High-Speed Internet Access into Hotels Predicted to be $1.1 Billion Market by 2006.
LOS ANGELES--(BUSINESS WIRE)
In a new report published today, the Executive Insight analyst team estimates that 1.5 million U.S. guest rooms will offer plug and play high-speed Internet access by 2006.
For any business traveler who has ever crawled beneath their bed to connect their laptop's modem to the Internet, this news holds the promise of ubiquitous easy access.
According to the analysts, this is not just another hockey-stick forecast. "Price erosion for net access will see revenues shrinking after 2007," said report co-author Sandy Fitchet. "This won't be an enduring revenue opportunity for hotels -- first movers will get the lion's share of the business."
These findings will be available from Executive Insight in a research report package called "Broadband for Road Warriors: What Works, Who Pays, How to Win."
"While the initial foray into this industry by high-speed Internet providers was disappointing, the market opportunity is robust," explained Tara Dunning, co-author. "Vendors and hoteliers have been intuitively aware of the sizeable revenue potential. Many are scratching their heads trying to figure out how to get a piece of that pie without losing their shirts doing so."
According to Dunning, issues such as take-up rates, what and how to charge guests, network security, customer service, and high installation costs complicate the planning process. "Net access in hotels is a billion-dollar business with returns that exceed minimum investment criteria, if executed right," Dunning said. "The information and recommendations in our report are designed to help all involved in the hospitality market from an operational, executional, and financial perspective."
"Broadband for Road-Warriors" was written specifically to analyze these issues and devise business models that will work for both the vendor and hotelier side. The package includes a comprehensive 140-page report that provides quantified analysis covering end-user demand, financial returns from deployment, market growth projections, competitor profiles and practical issues around implementation. The analysts spoke with hundreds of road warriors, corporate travel planners, and hospitality and vendor industry executives.
Complementing the report is a live scenario planning spreadsheet called the ESP(TM) tool -- Economic Scenario Planning. This tool allows readers to instantly customize their own HSIA deployment based on more than 100 input assumptions and then view financial returns.
"The ESP(TM) model is quite a remarkable tool for hotel operations, IT, and finance people, as well as for product development people on the vendor side," Fitchet said. "Play with it for five minutes and you'll see exactly where the big money is hiding."
The report is co-authored by Dunning and Fitchet, highly respected hospitality industry consultants. Their firm, Washington D.C.-based Technology Management Group, specializes in the design and delivery of broadband communications services to the global hospitality and visitor-based networks market. Giles Goodhead, founder and CEO of Executive Insight, served as senior advisor on the project.
Executive Insight LLC is an information and research publisher that provides non-traditional business intelligence to senior executives. Areas of focus include telecommunications and healthcare. More information about Executive Insight and its products can be found at www.execinsight.com.
COPYRIGHT 2001 Business Wirein association with The Gale Group and LookSmart. COPYRIGHT 2001 Gale Group
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