WI-FI: Wi-Fi demand grows

But, in order for Wi-Fi to become a viable and revenue-generating technology, marketers and business owners need to come up with a better reason for installing it than "because it is there".

For hotel chains, particularly those catering for business customers with conference or meeting facilities, Wi-Fi provides a means of adding value to a core product. Hotel chain Marriott has been working with broadband provider STSN (it is an investor in the company alongside Siemens and Intel) and in October 2003 it wireless-enabled its entire Swindon hotel, making high-speed internet available in every hotel room, all guest areas, conference rooms, the bar, restaurant, and even the swimming pool. Guests can purchase a card at the hotel, which gives them internet access or they can pay as they go through their own ISP when they log on, as long as they have a wireless card. "We are a hospitality company and not an IT company," says Mark Kemp, product manager for corporate and conference at Marriott UK. "We don't see Wi-Fi as a revenue-generating tool, but more of an added-value service."

Graeme Powell, vice-president, EMEA region, at STSN, believes the provision of Wi-Fi access can help hotels to attract business travellers. "Hotels are not interested in technology per se; they are interested in driving revenue per room, and food and beverage revenue. Hotels which have installed broadband access, whether wired or wireless, have seen a significant increase in their ability to attract and retain the business traveller," he claims.

"In 2002, 35 per cent of Microsoft's approved hotel list in the US were hotels in which we had installed broadband access. In 2003, this rose to 75 per cent."

Barry Shrier, chief executive of public internet-access supplier Liberty Europe, says that after his company wireless-enabled the Okura hotel in Amsterdam, its general manager reported an additional 500,000 euros of conference business in one year. Liberty has also worked with the Coppid Beech hotel in Bracknell, which, unlike Marriott, views the installation of Wi-Fi as both an added-value proposition for its business guests and a valuable, new revenue stream. It charges £5.99 per hour or £12.99 for 24 hours usage, paid via a voucher from the hotel. The revenue is shared between Coppid Beach and Liberty.

"A wireless network might not seem to be the first priority for many hotels, but at Coppid Beech our Wi-Fi provision has been an outstanding success," points out hotel general manager Alan Blenkinssop.

"We have seen an increase in the number of customers using the internet at the hotel - both our overnight guests and those coming to meetings and events," he continues. "In the long term, this will mean a better ex-perience for our guests and increased revenues for us." But, managers who think they can just wireless-enable their hotels, sit back and watch the money flood in, should think again. "At many of the hotels I've visited, staff frequently don't even know that they have Wi-Fi, let alone are trained in providing custom-ers with the best possible experience," says Blenkinssop.

Shrier agrees: "All the technology in the world does not automatically bring in revenue. If you go to a wireless-enabled hotel and ask the staff there what internet access there is, they often look at you blankly," he explains. "The problem with the industry right now is that phone companies stuff technology into a property, but they don't do anything to help the property promote the service. Service providers like ourselves need to develop an intimate partnership with retailers and help them to understand the benefits of wireless because they are not experts at marketing an internet-access service."

Liberty Europe is developing a venue-support programme that enables property owners to use Wi-Fi as a marketing and CRM tool, as well as benefiting from the added value and revenue generation. "Marketers can engage in a one-to-one learning relationship with their consumers," explains Shrier.

This is achieved on the log-in page, where users enter a password or voucher number. "It is an opportunity for the property owner to communicate and interact with the Wi-Fi user, perhaps offering a free coffee for every sandwich bought or something more sophisticated in terms of developing CRM relationships," he says. "A hotel could provide a personalised message and a short questionnaire for people to complete in return for a complimentary glass of wine in the bar. The Wi-Fi service can be part of the overall data-gathering and CRM strategy."

The argument for providing wireless access in hotels is quite compelling.

Business people on the move will want to check their emails and work while they're away from the office. However, other companies are also getting in on the act, from coffee shops like Costa Coffee and Starbucks to Texaco.

The garage chain has done a deal with T-Mobile to wireless-enable its properties. Customers will be able to park in a dedicated bay in a Texaco forecourt to use the service, which will be rolled out to several hundreds of outlets in the UK, the majority on A roads.

Nikesh Arora, chief marketing officer at T-Mobile International, says: "As wireless becomes a more relevant phenomenon, people will converge towards the places offering it." The idea is that these locations will offer customers Wi-Fi access as a means of selling more of what they already sell, rather than changing their business model to become an internet-access provider.

"We're not about arriving at some supermarket chain and stuffing it with technology," points out Shrier. "Starbucks' expertise is in making good coffee and Marriott's is about having comfy beds. Giving customers access to the internet is not their core skill. If your goal is to sell hamburgers and coke, for example, you will want to drive footfall, and if you can add a benefit such as 'you can get broadband access here' to what you are already doing, it will help you to achieve your core aim."

While Wi-Fi can offer a unique selling point, most venues will not want hordes of people sitting around using the internet and not actually buying anything. "As this is such a new industry, there are a wide variety of payment and access models," explains Shrier. "Some venues sell paper vouchers offering an hour's access or 24 hours. This is popular because these places want to drive traffic to the till where they can cross-sell - they don't want a platoon of business men sitting in the basement not buying anything."

An alternative is for companies to offer a monthly subscription through a service provider, which means customers can arrive at the venue and get online immediately.

According to STSN's Powell, security can be a major issue when it comes to wireless hot-spots. "A doughnut seller, for example, who says 'I'll shove a wireless access point there and we'll sell more doughnuts' isn't likely to be providing a secure service," he reckons. "When people connect to the internet via a poorly configured network, the hard drive of their computer is open to anyone who wants to take a look at it. It's likely that the doughnut seller who put up the wireless-access point, which he bought from a high-street electrical chain, wasn't able to configure it correctly to stop people looking at each other's laptops. They will end up with a network that is not as secure as a business person could hope for," Powell warns.

He adds that you don't have to be a techno whizz to do this. "I'm not a software or hardware expert and I can do it - anyone who uses computers for work and is used to looking around a network to find things will be able to do it. It takes three or four mouse clicks, and I could teach you in five minutes."

Unsurprisingly, most providers stress the security of their networks.

"Security is very important to us - there is no way that we would offer a service without security," says T-Mobile's Arora. "We are working closely with Microsoft on the next generation of products."

Wi-Fi is certainly an expanding market. According to a report from Insight Research called Wi-Fi in North America and Europe: Telecommunications' Future 2003-2008, international Wi-Fi revenues are set to increase from 2003's $7 billion (£4.07bn) to more than $44bn (£25.58bn) in 2008. E Insight's analysts believe that wireless LAN technology will grow faster in Europe than in North America. "We expect the growth of European Wi-Fi services to surpass North American revenue well before the end of our forecast period (2003-08)," comments Robert Rosenberg, president of Insight Research.

"I definitely believe that wireless usage will continue to expand," agrees Arora. "A lot of the fixed-line broadband companies have started selling wireless as part of a home package, so people will get used to being able to use their laptop anywhere in the house, thus driving usage outside the home."

One company hoping that it will be a Wi-Fi Christmas is MyZones, which has partnered electrical retailer Dabs.com to market wireless services for the home. MyZones is headed up by Clive Mayhew-Begg, previously vice-president, international, at e-tailer CD Wow!. "Instead of just a Wi-Fi product, we are looking to provide a Wi-Fi service that you can use at home and take to hot-spots, which is all charged to your home bill," he explains. A MyZones package incorporates Home Zone, which connects all home computers to the wireless internet; Public Zone, which allows consumers to share the Wi-Fi zone of all other opted-in users; and Shared Zone, which enables users to make their broadband connection available to their neighbours and charge them for it if they want.

BT is also offering a number of domestic Wi-Fi packages, including BT Home Network 1200 and BT Broadband Traveller, which brings together home networking, BT Broadband and public Wi-Fi access through BT Openzone.

2004 certainly looks set to be the year of Wi-Fi, with suppliers like BT hammering home the benefits to consumers through initiatives such as Wireless Broadband Week, scheduled for the end of January 2004. But suppliers need to remember that the technology has to supply real benefits to the venue marketer, as well as the supplier and consumer, in order to survive.

STARBUCKS TURNS COFFEE LOVERS ON TO WIRELESS INTERNET

The UK's latte lovers have had wireless internet in Starbucks' stores since August 2003, when the coffee chain launched a pilot Wi-Fi programme with HP and T-Mobile. The company already offers the service in some 2,000 stores in the US and is piloting it in Germany.

The service is part of T-Mobile's HotSpot scheme and customers can visit Starbucks.com/hotspot to download free Wireless Connection Manager software from HP. This enables laptops and other devices to automatically sense and connect to wireless networks.

The Wi-Fi service was free, but, after the New Year, customers need an account with T-Mobile HotSpot. When users access the service, they are served a Starbucks/ T-Mobile log-in page, with links to Starbucks.co.uk and T-mobile.co.uk. Users can browse both sites, including Starbuck's Christmas site, The Lounge, without buying wireless time. All customer data is retained by T-Mobile.

"Starbucks looks at new ways to enhance the in-store experience for customers," says Cathy Heseltine, mark-eting director at Starbucks Coffee Company (UK). "By offering T-Mobile HotSpot, Starbucks gives value to customers and continues to elevate the brand by offering new services." "We try to partner firms where we'd expect mobile workers and people wanting wireless to go," says Nikesh Arora, chief marketing officer of T-Mobile International. "We work with Starbucks in the UK, Germany and US, where T-Mobile is the number one provider of wireless internet."