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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Coming up in February 2019...

Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.