If all pay-per-view entertainment available in the U.S. is lumped together, sex comes second — after first-run movies but before concerts and sporting events. According to entertainment industry analyst Dennis McAlpine, a partner in McAlpine Associates, the “buy rate” for in-home pay-per-view adult entertainment delivered via cable or satellite is between 5 percent and 10 percent. The buy rate goes up as the content becomes more explicit, topping out at about 20 percent. (Ironically, one of the largest providers of in-home adult entertainment is Direct TV, which is owned by Rupert Murdock’s News Corp. News Corp. also owns conservative Fox News.)
In hotel rooms, however, the buy rate skyrockets to as much as 50 percent, according to recent estimates. McAlpine said although that represents only 5 to 10 percent of any hotel chain’s bottom line (but as much as 70 percent of in-room profits), erotic entertainment is still a significant revenue generator because it requires no investment on the hotel’s part. Under contracts with LodgeNet and On Command, the two largest purveyors of on-demand in-room entertainment, hotels receive a percentage of each pay-per-view purchase.
Hotels were among the first publicly traded corporations to profit from porn, although shareholders won’t find exact figures in their annual statements. Sex and other on-demand fare typically are lumped together under the heading “pay-per-view revenues.” Partially, that’s for reasons of convenience, but it’s also so corporate executives don’t have to field angry calls from conservative shareholders who, while they want to see their investments grow, don’t necessarily want it bandied about publicly that they profit from — or even worse, support — something as embarrassing as sexually explicit content.
Hilton Hotels, Marriott International, Sheraton and Holiday Inn are among the largest hotel chains to offer explicit in-room entertainment. Until 2000, Corpus Christi, Tex.-based Omni Hotels was among the illustrious brotherhood of sex purveyors, too. That year, however, responding to what it perceived as “a growing need for corporate America to support pro-family issues," Omni struck a deal with LodgeNet under which adult channels would be stricken from the rooms at all 80 Omni-owned and managed properties. The move cost the company an estimated $1.8 million per year, according to president Jim Caldwell. Omni claims to have recouped the losses by selling more family oriented entertainment.
Despite increasing pressure from conservative groups like Cincinnati-based Citizens for Community Values — which in 2003 contributed to the removal of pay-per-view porn from a group of hotels in Ohio and Kentucky under threat of prosecution for “pandering obscenity” — representatives of other large hotel chains remain firmly committed to the decision to let pay-per-view porn remain on guests’ menus. Most say they respect guests’ ability to choose for themselves what kind of entertainment is appropriate for them. Some go so far as to say their guests demand erotic viewing options, and to drop them would cause not only a plunge in pay-per-view revenues, but also a decline in customer loyalty.
That view is not universal. When it comes to hotel erotica, the so-called “prudish” U.S. may be pulling ahead of some European countries typically seen as more liberal. Many of Sweden’s hotels became porn-free in April, after the government agency that controls where military members, civil servants and politicians may stay blacklisted all properties that offered in-room adult entertainment, effectively canceling the demand except in properties that cater primarily to foreign tourists. The Netherlands outlawed hotel porn in 2003, and since 2004, unionized hotel staff in Norway have been engaged in a campaign to convince their government to adopt a similar policy. Most recently, Northern Ireland has begun to consider outlawing in-room porn after an assemblyman made that goal part of his personal crusade against “the normalization of pornography in the British Isles.” Dr. Esmond Birnie points to potential “dangerous working conditions for hotel staff,” not the “immorality” of erotic entertainment, as his major concern about the issue, alluding to sexual harassment of female employees and unsanitary conditions in the rooms as direct results of adult entertainment.
