Multi-Unit Broadband Market Hitting Some Bumps

The market for multi-hospitality unit (MHU) broadband hardware and services will resume robust growth next year and surge from $59 million in 2000 to $679 million in 2005, according to research by Cahners In-Stat Group.

For now, the drastic tightening of capital markets is forcing a slowdown in the deployment of broadband connectivity in hotels and apartments and the market is experiencing attrition of providers. Remaining providers have been forced to scale back deployment schedules.

The MHU broadband market arose as business travelers relied more heavily on the Internet to send and receive email and tunnel into corporate virtual private networks. Hotels and service providers have responded by delivering broadband via wired and wireless technologies to guestrooms, lobbies, meeting rooms and even at poolside.

In-Stat’s report, “Wet Bars, HBO, and High-Speed: The Hotel Broadband Market,” found that hotels offering broadband benefit through increased guest charges, e-commerce revenue, market differentiation and increased customer loyalty. By 2005, more 10,000 MHU properties will supply broadband connectivity to guests, In-Stat found.

According to a report by Allied Business Intelligence, the global multitenant unit, multidwelling unit and hospitality markets will generate more than $2.6 billion in equipment revenues by 2006, up from $500 million in 2000. The hospitality market will generate most of the revenue.

A survey by CEL & Associates for the National Multi Housing Council (NMHC) found the dramatic rise in new technologies is changing the way apartment residents view and use their apartments. The survey suggests that high-speed Internet access is becoming a must-have amenity for apartment residents, in many cases because they want to stay connected to work-based projects. Twenty-three percent of apartment residents currently have high-speed Internet access. Of those that do not, 45 percent intend to seek such access this year. Fully 47 percent of apartment residents indicated that the availability of high-speed Internet access would affect their decision to rent a particular apartment in the future.

Other results from the NMHC survey include:

• The majority of U.S. apartment residents have a desktop (79 percent) or laptop (61 percent) computer in their homes, and they spend one to four hours per day on those computers.
• Eighty-two percent say they spend at least some of their “computer time” on work-related projects, with 25 percent spending at least half of their time on work projects.
• Seventy-seven percent of U.S. apartment residents are connected to the Internet, and they pay an average of $28 per month on the service.
• Among apartment communities providing high-speed Internet access, 41 percent charge extra for the amenity; 59 percent do not.