The hotel industry has gone through a lot of changes over the last decade. The rise of Airbnb as a competitor and disruptor, COVID protocols and travel restrictions during the pandemic, the rising costs associated with climate change, and now record rates of inflation. So not only are hotel operators facing increasing operational costs, but travelers and guests have less disposable income to invest in their travel experiences.
But not all changes have been challenges for the hotel industry. While technology led to increased competition and disruption from short-term rentals, it is also opening new opportunities for hotel operators to reduce costs, improve guest experiences, and even create new revenue streams.
Specifically, energy management smart thermostats (and the HVAC systems that back them) are revolutionizing how hotel operators not only upgrade guest experience, but reduce both overhead costs and their carbon footprint. And in doing so, they’re helping hotel operators adapt to this brave new world, its economy, and the tastes of consumers who ultimately become guests.
Smart Thermostats: What Your Need to Know
For hotel managers who are looking to both reduce energy costs and potentially generate new sources of revenue, it’s important to understand that not all smart thermostats are created equal. While consumer grade options (such as Nest or Ecobee) are suitable for single family homes, they lack the advanced features required to manage the needs of commercial properties with fluctuating occupancy and multiple common areas.
But hotel operators still have a choice of commercial-grade smart thermostats, and the one that’s right for them will depend on the size of their property and the guest experience they want to offer.
Standalone vs Networked Smart Thermostats
For properties on the smaller end of spectrum, there are standalone smart thermostats. These are installed directly in the room, interface with the HVAC unit, and monitor and manage energy consumption for that single room. These standalone options, however, shouldn’t be confused with residential thermostats, as they offer a range of features that are designed for commercial occupancy patterns.
For larger hotel properties, however, a networked smart thermostat would be the better option. By networking thermostats, hotel managers can remotely and automatically manage HVAC settings, achieving maximum energy savings across their large number of rooms and common spaces.
Both standalone and networked energy management thermostats, moreover, offer different ranges of features and come with different costs.
Door Interfaces
Standalone smart thermostats use door switches or interface with door locks to detect guest occupancy. While this theoretically allows the thermostat to detect when rooms are in use, this method of occupancy detection is not without its flaws, and also comes with the added costs of additional hardware, installation, and maintenance.
Installation
Just as standalone energy management smart thermostat systems rely on door switches or ambient lighting sensors to function, this additional in-room hardware and networking equipment often requires professional installation. Verdant’s line of energy management smart thermostat systems, however, can easily be installed by property staff in under 15 minutes per room, reducing installation costs, and providing quicker turnaround to making rooms available to guests again.
Night Occupancy Mode
Smart thermostats that rely on ambient lighting sensors are prone to setting back room temperatures in the middle of the night while guests are sleeping. Basically, the thermostat mistakes inactivity in the room as the room being unoccupied, and adjusts the temperature to non-occupancy levels — which compromises guest experience. So it’s important to choose a smart commercial-grade energy management thermostat that features a Night Occupancy Mode that ensures such setbacks never take place.
Dynamic Recovery
When smart thermostats detect a guest entering a room, they will automatically adjust the temperature back to the guest’s preferred setting. This is known as recovery.
Standalone smart thermostats feature Fixed Recovery — meaning that the time it takes to readjust room temperature back to the guest’s preference can vary based on outdoor thermodynamics, HVAC unit performance, room orientation, etc. Networked smart thermostats (such as Verdant’s VX and ZX thermostats), on the other hand, feature Dynamic Recovery, where the thermostat automatically adjust its own setback limits when room are unoccupied to ensure that recovery time never exceeds a specified time-frame.
Compatibility
Some commercial-grade energy management smart thermostats will only be compatible with equipment from the same manufacturer. Other smart thermostat systems, however, are cross-compatible with 3rd party HVAC systems, giving property owners the ability to choose a smart thermostat solution that suits their needs. Verdant’s energy managment smart thermostats, for instance, are compatible with virtually all HVAC systems, including PTACs, Heat Pumps, FCU’s, Split units, and more advanced units like VRFs, VRVs, and VRPs.
Networking Requirements
Just as all smart thermostats are not created equally, the same can be said networked smart thermostat systems. Some networked energy management smart thermostat systems require additional networking equipment, extensive cat-5 cabling throughout the property, including wireless access points for every 50-100 rooms, and signal boosters / repeaters throughout the building. With such extensive networking requirements, installation costs can be significant.
Verdant’s line of networked smart thermostats, however, require only one Verdant Online Connection Kit (or ‘gateway’) to manage up to 1,024 Verdant EMS Thermostats within a single property. In fact, this is one of the main reasons Verdant’s energy management thermostats have some of the fastest payback periods in the industry.
Plug & Play Installation
Just as standalone smart thermostats that rely on door switches and lighting sensors to operate require professional installation, networked smart thermostats with extensive networking requirements will also require professional installers. This not only increases installation costs, but can necessitate room closures, resulting in lost revenue.
However, since Verdant’s smart thermostat system requires only one gateway, the installation process is plug-and-play. Indeed, installation takes less than 15 minutes per room, does not require any professional support whatsoever, and can be implemented by existing onsite hotel staff.
Wi-Fi Dependence
Many networked smart thermostats rely on a Zigbee-based protocol. Consequently, the signal (1) can interfere with existing Wi-Fi infrastructure and (2) can have more difficulty penetrating certain building materials, such as concrete.
Alternatively, Verdant’s smart thermostat equipment (including occupancy sensors and wireless control cards) communicate using a proprietary Protocol. This means no interference with the hotel’s Wi-Fi bandwidth and the signal can easily penetrate thick building materials.
Easy and Intuitive Online Interface
One of the core features of any networked smart thermostat system is an online dashboard or interface where hotel managers can control and monitor HVAC performance. When those interfaces are too complex for hotel staff, they tend to ignore it altogether, and hotel operators lose out on potential energy savings. Verdant’s online remote management interface, however, is intuitive and easy-to-use for any property manager, maintenance person, or other staff member.
Ongoing Support Costs
Finally, as hotel managers and their staff continue to use their smart thermostat system of choice, they might require occasional support. And while some commercial smart thermostat providers require a recurring annual service contract to access support resources, Verdant’s technical support team or access to the online remote management web portal is free.
Improving Hotel KPIs
Insofar as smart thermostats reduce costs and improve guest experience, they improve overall hotel performance and hotel KPIs. Indeed, not only are the energy savings so substantial that some hotel operators recoup their investment in as little as 12 months, but the longer-term ROI from installing a smart thermostat system even increases property resale values by improving three hotel Key Performance Indicators (KPIs).
GOPPAR
GOPPAR, or Gross Operating Profit per Available Room, provides insight into the actual performance of a hotel because it factors in not only revenues generated, but also the operational costs incurred to generate those revenues.
GOPPAR is calculated by subtracting operating expenses from gross revenue to calculate Gross Operating Profit, and then dividing that GOP by the total number of rooms available per year. So when a smart thermostat system is installed, a hotel’s GOPPAR improves because operating costs go down.
CPOR
Cost per Occupied Room (or CPOR) measures the average cost per occupied room, and helps hotel managers and hotel operators evaluate whether the operating cost for any given room is reasonable. Consequently, when in-room smart thermostats reduce the energy costs of occupying any room, the hotel’s CPOR improves.
PROFPAR
Profit Per Available Room (PROFPAR) measures hotel profit earnings per each available room. And because it’s calculated using operating profit, it accounts for changes in room revenue and operating expenses. So when operating energy costs per room are reduced by a smart thermostat system, PROFPAR is also improved.
Improved Guest Experience
Of course, smart thermostats don’t just reduce energy costs and improve hotel KPIs. They also improve guest experience. From programmable settings to occupancy sensors and dynamic recovery, they provide a seamlessly comfortable experience regardless of seasonal weather conditions — ensuring that guests get the most out of their stay.
Support Sustainability & ESG Goals
Smart thermostat systems are also helping hotels reduce their carbon footprint, make their business models more sustainable, and even reach ESG goals. Indeed, not only do the smart thermostats themselves reduce energy consumption directly, but they also help hotel managers qualify for advantageous ESG financing products that they can then reinvest in additional sustainable infrastructure to qualify for additional ESG credits.
Small Changes, Smart Changes
Changes can be gradual or sudden, and so can their impact on your business. In the case of smart thermostats, however, that change is not only immediate, but ongoing.
Smart thermostats systems offer hotel operators an opportunity to not only significantly reduce their energy costs, but also supplement their revenue streams. Indeed, smart thermostats are not only changing how hotels operate, but also the expectations of their guests.