Hotels lose cash on telephones
Source: Agencies |
March 17, 2011, Thursday
|
Print Edition
Print Edition
Travel today, from luggage to laptop, is increasingly high-tech. Yet every hotel room hosts a costly anachronism: a traditional telephone.
In-room phones once produced profits for hoteliers. Today they eat into earnings as guests use cell phones instead.
"Phones used to be a revenue center," said Best Western Chief Executive Officer David Kong. "Now they're a cost center."
The dwindling utility of the hotel room phone is part of a wider trend that has land lines vanishing from homes and workers doing business on the BlackBerry.
AT&T Inc and Verizon Communications Inc, the big local phone companies, are losing 10 percent to 12 percent of their lines every year to other providers, said independent telecom analyst Jeff Kagan.
But hotels can't hang up on their phone systems. Guest safety and security demand them, said Bjorn Hanson, a professor at New York University's Tisch Center for Hospitality, Tourism and Sports Management.
"We're stuck with them," Kong said.
Guests use room phones if they need to call for help. In non emergencies, they pick up the receiver to order room service and wake-up calls.
But guests save money by using their mobile phones to take or make most outside calls. "I have never used a hotel phone," said Francois Genow, 23, of Paris as he beamed his camera around the lights of Time Square. "Never."
From the mid 1980s through the early 1990s, the telephone generated about 2 percent of profits for hotels, which essentially operated little internal phone companies and charged guests the highest legal rate, said hospitality industry consultant Ted Mandigo.
A hotel now spends US$3 for every US$1 generated from in-room telephones as guests swap them for handsets, he said.
In-room phones once produced profits for hoteliers. Today they eat into earnings as guests use cell phones instead.
"Phones used to be a revenue center," said Best Western Chief Executive Officer David Kong. "Now they're a cost center."
The dwindling utility of the hotel room phone is part of a wider trend that has land lines vanishing from homes and workers doing business on the BlackBerry.
AT&T Inc and Verizon Communications Inc, the big local phone companies, are losing 10 percent to 12 percent of their lines every year to other providers, said independent telecom analyst Jeff Kagan.
But hotels can't hang up on their phone systems. Guest safety and security demand them, said Bjorn Hanson, a professor at New York University's Tisch Center for Hospitality, Tourism and Sports Management.
"We're stuck with them," Kong said.
Guests use room phones if they need to call for help. In non emergencies, they pick up the receiver to order room service and wake-up calls.
But guests save money by using their mobile phones to take or make most outside calls. "I have never used a hotel phone," said Francois Genow, 23, of Paris as he beamed his camera around the lights of Time Square. "Never."
From the mid 1980s through the early 1990s, the telephone generated about 2 percent of profits for hotels, which essentially operated little internal phone companies and charged guests the highest legal rate, said hospitality industry consultant Ted Mandigo.
A hotel now spends US$3 for every US$1 generated from in-room telephones as guests swap them for handsets, he said.
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