Over the last six years, as many hotels have continued to levy or increased various fees including telephone call surcharges, the telecommunication revenues per occupied room have declined at a compounded annual rate of 14.5 percent and 17.8 percent respectively in full-service and limited service hotels, compared to a compounded annual growth of 13.7 percent in the number of wireless subscribers in the US based on STR data. Between 2000 and 2005, the telecom revenue per occupied room declined from $4.96 in 2000 to $2.26 in 2005 for full-service hotels and $1.52 in 2000 to $0.57 in 2005 for limited-service hotels.

The following table summarizes the annual growth in hotel telephone revenues and wireless subscription between 2000 and 2005.

2000 to 2005 - Annual Growth Rates

There are many factors that have contributed to the decline in telecom revenue in the US lodging industry including:

• Increasing trend of many hotels levying various fees and surcharges including telephone call surcharges, internet surcharges and increased fax charges;
• Declining cellular phone call charges;
• Increasing convergence of data and voice into a single wireless device, enhancing consumer convenience and choice; and,
• Increasing use of email for many communications.