Compiling Utility Data to Make Capital Spending Decisions

By Jim Poad Director of Client Solutions, Advantage IQ | October 28, 2008

The "No Vacancy" sign is the hotel operator's best friend. No matter where it's shining-from the top of Maine to the tip of Florida; from the Hudson River to the Grand Canyon; or from the Seattle Space Needle to the San Diego Zoo - the neon light signals a strong industry.

It also indicates a stable economy. The more rooms that are booked means more cars on the road, and more people traveling on planes and trains. And it means restaurants, shops, and amusement centers packed full with visitors.

But there's an underlying component that, if not addressed, can limit an operator's end profit. A crucial element here is energy costs.

When the "heads-on-beds" rate is high and hotels are fully occupied, it also means more demand on the facility's electric system-more lights turned on, more TVs left running, and more adjusting of HVAC units. Operators that do not conduct a thorough examination of their usage data-and many don't-are missing opportunities to squeeze higher profits from booked rooms.

One of the first steps is to collect historical usage data, a 12-month rolling record of the number of kilowatt hours of electricity a hotel uses. Hotel operators can learn plenty about how they use their energy over time by compiling and studying this information.

Once the historical data is compiled, hotel operators can gain a better perspective of exactly how and where energy is being used by measuring their energy usage and making comparisons to other similar hotel properties. This benchmarking process can also give hotel owners an idea of how particular sites in the portfolio are performing energy-wise against others. It will also help determine what capital improvements make the most sense.

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