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  • How energy management creates value for hotel operators

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How energy management creates value for hotel operators

Travelers expect excellent service, clean rooms, and good amenities from hotels, but energy efficiency rarely makes it to their must-have lists. Hotel operators, on the other hand, must focus on ensuring a pleasurable stay for their guests while managing the affects of energy costs on profitability. 

“Given that hotel guests and staff don’t have direct accountability for a hotel’s energy costs or any incentives to save energy, achieving an effective balance between business goals, customer needs, and energy efficiency objectives requires a strategy for converting hotel guestroom management into return on investment (ROI),” said Francois Carle, Global Hotel Solutions director, Schneider Electric.

Guestroom energy use trendsGuestroom energy consumption accounts for 40 to 80% of total energy use across the hospitality industry. Hotels spend as much as 30% of unneeded costs per room each year on guestroom energy use for “rented but unoccupied rooms.” For instance, occupants are often away from their rooms as much as 65% of the day, according to a Hotel Energy Solutions report.

Travel purpose also affects the time that guests spend in their rooms: Vacationers may visit their rooms between outings, but a business traveler is often away for all-day meetings and evening networking events.

If room comfort levels aren’t adjusted during these “away” hours, a considerable amount of energy waste can occur. By leveraging smart systems, hotel operators can factor such behavior patterns into guestroom energy management. The result can be a guestroom control solution that is cost-efficient and faster to install, and that provides comfort and simplicity of use for hotel guests.

Graphic 1: Heating, air conditioning, hot water, and lighting make up the bulk of hotel facility energy consumption costs

Maximizing ROI of an energy management systemEnergy management simplification and presence detection enable hotel operators to better control energy consumption. From a business benefit standpoint, a 10% reduction in energy use has the same financial effect as increasing the average daily room rate. Integrated controls allow operators to adjust heating, ventilation and air conditioning (HVAC), lighting, and other environmental factors in rooms, based on whether or not a room is occupied.

Graphic 2: Multiple ROI drivers can help hotel operators to maximize energy efficiency benefits

Hotel managers with an understanding of the following drivers can help to maximize energy efficiency benefits derived from improvements and to assure rapid payback periods.
• Installation costs: Wireless systems can help minimize costs, simplify installation without restricting daily operation, and meet budgetary allocations through phased implementations.
Management strategy: A guestroom energy management system empowers hotel operators to develop effective strategies based on real data. For instance, adjusting the temperature in a “rented but unoccupied” room can have a positive impact on profitability and operating performance.
Individual room efficiency: Hotels often have rooms that run more efficiently than others, due to aging HVAC equipment, orientation to the sun, or poor insulation and thermal leakage. By collecting energy usage statistics, hotel operators can identify and rent the most efficient rooms first to help boost profitability.
Property size: Larger hotels with multiple rooms may see an even faster ROI should management choose to set back or turn off energy use in large blocks of unoccupied rooms during slower business periods.
Local climate and variations in energy costs impact energy consumption and the ROI of an energy management system.
Guest demographics can be an indication of occupancy patterns and a guide to achieving optimum energy system settings. By assessing these patterns, hotel operators can gain a better understanding of the energy savings they can expect.
Incentives and funding: To encourage property owners to reduce their carbon footprint and dependence on fossil fuels, many local, state, and federal governments are offering incentive programs and funding packages for the installation of renewable and energy-efficient technologies.

“By understanding the key factors that drive ROI, hoteliers can ensure that they will have a simple and elegant guestroom energy management system that delivers guest comfort, meets business and budgetary needs, and pays for itself by optimizing energy efficiency and improving the bottom line,” Carle said.

Expert insights from Schneider Electric can help a hotel operator implement a guestroom energy management system that delivers ROI. For details, download “A Framework for Converting Hotel Guestroom Energy Management into ROI”
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