Local Media Watch

As many of us have read over the past week, some major hotel chains — Hyatt and Hyatt Place Hotels, Omni and some Starwood properties — have made the decision to remove Yellow Pages directories from their hotel rooms. (Although a call to our September conference hotel, Atlanta’s Hyatt Regency, revealed it has yet to receive notice from its headquarters regarding this decision.) According to The Charlotte Observer, “The chain has dumped in-room phone books ‘primarily due to the convenience the Internet provides.’ ”

While this may be positioned as a “green” decision or one that is based on the belief that people use the in-room Yellow Pages less frequently than they do online search, the real reason for the move is likely more about revenues than convenience. At many major hotels, in-room high-speed Internet access (HSIA) is a paid commodity. According to a white paper by Nomadix, a BusinessWeek survey “respondents ranked HSIA as the second most important attribute they consider in making a hotel selection decision.” And according to Gartner Group, “there are 36 million business travelers in the U.S., 75% of whom carry laptops.”

Based on demand and the increasing number of business travelers who take laptops with them and spend greater amounts of time online using VoIP and Web-enabled services such as video and CRM connections, the demand for HSIA has increased dramatically. With a slowdown in the travel market, hotel chains often turn to what Hotel Executive Magazine calls secondary sources of revenue outside room rentals, including on-demand movies, valet parking, spa services and HSIA. Oftentimes these secondary revenue sources produce higher revenue gains as compared with room revenues. By eliminating the trusty Yellow Pages directory from hotel rooms, hotel chains make using the Internet a must when travelers are seeking local information and services. By increasing the demand, they greatly improve their ability to drive additional revenues in a key growth category.

With most mid- to upper-tier hotels charging for HSIA use, this becomes a significant secondary revenue source. So let’s call this trend what it really is — an expanded revenue opportunity for hotel chains that generates needed revenue as room profits decline. The reality of this move, however, ignores the needs of business and leisure travelers who want and need easy and free access to local businesses and services. That just doesn’t make sense.

This Post Has 11 Comments

  1. Michael: I totally agree with your post. In my recent stay at a Westin, I was almost going to bite the bullet and pay $14.99 for Web access because I needed three YP lookups. On a weekend. But luckily, my wife found the print YP just before I approved the purchase…

  2. Growth of mobile local search could be a way around someone having to pay 14.99 just for a few lookups. Just use Google mobile maps or similar. There is considerable penetration amongst business travelers that have smart phones and data plans. But for most other travelers (and until mobile local search becomes more of a mainstream thing), your point is well taken. From a PR standpoint, i’m not surprised they’re spinning it as a ‘green’ decision.

  4. I saw the press on this last week and have been chewing it over a lot for the past few days. According to the AHLA (http://www.ahla.com/content.aspx?id=3448) in 2006 there were 47 K hotels with over 15 people for occupancy with nearly 4.4 MM available hotel rooms with an average of $ 61.93 revenue per available room (RevPAR).

    Do the math: if you earn 10 – 15 dollars daily for high speed internet, that’s a 16-25 % premium on the room. Even if phone books were free, it still takes time and money for hotel employees to put them in every available hotel room and replace them every year. Almost every business traveler would be reimbursed for the internet service, so why wouldn’t they get the service. I’m sure that the tech support costs for these hotel internet services must be less than the aggregate cost of keeping all 4.4 million rooms stocked with current print YPs.

  5. I actually thought the hotel would have done this sooner but I guess the Green bandwagon is getting hotter these days. This is a win win for the hotels.

  6. The industry might need to get creative in its dealings with hotels. It can’t afford to lose key distribution points like this. Maybe the companion should be the preferred product for hotels, or even a custom visitor product that is very small in scale, with limited headings. I still see “Where” magazine in a lot of hotel rooms. This won’t change the hotels’ self interest in getting rid of the paper product, though it just might slightly diminish the arguments that this decision is about saving space and trees. The other way to go is to do some joint promotion of the local IYP with hotels, so at least the URL is right in the face of local business travelers as they fire up their laptops using that $14.99 connection. Then the product has to deliver a good local search experience. Just some off-the-top ideas.

  7. Having worked for both hotel companies and a YP publisher my view still stands that this is about revenue. Hotels are required once per year to re-stock directories in the rooms and it is of little consequence to the hotel staff compared to their daily tasks. For the directory publishers, hotel and motel agreements (which often provide free advertising to the hotel or motel) are key for distribution and usage since travelers are a captured audience who are generally unfamiliar with the town.

    Mid-tier and upper tier hotels have a much higher average daily rate but often suffer from lower occupancy as compared to the economy tier hotels. Becuase of this challenge, secondary revenues are vitally important to supplement low occupancy.Free access to local services and products is important and should not be limited by a $14.99 daily HSIA charge.

    The best outcome is that publishing companies work mor ein partnership with hotel chains to develop products that are seen as useful and add value to the trvelers stay as Charles Laughlin suggests.

  8. Yellow pages in the classic convention is outdated. video will change the small video advertising landscape and we at Jippidy.com plan on leading the charge. While video may not be necessary for all products, we do believe it can really help small business owners sell intangible services they may offer.

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