Last Wednesday I wrote that Starwood is introducing free internet for all guests and that this follows Marriott and also IHG.

At the time I wrote,

It will be interesting to see how long Hyatt (which just extended its room type guarantee to all members) and Hilton can buck the trend, or whether they’ll lose business to Marriott, Starwood, and IHG.

Now we know, at least for Hyatt.

Starting in February, all Hyatts will offer complimentary wireless internet in guest rooms and social spaces (presumably this excludes conference rooms) to all guests.

• They won’t require a loyalty program account to get the internet.
  
• They won’t require booking through their own booking channels, excluding online travel agencies (as Marriott and Starwood policies require), either.

Hyatt’s Platinum and Diamond members will receive premium speed at hotels where there’s a differentiation. (Hotels throttle speeds because a small number of guests use the majority of bandwidth.)

Clearly internet connectivity has become a ‘basic utility’ like running water when staying somewhere. It’s expected, not something that can be charged extra for any longer. Bundling makes sense when marginal costs to provide a service are low (and contra airlines charging checked bag fees, there’s no distortionary tax effects).

Presently there are really two benefits to Hyatt Platinum: free internet and 2pm checkout. Come February Platinum will mean getting upgraded internet in some hotels and 2pm checkout. While this move doesn’t take anything at all away from the Platinum level, it means there’s less to distinguish that level from a basic member. Strictly speaking there’s also a 72 hour availability guarantee (paying an override rate) and a 15% bonus on points-earning for spend with Hyatt hotels. But those aren’t really top line benefits.

As Hyatt improves the guest experience for all guests I think they’ll also need to improve the marginal experience for Platinum guests specifically as well. Diamond strikes me as sufficiently rewarding to not need special attention here as a result of this change — breakfast or club access and confirmed suites remain meaningful benefits to Gold Passport’s top published tier.

Meanwhile, Hilton now stands alone as the major chain that hasn’t announced free internet for all guests. Tick, tock.

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