The operational costs of telecommunications systems in hotels, especially room phones, have seen significant fluctuations in recent years. Despite the decline in guest usage of in-room phones, maintaining these systems still represents a notable cost for hotel operations.
Declining Usage and Revenue
Historically, hotel room phones were a significant source of ancillary revenue, but this has changed dramatically over the past two decades. In 2000, telecom services generated $1,274 per available room (PAR), but by 2011, that figure had dropped to just $269 PAR—a staggering 79% decrease. This decline in revenue reflects the growing trend of guests relying on personal mobile devices rather than in-room phones.
Rising Telecom Costs
Despite the declining revenue from room phones, the costs associated with maintaining telecom systems in hotels have continued to rise. From 2015 to 2019, the cost of phone service in U.S. hotels increased at a compound annual growth rate (CAGR) of 5.7%, while internet service costs grew even faster at a CAGR of 16.1%. Combined, telecom costs increased at a rate of 9.7% per year during this period.
These rising costs are driven by hardware upkeep, service fees, technical support, and labor costs, despite the diminishing role room phones play in the guest experience.
Cost Breakdown by Hotel Type
Telecom costs vary significantly depending on the type of hotel. In 2021, IT department expenses, which include telecom costs, averaged $766 per available room (PAR) for U.S. hotels. This accounted for approximately 1.9% of total hotel revenue. However, this figure varies greatly by hotel type:
- Resort hotels: $1,558 PAR
- Convention hotels: $867 PAR
- Full-service hotels: $850 PAR
- Limited-service and extended-stay hotels: approximately $400 PAR.
For limited-service and extended-stay hotels, telecom costs are typically split evenly between phone and internet services. For larger, full-service, convention, and resort hotels, system maintenance and administrative uses dominate telecom costs, with guest usage accounting for a minimal portion of the expense.
The Profitability Challenge
The combination of rising telecom costs and declining guest usage has placed a strain on hotel profitability. By 2011, for every dollar of telecom revenue earned, hotels were spending $1.46 on telecom-related expenses. This imbalance has only worsened as room phones generate less revenue, while the costs of maintaining the telecom infrastructure continue to grow.
Alternative Solutions to Traditional Telecom Systems
As the relevance of traditional telecom systems in hotels continues to diminish, many properties are exploring more modern communication alternatives. These solutions aim to reduce costs, improve efficiency, and enhance the guest experience:
- Guest Messaging Software: Platforms like HelloShift and Whistle enable hotels to communicate with guests through SMS, WhatsApp, and social media, reducing the need for in-room phones.
- Mobile Apps and Digital Concierge Services: Apps like HotelFriend provide digital concierge services, room service requests, and more, directly through a guest’s mobile device.
- Wi-Fi Based Communication: Guests can use robust hotel Wi-Fi networks for voice and video calls via Skype or WhatsApp, minimizing the need for traditional phone lines in rooms.
- AI-Powered Chatbots: Platforms like Akia use AI chatbots to handle routine guest inquiries, reducing the need for human-driven phone-based customer service.
The DialZero Approach: Revolutionizing Hotel Communication
In response to the evolving guest communication landscape, DialZero offers a cutting-edge solution that addresses the key pain points hotels face when maintaining outdated telecom systems. Unlike traditional phone-based communication, DialZero leverages modern technology to streamline interactions between guests and hotel staff, making it a more efficient and cost-effective option.
Seamless Guest Experience
With DialZero, guests no longer need to use in-room phones to communicate with hotel services. Instead, they can scan a simple QR code provided in their room, instantly connecting them to all hotel amenities and services through their mobile devices—no app downloads or logins required. This frictionless approach to guest engagement not only meets modern travelers' expectations for convenience and speed but also drastically reduces the need for physical phone systems in each room.
Cost Efficiency
By eliminating the need for traditional phone hardware and associated maintenance costs, DialZero allows hotels to significantly cut telecom-related expenses. The platform operates entirely in the cloud, which means no more costly repairs, replacements, or updates for outdated phone systems. Additionally, the scalable pricing model ensures that hotels only pay for what they need, making DialZero a flexible solution that can fit within any hotel's budget.
Improved Operational Efficiency
DialZero also enhances operational efficiency by consolidating guest communication into a single, easy-to-use platform. Front desk staff and other hotel personnel can manage multiple guest requests at once, freeing up valuable time that would otherwise be spent answering phone calls. This shift not only streamlines internal operations but also improves response times, leading to higher guest satisfaction.
Sustainability and Future-Proofing
In an era where sustainability is becoming a growing priority for many hotel operators, DialZero supports eco-friendly practices by reducing the need for physical devices like in-room phones. Fewer devices mean less electronic waste, and cloud-based operations reduce the hotel’s energy footprint. Moreover, as the technology landscape evolves, DialZero is positioned to adapt, ensuring hotels stay ahead of guest expectations and industry trends without needing constant overhauls of their communication systems.
Conclusion
While traditional telecom systems in hotels are increasingly becoming outdated and costly, new technologies provide more efficient alternatives. By adopting modern solutions like guest messaging platforms, mobile apps, and cloud-based systems such as DialZero, hotels can significantly reduce their telecom expenses while improving the overall guest experience. DialZero not only addresses the current challenges of telecom cost management but also sets hotels up for a more connected and efficient future—where guest engagement is seamless, staff operations are optimized, and costs are kept under control.
