It’s hard for our generation to remember a time without cell phones, but the hotel industry sure misses those days. In a world without any personal telephones, hotel guests were forced into using the overpriced room telephones. Now, virtually no one uses those phones because they are too expensive and everyone has a cell phone anyway, and that is seriously cutting into the hotel industry’s profits. This is only a small part of the growing epidemic of switching from landlines to cell phones, with current companies such as AT&T and Verizon losing revenues on their landlines.
In the prehistoric days of no cell phones (1980s and early 1990s) hotel phones were estimated to generate 2% of profit, but now with cell phones, the cost of the room phone is three times as much as the benefit. There may be the suggestion to simply rid of landlines all together, in hotels and in homes. However, this is not logistically possible due to safety concerns. If there were an emergency, a phone needs to be in the room. Also for non-emergencies such as wake-up calls and room service, the room phones are of use. Jim Abrahamson, who runs InterContinental Hotels' operations in the Americas, said, “It’s too early to call the death of the phone.” But that doesn’t mean its getting there, and it doesn’t mean that other things are headed in that direction as well. Pay-per-view movies are slowly being replaced by cheaper options on laptops and other devices.
In another article, Jennifer Horton discusses this phenomenon and points out how pay phones have almost become obsolete, except for in airports, and landlines may soon be on their way. As of late 2007, 16% of U.S. households had no landline at all, compared to just 5% in 2004. In New York and New Jersey, landline usage rates are down 50% or more. Even businesses are ditching their landlines for more economical options, like WiFi and VoIP(voice over Internet protocol). Such companies as Ford cite many benefits including saving money on local and long-distance phone charges, freeing people up from their desks and preventing having to lay new cables. At these increasing rates, it’s difficult to dispute an inevitable end to landlines all together.
I think most of us have already considered this concept, but to me the actual numbers are staggering. I was aware that cell phone usage has overcome landlines, but in my mind, most homes still had them even if they did not rely on them. The fact that they are declining completely at such a quick rate is surprising. Also, it is hard to fathom the predicament that hotel industry is in because they are not able to get rid of the room phone, but at the same time, they are costing them much valuable profit. I agree with Abrahamson in that I do not think the phone is ready for its funeral, because I think there are still some old-fashioned folks who will keep it around for a while longer, but I cannot argue the alarming statistics and think with the coming generations will come a change in our reliance on cell phones rather than landlines.
Works Cited:
Chernikoff, Helen. "Cellphones Give Hotel Guests the Upper Hand | Reuters." Reuters. 16 Mar. 2011. Web. 20 Mar. 2011.
It is amazing how fast landlines are not being used anymore. When I am at home and someone wants to get in touch with me they call my cell phone not my house phone. Although it took a while, my parents now use their cell phones more than the landline in my house. I was surprised to hear how damaging the increase use in cell phones has hurt the hotel industry. I never thought that hotels relied so much on the use of phones for their profits. However, the fact that they cannot eliminate the phones from the rooms is also surprising. I never thought of the implications of eliminating the landlines from the rooms. Although hotels are losing profits from the lack of use of the landlines, hotels now receive revenue from the use of WiFi.
ReplyDeleteThe hotels are caught in a catch-22; they are losing profits on landlines, but are unable to do anything about it. It does not surprise me that hotels are wanting to remove the landlines from the rooms. Given the technology that we now have, landlines have virtually become obsolete. People have more efficient and convenient means of communication. When staying at a hotel, I would never think to call someone via the landline provided. The cell phone has always been the go-to device. Now, there are even more ways to communicate. Laptops provide us with many outlets, from email, social networks, to video chatting. Hotels are realizing that they can capitalize on the opportunity to charge for Internet connections. Its simply a matter of keeping up with the changing of technology and meeting customers' needs. While the hotel industry is unable to completely eliminate the use of the landline, they can exploit other opportunities to earn revenue.
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