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October 01, 2012

Hotel Guests Spend More Today on Telecom; Hotels Earn Less

By Tracey E. Schelmetic, TMCnet Contributor

If you remember the bad old days of using expensive hotel room telephones before everyone carried a mobile phone in their pocket, you might think hotel travelers spend less today than they did in decades past.

You’d be wrong. Turns out, it’s all about the data, and it’s costing us more than ever. This year, travelers will pay an estimated total of $1.95 billion in fees and surcharges, including Internet access fees, to hotels across the nation.

Image via Shutterstock

USA Today’s Hotel Check-In column recently asked Robert Mandelbaum, the Atlanta-based director of information services for PKF Hospitality Research, to discuss the state of the industry's telecommunications revenue stream -- a stream that includes Internet fees.

“The way travelers communicate on the road has changed dramatically over the years, and these changes become evident when analyzing the revenue earned by U.S. hotels from their guests for use of telecommunication devices and services,” said Mandelbaum. “In lodging industry parlance, ‘telecommunications revenue’ includes money received from the guest use of hotel room phones, fax machines, and Internet connections.”

The interesting part is that while hotel guests may be spending a lot more on telecom, the revenue hotels earn from it is actually declining. Once upon a time, telecommunications revenue accounted for about three percent of a hotel’s profits. Today, that number is down to about 0.6 percent of sales.

 “According to our research, telecommunications revenue at the average U.S. hotel in PKF's annual Trends in the Hotel Industry survey sample has declined by 79 percent since 2000,” Mandelbaum told USA Today.

The reason is, while hotel guests may be communicating more and spending more, most of that revenue isn’t finding its way into hotels’ pockets. Instead, it’s gobbled up by third-party telecom companies that enabled room-based Internet access.

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Edited by Brooke Neuman
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