New York | PricewaterhouseCoopers research, supplemented by Smith Travel Research (STR) and Cellular Telecommunications and Internet Association (CTIA) data, indicates that telecommunications revenue in hotels has declined an average of 16 percent since its peak in 2000. During the same period wireless subscription in the U.S. has continued to increase at a dramatic pace.

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

Note: POR = Per Occupied Room. Source: Smith Travel Research and Cellular Telecommunications and Internet Association.

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.

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Kathryn Oliver