A rebound in business travel and competitive forces should drive hotels to ramp up their broadband usage, said Amy Cravens, an In-Stat analyst. Broadband connections are currently found in 2.5 percent of North American hotel rooms.
The travel industry, which has been pummeled by a drop in business since Sept. 11 and has seen several airline carriers either file for bankruptcy or issue bankruptcy threats, expects business travel to increase by a slight 1.4 percent, to $209.4 billion, this year, according to the Travel Industry Association of America. But business travel is expected to grow roughly 3 percent next year to $215.5 billion.
Further evidence of a broadband boost in hotels, Cravens said, is the number of shipments forecast for broadband ports, such as Ethernet or DSL (digital subscriber line). These shipments are expected to rise to over 1 million worldwide by 2006, up from 250,000 expected next year.
Revenue from broadband equipment is seen jumping to $286 million annually in 2006, up from $85 million expected this year, Cravens said. The average cost to equip a room with broadband access is around $300, she said.
Despite the anticipated growth in hotel room broadband usage, Cravens notes it will likely always remain only a small portion of a hotel's offerings.
"I don't know if it will ever grow to 50 percent of all hotel rooms in North America. To get to 25 percent would be a stretch," Cravens said. "It makes sense because you wouldn't want broadband service in all hotels, since it primarily caters to the business class."