Quick question:
Would WPA2 encryption slow down performance for hotspot in public places? if so can you estimate how much by percentage?
Of course Yes, every encryption tech. add some overhead because in terms of calculations needed to encrypt/decrypt the traffic. The exact impact greatly depends on the cpu processing power of the network device, it can vary from 5% to 30% of the maximum throughput. Real performance problem source is some kind of interference. another problems is not important.
Are you sure that the encryption is done in cpu and not in wlan card?
AES - wlan card (hardware accelerated AES encryption is in almost all chips)
TKIP - cpu
But why using any encryption for hotspots?