In the hotel industry, energy consumption extends far beyond just keeping the lights on. It’s not only at the heart of every amenity and guest service that a hotel has to offer, it also impacts a range of hotel KPIs — from GOPPAR to RevPar to CPOR, and more. Indeed, all hotel energy costs are operational costs, and so any reduction in a hotel’s overhead energy costs not only improves hotel profitability, but increases the value of that hotel.
All this begs the question: what can hotel managers do to reduce their energy costs?
Well, the answer is quite a bit. And reaping the cost benefits of hotel energy management is as simple and straightforward as checking items off of your hotel management to-do list.
Average Energy Use Of Hotels In The United States
Energy consumption represents a significant cost center for hotels, impacting their bottom line and overall operational efficiency. In fact, as Forbes reports, “60-70% of [a hotel’s] utility costs are exclusively billed for electricity”. And according to Energy Star, America’s 47,000 hotels spent $2,196 on average per available room each year on energy, with the hospitality industry worldwide spending $3.7 billion annually on energy. Fortunately, there are a number of energy management best practices hotel managers employ to reduce their energy costs and improve profitability.
Energy Management Checklist: Best Practices for Hotels in 2024
From energy management technologies to operational strategies, there are a number of ways that hotel managers can reduce their energy consumption. And while some require infrastructure upgrades, and evolving guest expectations, hotel managers face a variety of challenges. And in meeting these challenges, new energy management best practices have arisen, enhancing profitability without compromising guest comfort.
1. Smart HVAC Energy Management Systems
One of the most direct ways in which hotel operators can optimize their energy consumption is through smart HVAC energy management systems. After all, climate control is an essential component of guest experience.
Essentially, smart HVAC energy management systems ensure that any space is neither overcooled or overheated when no one is occupying it, reducing HVAC runtime by up to 40%. The energy cost savings from Verdant is so significant, in fact, that they have the lowest payback (or breakeven) period of energy management upgrades, with some hotel operators having recouped their investment in as little as 12 months.
2. Occupancy Sensors
Occupancy sensors allow hotel managers to respond to real-time fluctuations around actual occupancy patterns. Indeed, Verdant’s occupancy sensors (i.e. VX and ZX occupancy sensors) integrate seamlessly with our smart thermostats, but can also be used with many third-party lighting systems, reducing energy consumption on multiple fronts.
Essentially, these occupancy sensors collect a wide range of data (i.e. peak demand loads, historical thermodynamics, local weather conditions, etc.) This data is then analyzed before being used to continuously optimize energy efficiency based on real-time changes in guest occupancy patterns in your hotel.
3. Smart Thermostats
Smart climate control in hotels goes well beyond smart HVAC energy management systems. Specifically, smart thermostats allow hotel managers to pre-program temperature settings around peak usage periods and real time fluctuations in occupancy. For instance, if a common area is typically unoccupied at a certain time, hotel operators can program these smart thermostats to reduce energy consumption during those hours. Similarly, Verdant’s smart thermostats can be programmed to align with high-traffic occupancy patterns, delivering the optimal temperature at all times.
Of course, not all smart thermostats are created equally. Particularly, while consumer-grade smart thermostats are ideal for single family units, larger commercial properties such as hotels, require commercial-grade smart thermostats that can simultaneously manage multiple areas.
4. Air Source Heat Pumps
Another HVAC hardware upgrade hotel managers can invest in to maximize energy savings is Air Source Heat Pumps (ASHPs). Air source heat pumps notably reduce HVAC costs by transferring cold or warm air from outside to the interior, supplementing a hotel’s energy consumption from the grid. These ultimately reduce HVAC runtimes, and reduce overall energy consumption.
ASHPs can also be employed as energy efficient space heaters (or coolers) to help manage energy consumption in areas of a hotel that are thermodynamically problematic. For example, common areas that are poorly insulated, or high-traffic areas.
5. Smart Energy-Efficient Lighting
When it comes to hotel management, ‘keeping the lights on’ isn’t just a metaphor. And similar to how smart HVAC systems leverage occupancy sensors to respond to real-time occupancy patterns, smart lighting allows hotel operators to reduce energy costs without compromising on guest experience.
Moreover, smart lighting solutions provide guests with a seamless and more comfortable experience, ensuring optimal lighting in both private units and common areas. And many smart lights systems are not only easy (and cost-effective) to install, but can integrate effortlessly with the Verdant energy management system — allowing hotel managers to optimize their lighting energy consumption alongside their HVAC energy usage.
6. Energy-Efficient Appliances and Equipment
A significant source of energy costs in hotels stems from what’s called “vampire power draw”, also known as standby power. Essentially, standby power refers to the way “electric power is consumed by electronic appliances and equipment when they are switched off, but are still plugged in and on standby mode.
Energy-efficient appliances, however, feature automatic shutdown pockets, which can reduce energy consumption. These sockets serve as smart power outlets that use either timers or infrared sensors to cut power to connected devices when the device itself is not in use, or the space is unoccupied.
7. Reduce + Prevent Water Waste
Water represents an essential resource to the overall operation of any hotel, from food and beverage service to guest room amenities, pools, laundry, and sanitation. According to the EPA, in fact, hotel water usage accounts for 15% of all US commercial and institutional water use.
It is no surprise that hotel managers rely on smart technologies to conserve water, curbing heat and water pumping costs. McGraw-Hill construction estimates that with smart water energy management systems installed, water consumption can be reduced by 15%, energy use by 10%, and overall operating costs by 11%. Put simply, smart water management systems allow hotel operators to not only reduce their carbon footprint, but also offer significant operational cost-savings.
8. Predictive Maintenance
An ounce of prevention is often worth a pound of cure, and this is as true in hotel management as it is in so many other industries. Specifically, Predictive Maintenance allows hotel staff to leverage sensor data to identify issues before they escalate into much more costly catastrophic system failures. Indeed, Essentially, Predictive Maintenance gives hotel staff the ability to (1) anticipate maintenance requirements, (2) prevent system failures and downtime, and finally, (3) reduce the costs of running a faulty system.
9. Renewable Energy Sources
Another way that hotel managers can reduce their energy costs is by drawing less energy from the grid in the first place by installing solar panels. Excess solar energy production can also be sold back to the mainstream grid, allowing hotel managers to further reduce energy costs.
Typically, solar system installations can range between $10,200 and $15,200 after tax credits, and have a payback/breakeven period of approximately payback/breakeven period of approximately 6.4 to 9.5 years, depending on specifications of that solar energy system.
10. Set Goals, Track and Reward Improvements
Energy management systems provide hotel operators with a wide range of performance data (i.e. peak demand loads, occupancy patterns, etc.), and can help guide them in their energy optimization strategies, and help them set goals, track progress, and reach their ESG targets.
Today, ESG is one of the fastest growing trends in hotel management. Put simply, ESG refers to adopting business practices that focus on environmental sustainability, social inclusion, and ethical governance.
Whether that means installing a Smart HVAC system with smart thermostats or adopting renewable energy sources, achieving ESG targets doesn’t only reduce energy costs, but also bolsters hotel revenue by providing access to more strategic financing and tax credits.
11. Educate Hotel Staff and Guests
Of course, the very essence of hotel management is centered around the guest. Consequently, many hotels have started to offer a more sustainable guest experience by not only reducing the waste of their guests, but also educating modern travelers (particularly millennials) who are more environmentally conscious.
Whether that means reducing towel and linen use to implementing eco room keys or going paperless, a little education can go a long way. After all, hotel guests will be responsible for the bulk of energy consumption in any given hotel.
How Verdant can make your hotel more energy efficient
Verdant leverages smart technology (i.e. smart thermostats, occupancy sensors, and smart HVAC energy management systems) and machine learning to create a symphony of energy cost-savings.
And like with any investment, how long will it take to recoup this initial spend? Fortunately, Verdant’s energy management smart thermostats have some of the fastest payback periods in the industry, typically between 12 and 18 months.
Hotel Energy Management: A Checklist for Success
Much like other commercial properties (e.g. senior living and student housing facilities), hotels offer a range of value-added services that impact their energy costs. As hotel managers work to reduce those energy costs, however, it’s important that guest experience isn’t compromised in the process.
Fortunately, a number of energy management strategies and best practices can help hotel operators not only reduce energy consumption, but even generate new revenue streams. From smart HVAC energy management systems and smart thermostats to predictive maintenance, and smart water management, hotel managers can reduce operating costs, improve guest satisfaction, and reach their financial goals.