Thirty years ago, the guest room phone was a strong revenue center for most hotels. Because hotel guests who needed to make calls had few options other than the guest room phone, we began to push the billing envelope with respect to the amount we could get away with charging, even for a simple local call. Rates as high as $2.50 for a local call, or $5/minute for long distance calls, were loaded into the hotel’s phone call billing (call accounting) systems.
And then came the cell phone.
For inexplicable reasons, the reaction our industry most often voiced was, “how do we get that revenue back?” For years we've heard this, and our answer (“We can’t”) did not please anyone.
Had we put our heads together and thought this through, we could have retained substantially more of this revenue than we did. How?
Before cell phones, guests put up with high phone call charges because the alternative was to find a pay phone, pay slightly lower rates, but give up the comfort and convenience of carrying out the phone conversation from the comfort of their guest room. The added value, or the avoided inconvenience, made the somewhat higher cost (over pay phone charges) of using the guest room phone tolerable.
Today, the choice for guests is their room phone or their mobile. Despite the probability that a call from the room phone will be clearer than the cell phone call, rarely is the guest room phone chosen. Why? Because we aren’t offering added value commensurate with the difference in cost.
Crazy, but the cost to provide HSIA to your guests is probably higher than the cost to provide all the phone calls they can make, but we give the one they really want away for free and charge outlandish rates for the one they can avoid using altogether.
Is it possible to do something about this? (Do we even want to? A topic for a later post, perhaps).
Using modern SIP technology, for about $200/month the typical 100 room hotel could let guests make all the North American phone calls they want. At 60% occupancy, that’s 11 cents per room night.
Hotels that cater to international travelers from specific regions can subscribe to SIP trunking from their guests’ native country, and offer free calls home.
Most obvious is what we haven’t been able to make ourselves do for 20 years: stop ignoring basic demand based pricing theory and price guest calls commensurate with what guests are willing to pay – even if that’s zero.
