Hospitality Services Programs

"It is taught in hotel management schools that successful managers' decisions begin with consideration for their guests satisfaction and conclude with the reason they are in business - to make money."

The history of guests' usage of the phone system in hotels during the past decade has been one of a continual struggle for control and profits. Ever wonder why there are so many operator service companies? The answer is that there is significant profit in hospitality 0+/0- calls.

Operator Service Calls

Prior to 1980, the only way that hotels were able to process their guests' telephone calls was through operator service from the long distance phone company, AT&T. Every call made from a hotel went to the AT&T operator for time and charges which were then called back to the hotel for manual posting to the guest's bill. The hotel added a surcharge and the guest was billed at the AT&T operator-assistance rate, plus the hotel's profit. This bill was given to the guest upon checkout.

Automated Call Accounting

In the early 1980's came the invention of automated call accounting, which enabled management to gain control of telephone calls billed from their hotel rooms. With call accounting it was no longer necessary for every call to go through as a costly AT&T operator service call. This new call accounting concept pleased hotel managers because they could capture all the billing of hotel calls - at one-fourth the cost and four times the profit.

Telephone Calling Card

The next powerful force in the ongoing power struggle was the telephone calling card. AT&T introduced the calling card and offered it to everyone who had a telephone number to bill. These initial cards issued by AT&T were line based followed by a four digit PIN. This card promised the user a lower rate than those of the typical hotel-charged room-billed call accounting calls. With the use of these cards, the hotel's phone system could be by-passed and calls would not be billed to the guest's room. Hotels were no longer able to capture the data and retain the profit on collect and credit card calls. Since at that time AT&T was not paying commission on these calls, other operator service providers came into existence and offered to share profits with hotels. These other OSP's (Operator Service Providers) were willing to pay 50-70% higher commissions on AT&T rate tables, something AT&T refused to do.

The next move by AT&T was to issue new calling cards that were not line based on which they would not allow other carriers to bill and collect. It was then once again possible to monopolize hospitality revenue.

Currently the telephone industry is experiencing a weed-out process. Larger carriers are enveloping smaller carriers and unstable carriers are disappearing from the industry. A unique opportunity now presents itself in the hospitality industry.