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The rapid decline of the hotel industry’s telecom revenues

Excerpt from Lodging Magazine

Dec 05, 2012 12:54 am

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“Bring your own digital” should be the new mantra for hotels, with only Internet access being their responsibility.

— Rafat Ali

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Revenues from telecom—phones, fax machines, and Internet connections—at the average U.S. hotel has declined from a peak of $1,274 per available room (PAR) in 2000 to $269 PAR in 2011, a 79 percent decline. During 90s, telecom revenues used to account for 3 percent of total hotel sales. In 2011, that number declined to just 0.6 percent of sales.

It now costs most hotels to provide telephone service to their guests. In 2011, for every dollar of telecom revenue earned, the average hotel spent $1.46 to pay for the cost of the calls, switchboard operators, and other telecom department expenses.

But, a small uptick in last few years: revenue has grown from $178 per average room in 2009 to $269 in 2011, an increase of 51 percent, mainly on the backs of Internet access revenue.

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