Free Wi-Fi, but Speed Costs

As airlines try to persuade passengers to pay for Internet access at cruising altitudes, more airports and hotels are offering it free on the ground.

Half of the busiest airports in the United States now have free Wi-Fi, including Denver, Las Vegas, San Francisco, Phoenix and Houston. Dallas/Fort Worth plans to join that list in September, teaming with AT&T in a service that will give travelers 40 minutes of free Wi-Fi in exchange for viewing a 30-second advertisement.

That type of sponsored access is one way airports are balancing consumer pressure for free access to Facebook, Twitter and e-mail accounts with the cost of providing a bigger pipe for growing data needs. As devices demanding Wi-Fi proliferate, airports and hotels are also turning to tiered pricing models: offering limited Internet access free and a faster premium service to customers willing to pay.

Denver International Airport, which has offered free advertiser-supported Wi-Fi since 2007, is switching to a tiered pricing model this week. Working with Boingo Wireless, the airport is upgrading its network to give travelers free basic Internet service or more bandwidth for a $7.95 day pass (for a laptop) or $4.95 an hour (for a smartphone).

A business traveler sending a large file to a client is the type of customer who may opt for the premium speed.

“If you don’t see it going fast enough, you’d have that option of upgrading to the paid service,” said John Ackerman, the airport’s chief commercial officer. “Is your time or your money more important to you? That’s a personal choice we’re going to allow you to make.”

While the free service will still require viewing a 15- to 30-second commercial every half-hour, Mr. Ackerman said passengers should see improvements in the speed of the complimentary service, which has been a source of complaints.

The Boingo contract guarantees the Denver airport a minimum share of the Wi-Fi revenue — more than $500,000 over three years for the airport — with the potential for higher earnings as advertising opportunities evolve.

“We could have somebody walking down the concourse and serve them an ad saying, ‘There’s a Starbucks 200 yards up and to the right — stop in and have a cup of coffee for 50 cents off,’ ” Mr. Ackerman said.

With flight cutbacks decreasing the income airports receive from landing fees, non-airline revenue has become more critical to airports, which have also been lobbying the government to raise the passenger tax that helps pay for airport facilities. So these types of Wi-Fi deals help balance budgets while remaining competitive in an era when passengers can choose to fly from or connect through an airport with better amenities or prices.

Jim Sullivan, founder of, a directory of airports, hotels and retailers that offer free Wi-Fi, said more regional airports had joined the list in recent years.

“It’s more of a competitive situation there,” he said. “It’s definitely an amenity they can offer to try to get more traffic.”

Some notable larger airports have also embraced free Wi-Fi, including Reagan National and Dulles airports in Washington. By July 2, Raleigh-Durham International airport in North Carolina plans to introduce a tiered Wi-Fi service, with 45 minutes of free advertiser-sponsored access.

Christian Gunning, a spokesman for Boingo Wireless, which operates free, paid and tiered Wi-Fi networks at more than 60 airports worldwide, said the hotel industry had led the way as Internet pricing models evolved.

“Ten years ago, pretty much every airport was pay and pretty much every hotel was pay,” he said. “Some of the midtier hotels started to go free, then everybody did it, and it was a race to the bottom.”

That bottom is an experience familiar to anyone who has tried to log on to a free network — or even a paid one — and waited through most of an airport layover or room service delivery time for a few dozen e-mails to download.

“No one wants to pay for anything, but everything needs to be state-of-the-art or people complain,” Mr. Gunning said.

But travelers who are already paying high monthly bills for their smartphones can now rely on cellular networks to check their e-mail or flight status, and may have little incentive to pay additional fees for Wi-Fi at the airport, or even at their hotel.

Even with its free service, Denver International airport has about 10,000 daily Wi-Fi users — double the number in 2008 but still less than 10 percent of the travelers who pass through the airport each day.

While providers cite increased data demands as a justification for charging for Internet access, travelers often balk at the fees and at having to pay separate charges for every device they carry.

HotelChatter, a Web site that follows the hotel industry, found in its latest annual Wi-Fi report that although more hotels were offering free or tiered pricing, the ones that did impose a fee charged $13.95 a day. The report estimates that the cost to provide Internet service for a 250-room hotel ranges from $2.50 to $4.50 per room, per month.

For such a hotel, “the average yearly revenue that we ballparked was around $200,000,” said Mark Johnson, HotelChatter’s founder.

Mr. Johnson has tracked hotel Wi-Fi for eight years and has found that even some luxury brands are testing the waters of a free option.

“This year, in particular, we saw a lot of luxury hotels offering some sort of free Wi-Fi,” he said, mentioning Peninsula Hotels as one example of a luxury brand that offers free Internet to all guests.

Sometimes it’s a perk given to members of the hotel’s loyalty program. Platinum-level members of Starwood’s Preferred Guest program, for instance, receive free Internet access, and as of March, gold-level members can choose free Internet service as one of several benefits when they check in. Fairmont offers free Internet access to all members of its President’s Club loyalty program, which anyone can join.

In other cases, the free service is available only in the hotel’s public areas — preserving fees from guests who prefer to log on in their rooms.

“They’re still going to get revenue from business travelers who aren’t going to work out of the lobby,” Mr. Johnson said.


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