LAST YEAR, GOREMOTE INTERNET commnications Inc. made the decision to concentrate on sales of packaged services that could be marketed beyond its basic offer: predominantly delivering remote wireless broadband access at thousands of locations across the United States and around the world. The decision coincided with a growing trend that could raise the bar for GoRemote and its peers to bundle services on top of wireless Internet access: More hotels and other businesses are allowing people to hop wirelessly onto the Internet and their corporate networks for free via Wi-Fi hotspots and other broadband connections.
Big hotels including the Hilton and Marriott are offering Internet access for free, pressuring other chains to do the same, says Kirt Mulji, CEO of San Jose, Calif.-based Kyber Networks LLC, a Wi-Fi provider supporting hotels.
Such a trend leaves observers wondering why traveling execs would stay in a hotel where wireless Internet access is not available or costs $10 per day if they can book a place down the block at, say, the Hilton or Marriott. In Boston, the Onyx Hotel, Residence Inn Boston Harbor on Tudor Wharf, and Seaport Hotel and World Trade Center all offer free Wi-Fi, according to www.wififreespot.com, a Web site that provides locations in the United States and around the world where wireless Internet access is free.
“There are so many free hotspots out there,” says William Terrill, a senior analyst with Burton Group. “It’s going to be a hard sell in some areas to convince people to pay extra for that service.”
However, Wi-Fi provider Wayport Inc. hasn’t reported a problem finding people willing to pay for access to its 10,000 Internet hotspots, which include 800 hotels and 4,600 McDonald’s restaurants among other venues. Wayport recently expanded its hospitality business through the acquisition of NetPoint A/S, a company operating in Europe and the Middle East with 120 hotels in 24 countries.
Dan Lowden, vice president of business development and marketing with Wayport, says the number of customers paying for service each month has nearly doubled in a year. There were approximately 700,000 customers in the month of March, Lowden says, up from 375,000 the previous year.
Still, Wayport and other service providers have moved beyond selling basic Internet connectivity.
In June, Wayport announced reaching a reseller agreement with Vocera Communications Inc. to distribute Vocera’s mobile communications system on Wayport’s Wi-Fi networks at hotels and other locations. Vocera sells a system that allows mobile workers in a building or campus environment to communicate wirelessly with one another through a device they wear.
Steve d’Alençon, vice president of product management and marketing with GoRemote, says his company’s “business model isn’t predicated on making money from [Internet] access.” He says GoRemote generates most sales selling security features, capabilities to monitor and filter Internet use, and other socalled “value-added services” to its customers, which include such large companies as Merrill Lynch & Co. Inc., Procter & Gamble and Subaru.
GoRemote, which posted second-quarter revenue of $12 million, and its roaming partners typically share revenue when a customer accesses an Internet hotspot. The company is not compensated when a customer roams a free Internet hotspot, but d’Alençon says notifying customers they are in reach of a free network — a capability he says other service providers block — is part of the company’s mission to connect customers to the Web from various methods of access.
“The value, again, is not on the connection itself,” d’Alençon says.
Although wireless Internet hotspots are popping up everywhere from city parks to coffee shops, there appears to be plenty of room for growth in the hospitality industry. That’s good news for wireless Internet providers and Wi-Fi equipment suppliers courting hotels.
Of the estimated 60,000 to 70,000 hotels in the United States, only 5 percent to 10 percent are equipped with Internet access, says Mulji.
A few years ago, a hotel would purchase a few access points and cover its lobbies with wireless Internet access, says Bob Olson, a spokesman with Colubris Networks, a large manufacturer of wireless LAN equipment for the hospitality industry.
The Internet requirements of hotels and their patrons have become more sophisticated, Colubris and other companies working with the hospitality industry say.
Hotels now want to expand coverage beyond the lobbies to other areas, including guest rooms, and support a variety of functions over the wireless networks. A Best Western in Montreal allows patrons to use their room key to purchase items in the hotel. The information is sent automatically to the front desk over the wireless network.
Olson says the hotel now is testing phone service over the wireless network. Hotels also are using the networks to become more efficient. For example, Olson says, housekeepers are notifying the front desk on Wi-Fi-equipped PDAs when a room is clean. Such new capabilities are requiring more bandwidth, says Eric Warren, director of marketing and business development with Fremont, Calif.-based NextWeb Inc., a fixed-wireless provider supporting the hospitality industry through a relationship with Kyber Networks.
“Today they are looking for 1mbps,” Warren says of hotels’ bandwidth requirements. “Tomorrow they are looking for 2mbps.”
