Seeking loyalty, Loews Hotels adds free Wi-Fi to all rooms
Loews Hotels & Resorts on Thursday said it is now offering free in-room Wi-Fi at all its properties, one of the first major luxury hotel brands to make the move despite the lucrative revenues it's giving up.
The company was making a "couple million" annually in Wi-Fi fees, Paul Whetsell, president and chief executive officer of Loews Hotels told CNBC. "But we will recapture that in loyalty and repeat business," he said.
Free Wi-Fi has been offered at lesser-priced chains, but the luxury hotels have been reluctant to make the switch, said Jan Freitag, a senior vice president at Tennessee-based Smith Travel Research.
Why? "Because they can," he said. One reason is because the corporate guests who stay at the top hotels often aren't actually the ones paying the bill.
(Read more: US business travel spending expected to rise)
"I think that's right. We've been able to charge," Whetsell said. "But it's an irritant," akin to checked-bag fees at airlines that lead to griping about being nickel and dimed, he said.
The free Wi-Fi is part of a broader program to differentiate the brand from the competition. "It helps us establish better loyalty for our customers," Whetsell said, citing $250 million in other upgrades made at his hotels last year.
The basic Wi-Fi will be offered for free in rooms, lobbies, restaurants and at the pool areas of all 18 hotels and resorts in the chain. Going forward, it will be standard at all new properties including Chicago and Orlando, Fla., said Loews spokeswoman Sarah Murov. Meeting spaces are not included in the free access and will continue to be sold to groups booking those areas.
(Read more: Inflight Wi-Fi sometimes more vital than legroom)
Previously, guests paid $14.99 to $20 per day, depending on the location of the Loews hotel. While the basic connection speed will be free, someone wanting to stream more than one movie at a time or download a 100-page PowerPoint presentation may still want to upgrade for a faster connection, Murov said.
On average, it will cost $14.95 for the faster connection, Murov said.
The higher connection speed will be offered for free to members of Loews loyalty program, Whetsell said. Other hotel brands, such as Intercontinental, have made free Wi-Fi available only to loyalty members.
The Loews move may encourage more hotels to follow. In surveys, including one from Hotels.com, free Wi-Fi is often cited as one of the most important amenities for travelers.
"It's just so foreign to millennials to pay for Wi-Fi," Freitag said. "This may be a move to appeal to the next-generation business traveler."
—By CNBC's Amy Langfield. Follow her on Twitter at @AmyLangfield.
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