expected to generate in excess of $1 billion in web sales this year.