The Changing Landscape of Water: How to Save On Hotel Water Demands and Expenses
By Luna Phillips Shareholder, Gunster LLP | November 25, 2018
Co-authored by Elizabeth Ross & Lauren Shumate, Gunster LLP
Across the United States, fresh water supplies are reaching sustainable limits. Factors such as steadily increasing populations, relocation of people to water-strained regions, escalating irrigation demands, and climatic events are combining to strain our nation's water resources. Readily available water supply sources have largely been allocated, so the shift toward water conservation and development of alternative sources to meet increasing demands is widespread. State and local regulations to protect the natural resource and limit demands are also on the rise.
Located near beautiful, natural wonders and in urban areas, hotels and resorts often feel the pinch of these limitations. Moreover, guests are frequently sensitive to the strain on natural resources and watch for their hotelier's eco-friendly commitments, as a survey conducted by TripAdvisor found that 79 percent of travelers look for eco-friendly accommodations. All of this comes with a price – increased demand and limited supplies drive up the price we all pay for water. With information and planning, hotel executives can make the most out of dwindling water resources – and make it happen with business sense.
Water Demands and Supply Sources
Hotel and resort water demands typically involve: potable needs for domestic-type use as well as AC cooling water and irrigation-quality water demands. Depending on facility size and visitor population, daily demands can exceed those of some cities. The Walt Disney Company (Disney), a world-wide business and environmental stewardship leader, totals their annual Theme Park and Resort water use at approximately 8 billion gallons. Taking their resource 'footprint' seriously, Disney established an action plan to accomplish their comprehensive environmental stewardship goals and targets. Understanding your hotel's water rights and evaluating options can yield a plan to improve the bottom-line and contribute to resource sustainability.
Hotel and resort potable water supplies are usually purchased, in bulk, from a public water supply utility, often in combination with other utility services, such as sanitary sewer. Careful crafting of new utility services agreement terms, understanding existing contract terms, as well as learning about your water providers' underlying water rights will help favorably secure your hotel's water budget. Here's how:
1. Potable Water Rates
Learn your current water rates and whether your purchase agreement includes terms capping future rate escalation. If not, your rates will periodically rise. Utilities typically publish their water and sewer rates, and the frequency at which they've increased. An early indicator is to check your utilities' website to learn if they have commissioned a rate study. It's a safe bet to conclude a rate study will lead to rate hikes. If so, getting engaged in the public process can help moderate water rate increases; there will be public comment and challenge opportunities.
Once familiar with your hotel's water rates, another step is evaluating whether or not water conservation makes sense. Comparing water rates and expected increases with the cost of water-saving infrastructure will help decide which path makes the most money sense, especially if cost sharing is possible.
2. Cost-Sharing Opportunities for Conservation Infrastructure
It is surprising how much public money is available to off-set water conserving infrastructure retro-fit costs. Utilities often cost share water saving infrastructure with bulk purchasers because the savings help utilities delay development of expensive new supply sources and treatment. Funding sources also include local, state, and federal governments.
For example, the San Antonio Water System (SAWS) created the WaterSaver Hotel program, which provides rebate incentives and high-efficiency fixtures to participating hotels. Beginning in 2007, the WaterSaver Hotel program paid overhead costs for a San Antonio hotel to replace its toilets, faucets, and showerheads with high-efficiency fixtures. Additionally, SAWS offered the hotel a rebate for replacing water-cooled ice machines with water saving, air-cooled models. As a result, the Hilton Palacio del Rio in San Antonio, Texas reduced water consumption by 49 percent, annually conserving 26 million gallons of water, saving $160,000 in water, sewer, and energy expenses.
In Nevada, the Southern Nevada Water Authority (SNWA) pays customers to remove grass from their property. California and Arizona have similar programs for commercial customers. The Environmental Protection Agency sponsors a partnership program called WaterSense, including partners offering rebates for WaterSense labeled products such as water-efficient toilets, faucets, and showerheads. For instance, Miami Dade Water and Sewer Department offers a $50 rebate per EPA WaterSense certified flushometer valve toilet using no more than 1.28 gallons per flush for commercial properties built prior to 1996. Denver Water provides businesses with rebates for WaterSense labeled toilets, urinals, smart irrigation controllers, and high-efficiency or rotary commercial irrigation nozzles, among others.
3. Assess Your Utility Services Contract Terms
Some contract terms drive your water bill. For example, does your water rate increase with volume purchased? Utilities often "incentivize" conservation by charging more per gallon used above a threshold. This sort of increasing block rate can also be triggered in declared droughts. If your contract has this clause, upgrading water conservation measures may make sense. So, when it's time to negotiate a utility services contract, become familiar with neighboring hotel and other large user contracts.
The governing body of your utility may post meeting agendas with links to approved contracts; the same information is probably available through a public records request. Knowing the deal others have recently 'struck' with your utility services provider will give you a negotiation head start. Finally, watch for mandatory plumbing fixture retrofit requirements; utilities may shift their regulatory requirements to use water efficiently to your hotel. This could lead to an infrastructure cost-share partnership.
4. Your Utility's Water Right
Other insightful information includes learning about your water provider's water right. Ask your provider for a copy of their water permit or contract. Peering into your provider's water right will forecast customer costs. How close is the utility's daily use to meeting their allocation cap? If close then, then it's easy to anticipate the utility may pass on the cost of demand management measures and development of a new supply sources. Proactively increasing efficiency of your use may avert an even bigger impact on your hotel's bottom-line.
Irrigation Water Supplies
In addition to public water supply sources hotel and resort irrigation supplies may come from reclaimed water or a self-supplied, onsite source.
Reclaimed water is treated wastewater that has received, at least, secondary treatment to meet water quality criteria for safe use. Reclaimed water is typically purchased, so your hotel's water right is, again, defined by contract. The topics outlined above are applicable, and possibly even more critical. Reclaimed water supplies are finite, driven by a treatment plant's flow and treatment capacity, it's important to learn how much reclaimed water your provider has committed to sell to others. Is there enough supply to meet your hotel's demands, even in dry times and in light of all user demands? If not, you may explore developing a supplemental supply on-site. Even in water limited areas, it may be possible to obtain authorization for this sort of limited use.
On the other hand, if reclaimed supplies are plentiful, then water conservation measures are usually not imposed, even during droughts. Finally, if your hotel irrigates with reclaimed water, then you could save on fertilizer costs. To gauge fertilizer application, ask your utility for their reclaimed water quality monitoring data. This will help reduce off-site discharges of excess nutrients.
On the cutting edge are hotels realizing cost savings, and water conservation, by generating their own reclaimed water source from hotel laundry wastewater then used for irrigation.
* According to the EPA, Hotel water use accounts for approximately 15 percent of the total water use in commercial and institutional buildings in the United States. However, it is estimated that commercial buildings can reduce operating costs by approximately 11 percent decrease water use by 15 percent.
* According to the Florida Department of Environmental Protection, Florida uses approximately 727 million gallons of reclaimed water every day.
Proactive and innovative solutions for securing cost-effective water supplies exist. Evaluating specific hotel and resort water supply information will help identify the most suitable approach to cut costs, find cost-share partners, and secure water rights.
 California recently passed Assembly Bill 1668 and Senate Bill 606, which set permanent targets for indoor and outdoor water consumption, with an initial per capita limit for indoor water use of 55 gallons a day in 2022 that drops to 50 gallons in 2030. State regulators are authorized to assess fines if the statutory goals are not met. Other states have adopted drought-resistant landscaping laws to ensure water conservation. (See e.g.: Fla. Stat. § 125.568 and Cal. Gov. Code § 53087.7
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