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Hilton Comps Internet Access for Big Spenders

From the official Hilton news release:

MCLEAN, Va.—Hilton Worldwide announced today it will offer complimentary high-speed internet access to all Gold and Diamond Hilton HHonors members beginning September 1, 2010. Elite-tier members will receive this benefit during stays at any of the more than 3,600 hotels within the company's global portfolio of 10 hotel brands, which include Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Hilton, Doubletree, Embassy Suites Hotels, Hilton Garden Inn, Hampton Hotels, Homewood Suites by Hilton, Home2 Suites by Hilton, and Hilton Grand Vacations.

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What the announcement neglects to mention is that Internet access is already free at many of Hilton's lower-priced brands. Free not just for elite HHonors members—free for all.

So, with HHonors Gold status earned after 16 stays or 36 nights during a year, and Diamond status requiring 28 stays or 60 nights, the fee waiver only applies to the most frequent travelers staying at the most expensive hotels.

Hilton is hardly alone in embracing this approach.

Marriott Rewards recently added free Internet access to the list of benefits enjoyed by its Gold- and Platinum-level elite members, following similar moves by Starwood and Hyatt.

In those cases as well, the perk is reserved for big spenders staying at high-priced properties.

What's wrong with this picture is not the awarding of special benefits to companies' best customers. That's fair and sensible. What rankles is the underlying pricing, with Hilton, Conrad, and Waldorf=Astoria hotels charging extra for a service that's offered for free at Homewood Suites, Garden Inn, and Hampton Inn.

The perverse side effect of this model is that the value proposition of pricey brands becomes "Pay more, get less." Not exactly the stuff of compelling ad campaigns. And fixing the problem for elites simply reminds non-elites that there's something unfair and perverse about the room rates charged by luxe hotels.

There are other approaches.

Omni and Wyndham, for example, make free Internet access available to all members of their frequent-stay programs, not just elites.

And Best Western offers free Internet access for all customers, not just elite members of its loyalty program. That is almost certainly the future of the Internet access fee.

Eventually, free Internet access will be the rule rather than the exception.

Reader Reality Check

Do hotel Internet fees matter?

Have you ever chosen to stay at a hotel because it offered free Internet access?

This article originally appeared on FrequentFlier.com.

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