Internet Travel Monitor - Industry News
September 4, 2003

High-Speed Hotel

Scottsdale, AZ -- A room with a view and high-speed may become a standard request among travelers. Research from In-Stat/MDR indicates that the hotel broadband market is positioned for future growth, and Pyramid Research expects hotels to become the new U.S. hotspot.

In-Stat/MDR reports that, despite the downturn in the travel industry, hotels now perceive broadband as a necessary service offering to remain competitive in the current environment. As a result, there has been a significant shift in the market from being a service provider driven one to what is now a demand driven business, both on the part of the guest and hotel. "

Hotels are acting on the new vision of broadband's importance to their competitive ability, and more and more properties are offering high-speed access as an amenity," says Amy Cravens, senior analyst, In-Stat/MDR. "This renewed strength in the hotel broadband market will be reflected by an increasing number of rooms deployed each year."

According to In-Stat/MDR, the global number of hotel rooms with Internet connections is expected to rise from less than 400,000 in 2003 to nearly 2.3 million by 2007. North America leads the worldwide market, Asia Pacific represents strong opportunity, and Europe is expected to display considerable growth in 2004.

Pyramid Research supports In-Stat/MDR's findings of U.S. dominance, with expectations that the number of Wi-Fi hotels will reach 5,000 by the end of 2004.

"Wi-Fi is quickly becoming a 'must have' amenity for mid-size and larger hotels," said Pyramid Research's John Yunker. "In addition, many hotel chains are now offering Wi-Fi access for free, which is driving usage and forcing competitive chains to follow along. Even hotels that have begun offering Wi-Fi for free are making money from the service through higher occupancy rates."

Yunker's analysis revealed that it is less expensive to install Wi-Fi services than to individually wired guest rooms. Cable or DSL costs an average of $285 to $450 per room, while Wi-Fi would lower the per room installation cost to roughly $225.

Pyramid reports that while only 1,000 hotels globally offered some degree of Wi-Fi in 2002, the number will reach 5,000 by the end of 2004, and surge to roughly 25,000 hotels globally by 2007.