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Hotel broadband market on upswing: Study

Broadband connectivity in hotels is fast catching up, after initial years of problems, a research firm says.

After a three-year slump, the nascent hotel broadband market is looking up, a new study says.

The number of properties with broadband deployment is projected to jump from 5,207 in 2003 to 26,828 in 2008, In-Stat/MDR said in a new study.

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The market has stabilized and evolved from five years ago, and fully recovered from near collapse in 2001, the market research firm said.

Hotels of all stripes are deploying broadband in guestrooms, seeing the service as being just as basic as a telephone or television set, In-Stat said. Expanded coverage and new applications are among factors that are fueling hotels' interest in broadband.

Hotel chains are expanding their services to include Wi-Fi connectivity in their lobbies as well as guestrooms. The number of such hotspots is rising fast, allowing business travelers facility to connect to the Internet and their e-mail accounts from hotels, airport lobbies and business centers.

However, In-Stat/MDR said, hotels are still developing the business model for their networks. Guestroom access charges bring in a decent amount of money for hotels; In-Stat estimates revenue from access service was around $153 million in 2003, and will grow to $428 million this year--and to $1.8 billion by 2008. But there are new sources of revenue as well; such as selling access to meeting and conference administrators for use by their attendees.


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"While guestroom revenue will continue to grow as a percentage of total revenue through 2004, by 2005, meeting-room revenue will begin to grow faster in proportion to guestroom revenue," the report states. "This will occur largely as a result of more properties moving to amenity pricing as well as an increase in the meeting room business, which is already showing signs of growth."