The LA Times reported that hotel revenue from phone calls and in-room movies is drying up. Not exactly shocking, but the details are pretty interesting. From the article:
Annual revenue collected by U.S. hotels from phone calls dropped to an average of $178 per room in 2009 from $1,252 in 1999, a decline of 86%, according to Colliers PKF Hospitality Research.
The phone revenue decrease is a reminder to us of the good old days of outrageous phone charges and the guest complaints that went along with them. It is hard to believe that only 10 years ago, hotels charged $5 a minute for long distance calls. Most hotels even charged 25 cents a minute for toll free calls to capture some revenue from guests who used calling cards. Phone revenues are now down 86 percent to about $.65 per room night.
Meanwhile, income from in-room movies and games dropped to $126 per room from $171, a decline of 26%, according to the research firm.
In-room movies has fared much better and only declined 26 percent. This small decrease is somewhat surprising considering how far technology has come in the last decade. Guests now travel with laptops and have access to high speed internet everywhere. Guests can watch DVDs are stream movies from services such as Netflix. Laptops now even have a HDMI port so you can plug them directly into a television. From the article:
In fact, by embracing the technology that guests demand, such as free Internet access, free computer applications and docking stations for iPod media players, hotels have cut off potential revenue sources. According to a recent survey by J.D. Power & Associates, 55% of U.S. hotels offer online access at no charge.
Technology will continue to eat away at hotel profits. The traveler is more tech savy and more connected than ever. We are going to have to continue to search for new revenue streams.