This just in from the phone wars: We're still losing.
As many veteran travelers have painfully learned, a phone is a phone is a phone, but the more you pay for a hotel room, the greater the chance that your hoteliers will charge a fortune for your use of that phone. Consumers get some protection from calling cards (which connect you to your chosen long-distance carrier and direct the charges to your bill at home) and from prepaid phone cards (which allow you to pay as you go, at a preset rate, with a chosen carrier). But in the end, the hoteliers have us captive, and many are taking advantage.
Not all. Stay in a budget motel and all your local and toll-free calls may be free. So it goes, for instance, at the Motel 6 chain's 780 sites across the U.S. In fact, it's impossible to rack up extra charges by direct-dialing long-distance calls from your room. (For that matter, it's just about impossible to rack up any kind of extra charges because no extra services are offered.) For Motel 6 guests, the choice is: Use a calling card or purchase a prepaid phone card in the lobby and use that.
At the largest budget hotel chain in the U.S., Days Inn, spokesman David Jimenez reports that many of the company's 1,800 U.S. franchises offer free local calls and toll-free calls, and most charge no more than 50 cents.
But move up to pricier lodgings and fees kick in. When the accounting firm PKF Consulting recently analyzed revenue and expenses of about 1,500 major hotels nationwide for 1998, it found that for every $100 the typical hotel spent on telecommunications, it hauled in $227.05 from guests. That's a profit margin that rivals the money hotels make on alcohol sales (about $260 per $100).
Not surprisingly, the study's analysis found that convention hotels reap more revenue from telecommunications than resort hotels do. But across the board, telecommunications generate substantial profits. Out of every $100 the typical hotel brought in last year, the PKF study found, $2.40 was from telecommunications.
Hotels profit most when guests dial long-distance calls directly from their rooms, using no calling cards. The hotel generally routes the call to its own chosen long-distance carrier and adds a surcharge, which may be 25% to 40%.
In fact, many consumer advocates believe that some hotels take steps to nudge guests away from using their usual calling cards--even going so far as to selectively block calls. Even hotel representatives suspect this is true of some competitors.
"I don't know how many times I've been in a hotel and had my access blocked," says Motel 6 spokeswoman Carol Kirby.
A few weeks ago, I checked into an Inter-Continental hotel in Barcelona, Spain, and tried to call long distance from my room, using a calling card. My access was blocked.
This has happened to me dozens of times in U.S. and foreign hotels. Often, hotel veterans say, it's merely a matter of the staff forgetting to activate lines when new guests check in. But what if, after two calls to the operator, you're still blocked from reaching your calling card company? So it went in Barcelona. Finally the operator acknowledged that the hotel had recently changed phone company affiliations, and "some problems" had ensued. You mean, I said, not quietly, that the hotel system has blocked me from using the calling card of my choice?
Yes, she said. Then I fulminated some more. A few minutes later, she mysteriously found a solution to my problem, and for the rest of my stay, calls with my phone card were no problem.
For many travelers, however, it's just the cost of a local call that annoys. Mid-range and pricey hotels often charge $1 or more for a local call, and chains usually let individual hotels decide their own rates.
For instance, at Bass Hotels & Resorts, the Britain-based conglomerate that owns Holiday Inn, Crowne Plaza and Inter-Continental hotels (and a few other brands as well), officials say they recommend that Holiday Inn managers make local calls free to guests. But when I called around, I found that at the Holiday Inn Santa Cruz, they run 35 cents. At the Holiday Inn Anaheim, 50 cents. At the Holiday Inn at San Francisco's Civic Center, they cost 95 cents.
Most pay phones in California cost 35 cents, but since October 1997 federal law has allowed pay phone companies to charge whatever the market will bear.
At Hilton hotels, too, prices are set locally. Spokeswoman Kendra Walker said they generally vary from 50 cents to $1.25 per local call. There's typically no charge for calls to toll-free numbers of less than 30 minutes. But after 30 minutes, Hilton hotels impose a 10-cent-per-minute fee.
"People were getting online with their laptops in the guest rooms, and then leaving the room and tying up a valuable line. So we instigated a charge," Walker said.
What can a consumer do?