Most observers expect changes in the hotel and lodging experience as a result of the Covid pandemic that will last beyond the pandemic’s end. Various forms of “contactless” experience--ranging from keyless room entry to contactless check in to and end to daily room cleaning--are among the expected changes. But supply chains, service elements and staffing levels are likely to be affected as well.
And many expect cost-cutting measures to develop as well, given the slow travel rebound. Contactless experience will be among the ways lodging providers cut costs.
Technology and analytics will be more important as human support and interactions are minimized.
Other costs will be difficult to rein in, and might also not provide much upside to the operating cost or revenue models.
In-room phone systems in the lodging industry are likely among the necessary costs of doing business, though few guests seem to use them. And some hotels have a line item revenue gain from in-room phones that most travelers consider a tax, not an amenity.
source: PXF Hospitality Research
Of course, lodging establishments require phone systems for other reasons, including taking reservations.
source: PXF Hospitality Research
“From 2015 through 2019, total (hotel) operating expenses increased at a compound average annual growth rate (CAGR) of 2.2% at the properties in our study sample,” notes CBRE. “During this same period, the hotels’ cost for telecom service increased at a CAGR of 9.7 percent.”
“Individually, the cost of phone service rose by a CAGR of 5.7 percent, while the cost of internet service increased at an average annual pace of 16.1 percent,” says CBRE.
“The 9.7 percent combined CAGR for telecommunications cost is more than three times the CAGR for any other individual hotel department cost during the same five-year period,” CBRE says. Costs grew faster than that at upper-midscale (CAGR 21.5 percent) properties and upscale (CAGR 13.9 percent) hotel chains.
On the other hand, phone system expenses are a small part of total operating cost: less than half a percent.
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