Back in 1600, when Hamlet used "to be" to allude to both life and action and "not to be" to death and inaction, little did Shakespeare know that the tragedy he wrote would have an everlasting impact on our daily lives.
There is no doubt that since then, life has changed and evolved in so many ways. While many of us would debate which era of life was more meaningful, few of us would dispute that, these days, we are all affected by different levels of tragedies on a daily basis.
The development of technology is a good example. The optimists would certainly defend their case by arguing that IT has made the world smaller and closer, while others could see it as an invasion of oneself, leaving very few human values intact. This leads me to the buzz word of today's generation — the internet — and the ever-growing need to access the web instantly.
Necessary online access
In the last decade, hotels had to evolve from having a simple fax machine in what was called a business centre to the more sophisticated internet connection in rooms, let alone the chic world of WiFi. This is no longer an option for hoteliers, but a necessity, due to the ever-changing behaviour of our customers, regardless of their gender, age, education background or status. Each type of customer needs to access the internet for different reasons. In addition to being left with no option but to provide this, they are also expected to continuously upgrade their equipment to improve further the quality and the speed of the connection.
For one reason or another, some industry peers tend to willingly or unwillingly deny the high investment cost required to meet these expectations and are arguing that this facility should be offered to their customers at no cost.
Having said that and knowing that nothing comes for free in life, someone will be bearing the charge. Could this be the customer through a hidden built-in cost (as part of a package) or would it be the owner, since it is generally an easier way out?
Illogical free services
At a time when experts confirm that access to the internet is becoming one of the key reasons to book a hotel and when business executives must connect to the web to remain in touch with their business partners, colleagues and desk, where is the logic for not charging? Who could justify it to owners that a large chunk of their revenues had to be cancelled for no valid reasons? Who could approach owners asking them to regularly upgrade their internet offerings with no revenues expected?
It is difficult to assess the revenue that could be lost by offering internet access for free, since this will depend on the number of rooms available in the property, its annual occupancy and whether it is a business or leisure property, but the potential loss could easily reach a six-digit figure.
As an example, a 300-room business hotel with an annual occupancy of 75% would sell 82,125 room nights per year. Assuming that only 50% of its customers access the internet via a daily rate charged at AED 70 (US $19), this would equal AED 2.8 million ($762,288) in potential loss of revenue if the hotels decide not to charge for this facility.
While operators have the luxury to take any decision that would fit their strategy and GOP targets, the real danger is in having all hotels following suit just because one hotel has started offering free internet.
With profitability under severe challenges in the months and years ahead, is this a cheap short-term marketing stunt or a long-term suicidal financial decision?
If Shakespeare was around these days, he would probably have the answer for us!
