Evaluate Energy Expenses to Survive Today's Economy
By Jim Poad Director of Client Solutions, Advantage IQ | May 16, 2009
According to ENERGY STARR, typical energy expenses account for more than 6 percent of a hotel's total operating costs. These costs have increased approximately 25 percent from 2004 to 2008.
By investigating procurement options, analyzing a history of utility invoices, exploring what rates you should be paying, and implementing green energy practices, operators can drive down utility costs without negatively impacting the comfort of their hotels or quality of the guest accommodations.
Profile Your Energy Costs
The first step is to develop an accurate "load profile" that reflects your energy usage. This information can be found within your utility invoices. Once you have gathered all of the demand information, a quality profile will consider how demand might have been affected by operating hours, occupancy, temperature, the amount and age of equipment, and lighting. For operators managing several sites, establishing a load profile for each site across the entire portfolio can help significantly in monitoring performance and reducing energy costs.
Next, analyze the information on the bills further. Were you billed properly? You would be surprised how often billing errors are found on utility bills. There are a lot of variables that can effect how you are billed. Review the rates to determine whether you are on the appropriate rate for your load profile.
For example, say a hotel is being billed a rate suitable for a 9-to-5 business, but obviously has different demand characteristics - it's a 24 hour-a-day operation! This qualifies it for a Time of Use rate that may be more favorable. An oversight of this kind dramatically increases monthly costs. Mistakes of this sort are surprisingly common. Operators assume that a utility rate can be reviewed once, never to be looked at again. On the contrary, rate review should be revisited regularly as sites open, close, or demand characteristics change.