13-Hotspot research

HTU 13

Hotel Technology Update Hotspot Research iBAHN helps hotels cope with exploding demand for high-speed Wi-Fi connectivity Recent market research supports travellers’ growing expectations for ubiquitous Internet access. As more and more consumers use new applications and handsets that rely on Wi-Fi networks, demand for high-speed, high-capacity broadband services in hotels continues to grow at an increasing rate. iBAHN offers solutions for broadband prioritisation and tiering to help manage the increasing demands for Internet services. We also help hotels understand when and how to expand the broadband capacity of their Wi-Fi network to meet their guests’ connectivity expectations.

What's happening in the Wi-Fi hotspot market?

MultiMedia Intelligence (MMI) (http://www.MultiMediaIntelligence.com) reports that the worldwide Wi-Fi hotspots market will grow to over 170,000 venues connected by the end of 2007. In addition, branded venues such as Starbucks and McDonalds are becoming increasingly important in driving incremental usage.

Europe remains the leading region in terms of hotspot footprint, with 42 percent of worldwide locations, while North America leads in worldwide usage, with 53 percent of hotspot connects in 2007.

“The hotspot market is on the verge of a revolution — a revolution being driven by new users, new access devices, and new applications,” according to Amy Cravens, an Analyst with MultiMedia Intelligence. “In the near future, hotspots will not be just for business travellers any more. The increasing availability of dual-mode handsets in 2008, coupled with the anticipated introduction of lower priced access fees, will result in the hotspot user base broadening to include consumers.”

The beginning of a trend toward consumer usage is already evident; with consumers accounting for nearly 25 percent of connects in 2007, up from approximately 15 percent in 2006. This trend is anticipated to accelerate going forward.

While revenue per connect is expected to fall significantly for cafés and similar venues, we believe revenues will be sustained by access fees in full service hotels and airports, which together will comprise over 90 percent of access revenues. To help offset the lower ARPU of consumers, hotspot operators are also beginning to explore new revenue opportunities including back office services, application/content offerings, and advertising to bolster revenues generated from access fees and roaming partnerships.

Recent research by MultiMedia Intelligence has identified the following: • In 2007, handhelds only account for 10 percent of connects. However, the percentage of handheld connects will increase in accordance with increasing installed base of handheld Wi-Fi enabled devices and the resulting increasing consumer usage. Handheld connects are expected to double as a percent of total connects annually for the next few years.

• Despite pricing pressure created by consumer-oriented offerings and the competitive threat posed by 3G and WiMAX, MultiMedia Intelligence, Inc. foresees robust growth in hotspot revenues.

• Roaming providers drive significant traffic to hotspot venues, as well as linking individual hotspot operators and branded resellers to promote mass market usage in their locations.

• Market saturation has already largely occurred in Tier 1 venues, and by the middle of the forecast period it is anticipated that Tier 2 venues will be approaching saturation, at least among those venues that are perceived to be potentially profitable. Cafés are projected to have the highest unit growth over the forecast period, whereas public venues and RV locations are projected to have the highest percent increase.

• While a smaller hotspot market presently compared to Europe and North America, Asia Pacific will experience the greatest growth rates over the forecast period. Asia Pacific has a slightly higher dominance of café deployment compared to other regions.

• The majority of hotspot usage continues to be pay-as-you-go. While growth in subscriptions or prepaid cards has been slow to date, MMI does believe that subscription revenue will increase nearly tenfold over the forecast period.

What does this mean to the hotelier?

Hotspot growth is a leading indicator of the continuing demand for broadband Internet services.

Guests already see Internet services as one of the most important amenities at a hotel, and the continued expansion of hotspots supports their expectations of “Internet Everywhere.” With standard interface speeds on wireless of 11Mb to the WAP, users increasingly expect high-speed and highcapacity capabilities when they stay at hotels. They want to wander anywhere in the hotel and enjoy the high-speed and high-capacity connectivity wherever they wander.

How does iBAHN help?

As a worldwide leader in wireless and wired broadband for hotels and meetings, iBAHN is able to provide a variety of solutions and services to enable hoteliers to meet the growing needs and expectations of their guests. From tiered bandwidth services to wireless overlays, iBAHN is able to offer solutions to fit your needs. iBAHN is a recognised leader in Wi-Fi security management. All iBAHN-enabled Wi-Fi networks utilise WPA2 enterprise-grade protocols (the most robust security standard available in the industry) to ensure that all guest and hotel connections are safe and secure. iBAHN is also recognised as an innovator in the design of Wi-Fi networks, using proprietary technologies and practices to garner much greater simultaneous connectivity per WAP than the competition. The result is higher security and greater bandwidth utilisation efficiency — we get higher performance from each hotel’s Wi-Fi network.

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