by Michael J. Shapiro | July 01, 2015


Negotiation frustration
Even if planners understand why Wi-Fi comes at a cost, how high should that cost be? "It can be ridiculously expensive," complains Sherry Sullivan, meeting and event planner for Invest Financial Corp. in Tampa, Fla. "Whether it can be negotiated depends on the property, but a lot of them say it's managed by an outside party so it's a fixed cost." In those cases, Sullivan tries to make up some of the difference by negotiating other, more flexible A/V services.

 

James Spellos

"The question is, what's the profit margin?" James Spellos asks. "That's something that's very elusive right now. It seems to me that the margin is incredibly high, which means this is a negotiable aspect of the contract."

Every hotel is different, acknowledges Spellos, and the pricing varies wildly, depending on factors such as how the hotel markets the service, meeting size, and bandwidth and IP address requirements. One planner who responded to M&C's March survey received quotes that ranged from $3,000 to $29,000 for the same program; based on anecdotal feedback, the high end of that range is not unusual. "Some hoteliers will debate this point," notes Spellos, "but that revenue is going to add up, and in a significant way."

According to a rough spreadsheet Spellos devised, hotels could be making 50 to 70 percent profit on Wi-Fi fees when you look at them over a three- to four-year period.

In far too many cases, notes Spellos, negotiating Wi-Fi is an afterthought, addressed a month or two in advance of the event. "It must be part of the contract conversation," he says. "As with room nights, food and beverage, A/V and other costs, it has to be part of the conversation at the point that you're considering a property. Addressing it at the point of contract gives the planner far more leverage. Some planners are now saying, if you can't provide us what we need at a price that is reasonable, we may or may not choose to use your property.' It's starting to become a deal-breaker."

Another common misstep is that planners who do negotiate don't have any idea whether they're getting what they've asked for. In an educational session Spellos created and has moderated, "The Meeting Planner's Guide to Internet Connectivity," he often takes an informal poll of his audience. Typically, about 70 to 80 percent of planners say they have negotiated Wi-Fi and bandwidth. But about 80 percent say they don't address those details when they do site inspections.

Others are particularly dogged about their connectivity requirements. "I am always doing walk-throughs and testing upload and download speeds throughout our potential venues," notes Ludmila Leito, communication and events coordinator for Silver Spring, Md.-based General Conference Auditing Service. "When there's a problem with the Wi-Fi, it's one of the first things we hear about from frustrated attendees."


Making sense of pricing
One major peeve planners cited in M&C's recent research is the lack of consistency in Wi-Fi pricing. "It's been all over the board in our industry for a long time," says Dominguez. "But we are now in an age of consolidation, where there are only so many companies that can provide the service and infrastructure for us. Because of that, we are now getting into some efficiencies and consistency on pricing models."

It's getting better, agrees Spellos, "but it's still the Wild West out there. It's not at a point where I think it's stable, and I don't think it necessarily will be. We're in an industry that has never had standardization: No two meetings are alike. No two properties are alike."

What's most important now, says Spellos, is for planners to educate themselves about the technology that is required for their meetings, because the quality of the service trumps cost. "The stability of the connectivity is truly more important than the price you're paying," he notes. "If you don't have the connection, then you sabotage your meeting goals."