Hotels finding that porn doesn't pay
Marriott is the latest hotel to dump adult movies from its in-room video selection.
At one time, pay-per-view videos of the adult variety were a huge moneymaker for hotels. Chains like Marriott International (MAR) could count on "in-room entertainment" for a reliable chunk of revenue. But that's all changed, mostly because of the Internet.
The availability of Wi-fi in hotel rooms has opened up an all-new source of adult entertainment, sending the pay-per-view money stream into huge decline. Now, it's no longer worth it for some hotels to offer X-rated movies.
Marriott became the latest major hotel company to pull adult videos from its rooms. Politics is likely a factor here: Mitt Romney resigned from the board this month after being criticized for not getting Marriott to drop its adult movies, The Washington Post reports. Marriott has been pressured by conservative groups for years on the subject.
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The company said its decision was more based on economics and technology. Guests are getting adult entertainment on their portable devices now, the hotel said, according to the Post. Marriott will let its contracts for in-room adult movies run out without renewing them.
Some analysts said that pulling the movies wouldn't really hurt Marriott's bottom line. Other observers said the publicity boost will be an overall positive.
"Marriott sees porn as a rapidly declining source of income, so they [figure they] might as well get ahead of the competition and make this a good PR message," Glenn Haussman, the editor-in-chief of HotelInteractive.comtold MSNBC.com. He estimates that "mature" movies bring in 85% of a hotel's in-room entertainment revenue.
"Adult content has been the industry's dirty little secret for decades," he added. "They have made hundreds of millions of dollars -- $12.95 at a time -- by providing this content over the years."
So yes, this revenue is declining, but hotels are making a pretty penny by charging guests for Wi-fi access. One recent industry survey showed that in almost every category of hotel, wireless Internet was the most important amenity to guests. Free Wi-fi is a huge draw, of course, but some hotels get away with charging as much as $20 per night.
"As long as a leading brand does not break rank, guests are likely to keep on paying even if they don’t like it," wrote Stuart Greif, a vice president at J.D. Power and Associates. "We see acceptance of fees travelers don’t like in the airline industry with checked bags as an example."
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