Want to save money? Reduce utility costs. Here’s how.

A hotel, or any business, can’t operate without power. Heat, light and water are all necessary to effectively function. According to the Urban Land Institute, of all commercial buildings, hotels are among the highest energy and water users per square foot. As a result, reducing hotel energy costs and embracing sustainable energy solutions is crucial.  

Achieving this goal is not without its challenges, as guests consume water and electricity while occupying a guestroom or in meeting spaces. Outside conditions, such as climate and utility rates, are also out of operator’s controls but factor into energy expenses.  

Across the four-year span within our managed hotel portfolio, which consists of around 25,000 rooms, our utility expenses report has shown an escalation from $6.79 per available room (PAR) to $7.58 PAR, an 11.6% increase or an annual rise of 2.8%. As a percentage of revenue, this surged from 2.8% in 2019 to 3.3% in 2022. With utility costs forecasted to increase in the coming years, hotel operators need to take action to reduce this expense.  


There are numerous energy audit templates available to assist operators in creating a baseline of data actions related to energy consumption and waste. hotelAVE updates the energy audit annually to add the latest information that can assist property managers in reviewing energy-efficiency initiatives. The current checklist has 158 items that should be checked and reviewed by the property team. Some examples of these items include the following questions: 

  • What temperature does the housekeeper set the thermostats after cleaning guestrooms?  
  • Do the stairwells and back-of-house areas have motion sensors to automatically shut off lights? 
  • Does the property have an “Opt-Out” towel and linen replacement program in place? 
  • Do housekeepers report leaks promptly? 
  • Are kitchen appliances Energy Star rated?  
  • How often are the seals checked for leaks on refrigerators and ovens? 
  • Are PTAC filters cleaned quarterly or monthly? 
  • Is the HVAC equipment checked by a licensed contractor on a semi-annual basis? 

Conducting an energy audit will provide the operator with a baseline of data to evaluate and, subsequently, come up with a plan to make changes.  


Address areas that will have the most impact and yield the best results. Select different items to address each month and develop a plan to create the desired change. Examples include: 

  • Instruct housekeepers to leave each vacant room at a set temperature point—68°F in winter and 76°F in summer. 
  • Participate in room attendant stand up meetings to explain why this is important and how they can help to reduce energy consumption by doing this simple step every day.  
  • Ask for room attendants’ assistance and make them part of the solution.   
  • Tackle a light bulb audit when the engineering team is conducting preventive maintenance checks in the guestrooms.  
  • Replace any older incandescent bulbs with more efficient CFLs or LED bulbs.  
  • A ROI analysis should be conducted on guestroom bulbs to determine if more expensive LED bulbs should be installed. 
  • Ensure that any CFL fixtures are the most efficient with improved ballasts. 
  • Ensure thermometers are calibrated regularly. 
  • Equipment used to test temperatures should be calibrated correctly to provide the user with proper data. 
  • Ensure that thermometers are checked at least quarterly to provide more accurate results. 
  • Inspect water flow rates in guestrooms. 
  • Does the hotel utilize a low-flow shower head? Are there flow reducers in the sink tap? 
  • For shower heads, 2.5 GPM or less is considered low flow. Find the lowest-rated shower possible or install flow restrictors, which are much less expensive than replacing the shower heads.  
  • For sink taps, the same type of restrictors can be used to reduce waterflow and save gallons of water over time. 
  • Install motion detection light sensors wherever possible. 
  • Back-of-house storerooms, meeting spaces and stairwells are areas that can utilize motion detection sensors to keep lights off when not in use. 
  • Conduct an audit of all spaces and change switches to sensors. 
  • Have the engineering team conduct a quarterly HVAC maintenance program. 
  • Engineering should inspect, recalibrate and clean the coils and filters on all in-room HVAC systems. 
  • Track rooms completed and ensure that the team inspects each room quarterly. 

The property general manager, along with the engineering director and housekeeping manager, should lead the efforts to create the energy reduction plan.  

John Paulsen, hotelAVE


After an energy-reduction plan has been implemented, review each of the energy audit action items implemented for success.  

  • Spot check guestrooms to ensure room attendants are setting rooms at the proper temperature.  
  • Check to see that light bulbs have been replaced. Review actions for compliance with the desired change.  
  • Assess the monthly usage of utilities on a POR and PAR basis to identify any variations. 

Results should be checked over an extended period as the desired outcome is a drop in usage over a longer period. 


After the first set of items have been successfully implemented, start on another set of items. After tackling the low-hanging fruit, the energy savings tasks will become harder to implement and undertake.  

As noted earlier, address areas that will yield the best results. Below are 10 additional actions that operators can take to help reduce utility expenses.  

  1. Check the temperature at which the hot water is delivered to the guestroom. The guestroom domestic hot water temperature should be no more than 120°F-124°F. This would mean that at the storage tank the temperature is at 145°F and would reach the mixing valve at approximately 124°F.  
  2. Have the boilers and HVAC system serviced annually by a licensed contractor. 
  3. If the state’s electric and/or gas utilities are deregulated, consider securing energy through long-term contracts to lock in favorable prices. 
  4. Consider how draperies are managed during different seasons. In winter months, ensure drapes are open to allow sunlight in. During summer months, close or partially close to limit sunlight entering the room. 
  5. Does housekeeping turn off all lights in the unoccupied guestrooms? 
  6. Turn off heat-producing equipment when not in use. 
  7. Defrost food by refrigeration rather than running water. 
  8. Shut down escalators in meeting areas when functions end. 
  9. Check the outdoor irrigation system for leaks or improperly working sprinkler heads. 
  10. Have outdoor lights on “smart” timers that go on at dusk and shut off at dawn.  

The Chinese philosopher Laozi said that a journey of 1,000 miles begins with a first step. Saving money on utility expenses also begins with a first step: a commitment to saving energy by undertaking an energy audit and developing a plan that yields reductions in energy usage. Hotels that implement energy-efficient practices will see immediate returns on their investments. However, this hinges upon active participation by key property leaders and a willing staff to ensure energy is not wasted. Take that first step today and inspire other hotels to do the same.

Column contributed by John Paulsen, SVP, hotelAVE