A growing number of cafes and restaurants are keeping up with the demand for out-of-office work by fitting their venues with wireless technology. However, the new trend has created two contrasting business models. Julie-anne Sprague investigates.
A growing number of cafes and restaurants are keeping up with the demand for out-of-office work by fitting their venues with wireless technology. However, the new trend has created two contrasting business models. Julie-anne Sprague investigates.
With executives feeling more comfortable working outside the office, a growing number of hospitality operators in WA are going hi-tech in a bid to encourage them to stay a little bit longer, whether it is over lunch or to order another coffee.
At least half a dozen city-based cafes and restaurants have been fitted out with wireless technology (WiFi) that enables those with WiFi enabled laptops to access the Internet without the need to plug into anything.
Joining the growing trend of out-of-office work is fast food giant McDonald’s which is launching a major roll-out of WiFi connections, or hotspots, in WA this month.
McDonald’s Australia will fit out 12 outlets with Internet ‘hotspots’ from next month, which join two existing Perth stores as the first to have the technology.
However, the burgeoning WiFi market has presented two radically different models of adoption.
While McDonald’s joins fellow American-owned giant Gloria Jeans Coffees in entering into agreements with a major telco – which comes with a service charge – smaller Perth operators are going with a model that provides WiFi for free.
Telstra will install WiFi throughout nominated WA McDonald’s outlets free of charge and McDonald’s customers sign up for the service and are charged by the minute.
The minimum spend is $5.
Gloria Jeans Coffees has a deal with Optus, as does local cafe operator Caffissimo.
On the other side of the spectrum are several city-based cafes and restaurants, such as C Restaurant, Cino to Go (182 St Georges Terrace) and Grind Cafe, which all recently set up Internet hotspots, but offer the service free of charge.
They have paid for the setup costs and ongoing Internet fees and, according to industry experts spoken to by WA Business News, this model will win out in the end because consumers will not sign up to several telcos in order to quickly check emails.
Greg Nicolson had a wireless connection installed shortly after he purchased Trinity Arcade cafe Grind Espresso.
Mr Nicolson had tested other pay-per-use systems but said offering it free was enough to recoup costs and was a better strategy for his business.
“For us, once you have to charge someone for it then it loses the point,” Mr Nicolson said.
“We are doing it to extend the amount of time they spend in the coffee shop and these days ADSL isn’t really that expensive any more, I think it costs us about a dollar a day so the extra coffees meet the cost.
“We have had terrific response. People walk past and see the sign and decide to check it out.”
C Restaurant managing director Phill Clements said he wanted to provide a free Internet service to encourage more people to do business over lunch.
“It wasn’t about revenue raising it was to offer something different and to give us a competitive edge,” he said.
“A lot of people feel guilty about going out for lunch and we wanted to provide something that allows them to do business out of the office and even stay longer while they do the business here.”
Unified Business Systems project manager Julian Coyne, who set up C Restaurant’s network, believes offering free Internet access should be the model adopted by hospitality operators.
“It should be a value-added service because I can’t see people putting in the credit card details at the cafe or signing up to a half dozen different suppliers,” he said.
“If they want to check emails then they’ll wait the five or 10 minutes to get back to office.
“I think the waiters should stick to hospitality rather than becoming an ISP technician, they should stick to the core business and use technology to sell more of what they are doing rather than being a competitor in the telco space.”
But Mr Coyne agreed the pay-per-use model would service part of the market.
“There is a demographic that it will serve like the business traveller who doesn’t care that they have to be signed up to three different accounts because they’ll pay for the convenience, the means justify the ends but it then becomes limited.”
Westnet managing director Peter Brown said the pay-per-use model had limited value because consumers would not register with telcos in order to gain Internet access.
Mr Brown said installing WiFi was a relatively cheap exercise and the fall in ADSL costs in recent years now made it affordable for most businesses to connect to.
WiFi DEVELOPMENTS
- Restaurants and cafes are going hi-tech in a bid to encourage customers to stay a bit longer.
- More people are preferring to work away from the office but often need internet access in order to do so.
- The emergence of Internet hotspots has created two differing business models, one provides the service free of charge to customers the other requires customers to register and pay for the service.
