Steps to Leveraging Utility Bill Data to Better Understand Your Energy Spend

By Jim Poad Director of Client Solutions, Advantage IQ | March 07, 2010

There isn't a single industry that has escaped this economic downturn. In the lodging sector, reduced business travel and cut backs on vacationing have made their mark on occupancy rates across the country. In December of 2009, Ray Cirz, chief executive of appraisal firm Integra Realty Resources, reported that the hotel occupancy rate in Manhattan fell to 75 percent for the first time since 2004. Room rates at the time were down 25 percent from the year before. It's a scenario that's been replicated in every market; with reservations down, slash rates to fill rooms. The danger of that practice? It still costs just as much to have a room occupied, unless you take steps to reduce operating expenses. So that's what many are doing - finding ways to make filling a bed less expensive.

Without a doubt, the most significant line item under a hotel's operating cost umbrella is energy. Lighting, cooling, heating, and supplying water to a hotel and its guests is pricey. Therefore, it's the smartest place to look for savings. But it's impossible to reduce energy spend without first understanding your consumption. That's where the power of the utility bill comes into play.

Utility billing is a goldmine in terms of savings opportunities, especially for multi-site businesses with numerous locations to manage. The number of errors that can be made on the side of the utility provider is shocking. Whether they're charging the wrong rates, misreading the meter, or billing past the shut-off date at vacant units, there are many ways that money can slip through the cracks without anyone ever noticing. The following are best practices for leveraging your utility bill information to better understand your energy spend.

Need a Partner?

Many hotel operators enlist the help of a trained professional to find billing errors and recover lost cash. A utility bill audit, performed by an expert from an expense management firm, is a great way to put an end to needless spending. Expense managers with expertise in utility bill audits are a worthy investment, as they have the knowledge and experience to identify errors, and the resources to process the vast amount of data accrued during the bill payment process.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.