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This is spot on for how the hotels operate. Everything is a cost on top of already slim margins and if it doesn't contribute to an extra dollar in the till, they won't pay for it. I used to work for a company that internet access at a large number of hospitality locations (never did ad injection, but we talked about the possibility regularly) and the typical billing model was for us to get a percentage of the cost to purchase access, or charge the location more to provide free access. The normal model was that the brand owner would sign a deal that x% of the franchise operators would use our service and then the operators would fight tooth and nail to keep it from going into place. We did full PMS integration, 1-800 support lines, were a top provider and operators would still fight it on the basis that they thought that the fact it wasn't free would impact their people staying there, but were unwilling to pay extra for it to be free. The plus-side is that we worked extraordinarily hard to make sure that once service was provided (after clicking through the terms of use or paying) that no traffic was discriminated and what the each user received was the best that could be provided and was just as secure as any random computer on the internet. Use of subnetting, vlans and disallowing communication between switchports was common, though nothing can be done to protect against someone connecting to the same wireless network because it's impossible because even if encrypted, the keys would need to be publicly available (negating the protection of the encryption) and not nearly enough devices support 802.11x or client certificate authentication.

I sometimes reminisce about the things we did, but even if you refuse to race to the bottom, you get dragged down by a Linksys router and consumer grade internet connection even if the experiences for guests is markedly lower. I'm much happier to now be working in and industry where our customers, and our customers' customers, value the work that is done and pay accordingly.

The margins for a hotel aren't that slim in my experience. I worked IT at a hotel for 11 years, and the standard rate for a room ($169 at the time) was well above the break-even cost for a room (around $30-40 for all related labor and services). We never did charge for internet access for the simple reason that the required support load for a paid service is far lower than the support load of a free service (the executive managers were easily talked out of it the couple times it did come up).

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