Chasing Bandwidth: The Challenge of Keeping Up with,The Growing Addiction to Data with in the Hotel Industry

By Rick Garlick, Global Practice Lead, Hospitality and Travel, J.D. Power

Rick Garlick, Global Practice Lead, Hospitality and Travel, J.D. Power

Each year, J.D. Power sponsors the most comprehensive study of guest experience within the North America hotel market, annually surveying between 60,000-70,000 recent guests. A particular focus of the J.D. Power North America Hotel Guest Satisfaction Index Study is the problems that guests’ experience, as having an issue during their stay has a significant impact on guest satisfaction and loyalty. For the last several consecutive years, issues with hotel Internet service have easily been the most widely reported problem area for guests.

In the 2015 study, 2.7 percent of guests across all hotel segments report having some difficulty with their Internet connection. In each hotel segment 2-5 percent of guests experience Internet issues. While this may not seem like a substantial percentage, consider that this still represents several Internet issues during a typical evening for any given hotel, which could result in a corresponding number of complaints.

These statistics are particularly frustrating to hoteliers who have invested heavily into their Internet infrastructure. During the course of J.D. Power’s annual readouts of syndicated results, hotel executives frequently lament the fact that they spend a lot of money to upgrade Internet capabilities, often while simultaneously transitioning from a paid service to offering Internet access free to guests. Yet, the percentage of total guests who experience Internet issues has only declined slightly (3.5 percent in 2013, 3.4 percent in 2014.)

The reason for the apparent lack of progress is due to the fact that guests are becoming more addicted to downloading data. While it used to be that a hotel guest might bring one laptop or device to their hotel room, the standard is now multiple devices, particularly if children in the household accompany their parent or parents on trips involving hotel stays.

It is almost impossible to keep up with the growing demands for bandwidth. Yet, at the same time, Internet access is the ‘new hot water.’ Just as guests expect a hot shower in the morning regardless whether everyone is taking a shower at the same time, they expect fast Internet, even if everyone else is on the Internet at the same time, frequently consuming valuable bandwidth with multiple devices.

"It is interesting that, in its relatively short life span, the Internet has become such a blessing and challenge for the hotel industry"

In addition to being a high incidence problem area, Internet issues also have a relatively high negative impact on guest satisfaction compared with many other problem areas. However, the impact of Internet issues largely depends on the nature of the problem and who experiences the problem, particularly from a generational perspective. Internet issues impact Pre-Boomers (born before 1946) the most. Younger generations, Gen Y (1977-1994) and Gen Z (born between, 1995 and 2004) are the least affected by Internet issues, likely because their familiarity with technology creates more realistic expectations.

The types of Internet problems experienced by guests vary quite a bit by generation as well. For example, older generations experience a much higher percentage of problems initially connecting to the Internet, whereas younger generations predominantly have problems with lost connections or slow bandwidth. One might presume that slow bandwidth would be more difficult to resolve and would, therefore, have a greater impact on the guest experience, but an older guest’s inability to connect seems to be a more impactful type of Internet problem.

It is interesting that, in its relatively short life span, the Internet has become such a blessing and challenge for the hotel industry. Having an effective Internet connection helps the business person be productive on the road, while allowing leisure travelers and their families the opportunity to stream entertaining content. Yet, expectations of Internet performance have emerged aggressively. Most guests presume that Internet connectivity is identical to electricity or heating/cooling that can be reliably distributed to each individual guest room throughout the hotel. Just as they are not charged extra for television, phone use, air conditioning, or any number of other hotel amenities, the expectation is becoming common that Internet access should be provided at no additional charge.

Indeed, there is a growing trend, even among full service hotels that used to charge a separate fee for Internet access, to now provide access at no additional cost—though sometimes hotels use the offer of free Internet to at entice guests into their various loyalty programs. Meeting planners also now assume fast and reliable Internet connections are standard as part of their agreements with the venues they use for their events.

One solution that has been adopted is to offer premium Internet connections for a small additional charge. The J.D. Power study shows that guests generally don’t mind paying extra for the premium service. This helps alleviate some of the bandwidth issues while bringing in some revenue to subsidize the costs of the necessary upgrades.

It is difficult to know at what point the growing hunger for data will flatten out. Until then, hotels will continue to chase bandwidth and deal with the challenge of our continued growing consumption for Internet content as a cost of doing business.