Energy prices have fallen marginally from their peak in the third quarter, but they are still more than 20% higher than they were this time last year, and with winter demand booming and the imposition of a price cap on Russian oil and gas exports earlier this week, hoteliers are unlikely to get any relief in the near future.
For years, hotel operators could reliably budget that energy outlays would account for less than 10% of their costs, but those days are over. Power prices have risen everywhere, and have quadrupled in some places over the past two years. Today, more and more hotels are looking for new ways to reduce energy expenditure, from grand investments in renewable micro-generation to saving a few cents by turning off lights.
Owners and operators are pursuing a three-pronged strategy to cut their energy bills: reducing or stabilizing their current outlays on energy; cutting their consumption, and using conservation measures to make the energy they use go further.
Price stabilization
Physical or financial engineering can be used to stabilize costs. Some larger hotels are installing renewable energy generators including solar, wind, or micro-hydro plants. These ensure a long-term supply of relatively cheap energy, but they typically require both the right conditions — extensive land holdings, reliable sun, wind, or water depending on the source — and significant upfront investment. It is a common mistake to think of renewables as free energy. Ongoing repairs from storms or routine wear-and-tear, combined with regular maintenance costs and replacement programs for solar panels and batteries can tip the balance between saving energy and creating a new hole in the balance sheet.
Some resorts have decided not to use renewables because the infrastructure can be both costly and ugly, but others have made renewable energy a selling point to a more eco-conscious demographic.
Reducing energy costs can provide financial opportunities. These range from shopping around for a supplier to negotiating a long-term contract – which may turn out to be more expensive if spot prices fall but will allow accurate budget forecasting – to buying hedging instruments like options contracts which will pay off if prices rise significantly but are sunk costs if they do not.
In many places, hotels can also access government subsidies or low-cost green loans or bonds to invest in renewable energy technology.
Cutting consumption
Much of the industry’s focus has been on cutting consumption. More and more hotels are adopting voltage optimization technology, which reduces the power fed to appliances that do not need full mains voltage, but most measures involve turning machinery down or off when not in use.
The big power consumers – climate control, lighting and kitchens – have all received attention.
Heating or air-conditioning is a huge cost center, but it can be controlled. Turning up the heating or AC by one degree can add 5–10% to heating and cooling bills. The key is fine control: being able to turn different zones on and off as needed; shutting off floors during the low season and turning down radiators, and obtaining accurate estimates of how long it takes to bring empty spaces back to temperature. It may save costs to turn the heating in a banqueting suite right down if it isn’t going to be used for a week, but not if it is only going to be empty for a day.
New-build hotels are generally much more energy efficient. They make use of natural cooling techniques, energy-conserving materials and increasingly plantings to both cool and clean the air in interior spaces.
Most hotels have already switched to more efficient LED or CFL lighting, but significant savings can be made by using time switches or movement sensors, particularly in service areas, to allow lighting systems to be turned off when they are not needed.
Kitchens are also power-hungry, and there are trade-offs here as with many energy-saving techniques. Gas hobs are cheaper to run than induction hobs, but they release more heat into the environment, requiring heavier use of atmospheric cooling. Dishwashers need to run at about 140 degrees Fahrenheit by law, but many machines run hotter than this.
It is also possible to construct menus that allow high-energy appliances like salamanders, grills, and rotisseries to be turned off for extended periods.
Energy conservation
The third strategy is to make the energy you do use work harder for you.
Some hotels are retro-fitting with energy-efficient glass or double-glazing, which saves costs but is expensive to install. For those that cannot afford a full refit, adhesive films are available that reduce heat transfer. Automatic doors can allow staff and guests to move seamlessly between the exterior and interior of a restaurant or lobby while maintaining interior temperatures.
A considerable proportion of energy conservation is down to routine maintenance: making sure filters in kitchen smoke hoods or AC units are clean; ensuring refrigerator coils are kept dust-free and insulation is undamaged; making sure water softeners are working properly to prevent limescale clogging pipes, and checking timer switches are still set. Good maintenance saves energy and prolongs the life of expensive plants.
Possibly the most important energy-saving technique is training staff to be energy aware. If it becomes second nature for them to close doors and turn off lights, or to
call maintenance if a filter needs to be changed, or to avoid booking rooms on a floor that can be mothballed for a few weeks, savings will follow.
Elevated energy prices will remain high for a while, but even when – or if – they come down, the energy savings made today will remain, leaving a leaner, more profitable hotel for years to come.