10 Ways to Better Manage Your Energy Budget
By Jim Poad Director of Client Solutions, Advantage IQ | August 03, 2010
With skyrocketing fuel prices eating into profits, hoteliers have few reservations about cutting energy expenses. They're adjusting thermostats, dimming lights in lobbies and hallways, consolidating trips for supplies, and even posting signs that ask guests to "please reuse towels."
While these are all good ideas, they're really just a start. To maintain or even maximize profitability, hoteliers need to go beyond mere cost-cutting and step into the realm of energy budget management. It can be a very effective strategy for reducing operating expenses and is something that, surprisingly, many hoteliers are overlooking.
That's too bad. This year, hoteliers will spend over $5 billion on energy expenses. In fact, utility expenditures represented the fastest-growing expense for hoteliers, increasing an average of 12 percent per year from 2004 to 2006, according to PKF Consulting's Hospitality Research Group. It's likely that energy costs will continue to climb in the foreseeable future.
Fortunately, an energy consultant can help hoteliers reduce operating expenses as much as three to five percent. An added plus: implementing an energy budget management plan can green your hotels, which may help drive revenue by attracting increasingly environmentally conscious travelers.
Better still, engaging an energy consultant is a low-risk, high-return approach that typically has a rapid and substantial ROI. Here are some areas that an energy consultant should be focusing on and what you can do to best manage and engage the relationship.
To ensure that your energy consultant can accurately budget
and plan for your future, provide them with utility bills collected from the
prior year at a minimum. This will provide your energy consultant with an
accurate picture of what they're working with, what they should expect, and
how they can affect change. If you don't have them anymore, historical
invoices may be available from the utility, though even historical expense
reports can be a proxy for consumption history. Current operational
procedures and recent capital or infrastructure investments that affect
energy consumption would also be beneficial.