Best of the ISP-Lists

Selling to Hotels

How much trouble would it be to become a hotel's ISP? The ISP-Marketing list examines your options.

[April 12, 2000]

On the ISP-Marketing list recently, RS asked:

"Does anyone have any pricing recommendations for offering Internet access to hotels? There are several small mom and pop hotels/motels in our area, and we've been approached about offering a flat monthly fee for unlimited access, which I expect they will try to sell to their guests. We offer vacation accounts (7, 15, and 30 days), but this is a new area for us. Any help would be appreciated."

[EA, a lawyer, warned] "Unless you are very careful it is a minefield of liability issues!"

[JG wrote from a beach-filled tourist area] Since we primarily cater to a tourist community and have many hotels as clients, what we have done is offer a domain for the hotel (i.e hotelonline.com) where they sign up temporary accounts and email addresses via a web page. The charge is right around $20 USD for 100 hours of access to the customer. We charge the hotel $15 USD, they keep the difference. This way they can offer an Internet solution to their customers. This is just the gist of it, there is a little more marketing involved.

[KR suggested a simpler solution] We do not have hotel clients per se. But this is the way we are tackling similar situation. We offer dealership accounts — a dealer buys accounts with us in bundles of 10. We charge $10 per account per month for $100 per bundle per month. We give access to our authentication server to setup login accounts. We bill the dealer for the full amount of his dealership even if he uses less than what he bought during any period. This allows us to avoid keeping track of hourly usage and avoid dealing directly with the "enduser." We have several dealers already and all are happy.

TL, who works for a solutions provider, described the problems involved in offering broadband instead of dialup access:

"Be prepared to pay all the up-front costs for hardware, installation, maintenance, technical support, recurring fees and the T-1. You should then be prepared to track usage to the point where you send the hotel an invoice for however much access was used and then wait the obligatory 30-days for them to pay you.

The most common arrangement is a revenue split with the hotel. This is very similar to the cable TV relationships hotel owners have with companies like OnCommand and LodgeNet. In exchange for you taking the risk of installing the equipment, you get to keep 70 percent of the revenue from the service usage and the rest goes to the hotel. This percentage can change depending on how much "pain" you're willing to absorb and profit you're willing to give to the hotel.

The best long-term solution is pull CAT6 cable and run a traditional Ethernet network that can run up to one Gigabit of bandwidth internally. That may seem like overkill now, but [in the future it'll be the right thing to have done]."

Finally, MJ described it from the guest's perspective:

"I have no experience as an ISP owner but very recently I had an experience as a hotel guest. I was very surprised to find out that the hotel I was staying at in Washington, DC had T-1 access from all the rooms. The system was too good to be true. There was absolutely no mention of getting a LAN card from the hotel but assuming you already had a working one installed in your computer all you had to do was plug the 10 base-T cable into your NIC and run your browser. You were automatically brought to the homepage for the server (www.cais.net) and you had to click on "agree" and that was it. There was absolutely no other setup, no IPs to set, no DNS, etc. Everything worked wonderfully with these exceptions:

• 1. After about 4 hours you had to reboot. It seemed to lose its IP address (DHCP probably).
• 2. FTP was blocked.
• 3. I never had to put any info in for the ISP, not even my name etc., but the simplicity of it was neat. They charged $20 per day (from 12pm to 12pm) but it was a fairly upscale hotel. I'm not sure if the charge is the same in all of their hotels. They also seem to do a lot of hotels, according to their Webpage."

—End