How Hotels Benefit From a Utilities Portal
By George Plattenburg Managing Partner, Burton Energy Group | April 27, 2014
All hotel owners and operators are interested in cutting costs without compromising on guest satisfaction, and many of them also have adopted or are considering sustainability programs. A focused effort to reduce energy and water consumption and costs is good for the planet, good for the bottom line of a hotel or portfolio of hotels, and is the aspect of a sustainability program that typically delivers a measurable ROI. An energy or utilities portal is a web - based information and reporting platform that brings cost cutting and sustainability tracking together. This article will help hotel executives and general managers think about their utility information in a new way, a way that can provide meaningful insights into improving their profitability.
For most hotels, utilities are the second largest variable cost behind labor. The range of hotel operating revenue that utilities represent is usually between 5% and 8%. Where a hotel falls in this range depends upon a number of variables including service class, whether the hotel has a laundry operation, whether the hotel has a pool and spa or an atrium, how many restaurants are on site and how many covers are served, and your local utility costs. It's important to begin your journey to improved profitability via a utilities portal by first understanding your utility costs. In addition to percentage of revenue, it is useful to view them as cost per available and occupied room.
Many hotel brands have adopted a standard utility consumption reporting tool as part of their green branding efforts, but struggle to gather accurate data in a timely fashion. At the same time, many hotel operators see compliance with this information gathering as a necessary nuisance and the fulfillment of their sustainability efforts. In reality both parties are leaving tremendous value on the table by not implementing a more robust and meaningful utilities portal. First, let's take a look at the kinds of information you will want to inform your utility portal, and where and how you can get it.
The Information is on Your Bills
Utility bill data management provides an important foundation for all other energy management services. The data contained in these bills include the information necessary to manage your facilities' usage and costs for electricity, natural gas, water and sewer, and any other recurring utility charges. The challenge facing hotel brands, ownership groups and operating companies is to capture this information in the easiest, most cost effective, and most reliable means possible.
Your utility bill includes a lot of useful information, including your total consumption and the costs you incurred related to that consumption. A lot more good stuff is on there, though, such as your rate classification, the days of your billing cycle, the various components that comprise your bill, and how much you used during your heaviest consumption period. A utility portal begins then with the capture of this data, followed by analysis made possible by combining this with other variables that affect and might explain utility consumption at your hotel including occupancy, covers, and weather. This sounds like an easy thing to accomplish, but in practice it turns out to be much harder than expected.
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