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Archive for August, 2009

Decaying Business Models

by Spiffre | 16 August 2009 | Business | 1 Comment

Wow, long time without a post! I need to get more serious about posting frequency.

So here I am, back from a road trip across California, with yet another example of dusty business models that make you want to shake your head. In a little more than two weeks, I’ve seen more than a dozen hotels, hostels and motels. In each and everyone of them, my friend Steven tried to access the Internet through WiFi, and,  finding myself without anything better to do at those times, I started noticing the following trend: Full fledged hotels want to make you pay for WiFi access, while youth hostels and model don’t. Without any kind of insider information, I can only guess how this came:

When the new and expensive wireless technology became available, large hotels were the only/first ones able to afford it. Smelling the possibility of adding value to their customers’ experience, they proposed a service that clients liked and were glad to pay for.

Fast forward for couple of years to a world were wireless Internet technology is much more affordable. Smaller businesses (motels, youth hostels), in an effort to stand out, decided to offer the very same service, except for free. Now that it cost almost nothing, it wouldn’t impede their margin much, and would make for a nice gesture for their clients; after all, nobody likes to stay away from news and mail, nowadays. And sitting all the way across the ring are the hotels, used to take that money from their customers, who still don’t see why it would ever change.

Too bad for them of course, as they are now comparatively under-serving their customers. All of this just because they were busy looking the other way (voluntarily or otherwise) while free internet access became the norm.