Over the past decade, hospitality technology has undergone a significant transformation, particularly in revenue management. Manual pricing has been replaced by automated systems that optimise revenue in real-time.
This evolution has decisively improved hotel profitability. Revenue management methods such as dynamic pricing and booking channel optimisation have become the cornerstones of profitability. But what about the cost side?
Whilst we typically monitor and optimise revenue meticulously, operational costs often take a back seat. For many establishments, this represents a larger expense than marketing or certain categories of staff benefits. However, this challenge also presents a tremendous opportunity: significant savings potential on these expenditures.
Hotel energy management is an effective way to reduce costs without compromising on service quality.
Why is hotel energy management so important today?
Hotel energy management is now more than simple cost reduction, though this remains its primary benefit. Energy-efficient operations offer numerous interconnected perks that extend far beyond reduced electricity bills. Together, these can strengthen both the hotel's success and long-term sustainability.
Hotel energy management delivers multiple advantages, here are the key benefits:
1. Significant savings can be achieved
Energy costs represent approximately 14-25% of an average hotel's operating expenses. With proper management, however, you can reduce these costs significantly over the long term.
Even a 20-30% reduction can result in substantial amounts as savings accumulate. Every small improvement contributes to the bigger picture, bringing increasing benefits year on year.
The simplest yet very effective step is switching to LED lighting, which can reduce lighting costs by up to 80%. By implementing smart thermostats in rooms and common areas, you can save on heating and cooling costs without compromising guest comfort.
Additionally, more efficient energy use reduces carbon dioxide emissions, which is an increasingly important consideration in sustainability-focused markets.
2. Guests value sustainability
Conscious travel is becoming more and more prominent in global tourism. Booking.com's 2024 Sustainable Travel Report found that 75% of global travellers want to travel more sustainably, with 57% intending to reduce energy consumption on future trips.
Green initiatives and certifications, such as eco-ratings, are no longer mere marketing gimmicks but integral parts of a property's value proposition. Environmentally conscious guests typically return, give more enthusiastic reviews, and are happy to recommend their favourite accommodations to friends and family.
Energy-efficient systems also provide better guest encounters through more accurate climate control, natural LED lighting, and quieter modern equipment.
Guests appreciate it when a hotel is environmentally friendly while still providing consistent comfort. Such positive experiences can create stronger connections and increase guest loyalty.
3. Operational efficiency improves
Implementing energy-efficient systems not only optimises costs but can also streamline internal operational processes. Automated systems, such as intelligent lighting or HVAC controls, reduce the need for manual adjustments. The freed-up staff resources can thus be directed towards guest service, significantly improving the overall productivity.
Predictive maintenance is particularly valuable. The system anticipates potential failures, allowing the maintenance team to intervene proactively. This prevents more serious operational disruptions, which is invaluable during busy periods. Nothing is more unpleasant for a hotelier than air conditioning failing during the peak summer season. Proactive maintenance avoids these situations whilst extending equipment lifespan.
A property equipped with modern technology creates an attractive workplace where employees can take pride in working for an environmentally conscious, innovative company. Streamlined processes mean less stress and greater staff satisfaction. When systems operate reliably with fewer unexpected problems, the entire team can work more calmly. This can improve workplace culture and reduce turnover, representing additional savings on recruitment and training costs.
4. It can provide a competitive advantage
Lower operating costs enable establishments to offer more flexible pricing and competitive deals in the market. An energy-efficient property can afford to offer more competitive prices or realise higher profits at the same pricing levels.
Meanwhile, environmentally conscious operations build a positive image and contribute to brand value. This type of positioning can be even more valuable in the long term, as many guests prefer brands whose values align with their own.
Energy management has serious marketing value: green certifications and environmentally conscious practices enable premium positioning in pricing. This can be realised through higher average rates and increased profits.
5. It provides quick returns and long-term benefits
Return on investment is a crucial consideration in every business decision. Most energy efficiency investments pay for themselves surprisingly quickly.
LED lighting pays back within 1-2 years, smart thermostats within 2-3 years, and more complex HVAC developments within approximately 3-5 years. After this, the savings represent pure profit for the hotel.
What's particularly attractive is that these savings become even more significant in the long term. Whilst a one-off marketing campaign's effect fades, energy efficiency investments generate savings for years.
6. Effective decision support
Energy-efficient systems provide rich data about everyday operations. This data isn't just needed for optimising energy consumption, but also supports better business decisions generally.
You can see, for example, which periods have the highest demand, how capacity utilisation develops, or what trends can be observed.
Data-driven operations enable more accurate forecasting, resulting in better resource planning. Staff scheduling, inventory ordering, and even hotel maintenance activities can become more efficient.
The main challenges of hotel energy management
Despite energy management offering numerous benefits, its implementation in the hospitality industry is not without challenges. The sector's unique characteristics present specific obstacles. However, with effective strategies and proper oversight, these obstacles can be successfully overcome.
Hotels never sleep
Hotels operate in a 24/7 mode. This means reception, security systems, guest areas, and critical systems require a continuous energy supply. There's no period when systems can be completely shut down for an optimisation.
The situation is further complicated by fluctuating guest occupancy. For seasonal properties, summer occupancy can reach 90%, whilst winter may see only 30%. Additionally, weekdays bring business guests and weekends attract leisure travellers with different needs.
An unexpected group cancellation or several last-minute bookings can disrupt energy consumption plans, requiring significant system flexibility.
Every space has different requirements
Hotels are extremely complex in terms of their energy usage. Guest rooms require individual climate control, whilst kitchens or spa areas have specific temperature and humidity requirements.
These different needs are often met by centralised systems, which demand compromises. If the lobby is too cold, the entire ground floor must be heated. If the restaurant has a comfortable temperature, the adjacent bar might become too warm.
Without zone-by-zone control, energy costs can quickly escalate.
Technological legacy and investment dilemmas
Many properties operate with decades-old systems. Outdated HVAC and lighting systems consume wastefully and require frequent maintenance.
However, modernisation presents serious challenges. Energy efficiency investments often require significant initial capital - a complete conversion or intelligent control system can involve amounts that smaller operators find difficult to manage. The situation is further complicated because properties cannot cease operations during renovation.
Calculating returns isn't always straightforward either, as there are many variables, making it difficult to predict savings accurately. Large-scale projects involve longer payback periods, which can create additional financing challenges.
The lack of system integration creates additional problems. Heating, lighting, security, and other systems often operate independently, unable to communicate with one another. This can result in lights burning in empty conference rooms at night, or air conditioning cooling a room whilst heating is also running.
The complexity of the human factor
Hospitality staff are diverse, working multiple shifts with different areas of responsibility. Housekeeping, maintenance, and restaurant staff each have their own perspectives, yet it's often unclear who is responsible for energy efficiency and how.
Guest communication can also be a sensitive area. For instance, it can be difficult to convince them to switch off lights when leaving or not to open windows whilst air conditioning is running. Some feel they're paying for comfort and resist green initiatives.
Lack of data & forecasting difficulties
Many properties lack detailed measurements of energy consumption. They don't know how much energy different areas consume, so they can't see where the biggest waste occurs. The absence of historical data makes it difficult to recognise trends or develop effective optimisation strategies.
Data analysis can bring other benefits to hoteliers, for example, facilitating general operations and improving revenue management.
Hotel energy management best practices
Implementing the following approaches can achieve significant energy savings. An integrated approach - combining technological solutions with human factors - can deliver even more effective results.
1. Transitioning to renewable energy sources
Solar panel system costs have decreased significantly over the past decade, whilst their efficiency continues to improve.
An average hotel roof can accommodate a solar panel system large enough to cover a significant portion of daytime energy needs. With battery storage systems, energy generated during the day can also be used at night, providing an even more consistent energy supply.
Geothermal energy can be a good choice if your venue has a spa. The Earth's constant temperature provides an excellent foundation for efficient heating and cooling systems. Heat pump systems produce several times more thermal energy than the electrical energy they consume, making this solution extremely efficient.
For smaller operators, hybrid solutions might be optimal. For example, combining solar panels with small wind energy can create a renewable energy supply. It provides significant independence from traditional energy suppliers.
2. Using energy-efficient lighting
Lighting optimisation offers one of the quickest returns in energy efficiency. LED technology is now so advanced that it surpasses traditional solutions in light quality as well. Conscious application of colour temperature makes a difference to guest experience as well.
Dimmability, i.e. gradual light intensity control, enables additional energy savings. By incorporating motion and presence sensors in corridors, stairwells, and common areas, lighting only operates when actually needed.
3. Data analytics for energy insights
Hotel energy management is based on accurate, real-time data collection and analysis. You can identify which areas consume the most energy.
Room-level measurement provides an even more detailed picture, enabling guest habit analysis and precise identification of optimisation points.
Predictive analysis is a particularly valuable capability. Machine learning algorithms learn the hotel's energy consumption patterns and can accurately predict tomorrow's needs based on occupancy data. This enables proactive energy management, where the system pre-sets appropriate parameters according to expected guest traffic.
Anomaly detection automatically signals unusual consumption, which often indicates technical faults or efficiency problems. A sudden increase in consumption might signal, for example, a leaking air conditioning unit or a malfunctioning heating element.
4. Smart energy management systems
Intelligent energy management systems are the establishment's brain, coordinating all energy consumption. They provide automatic climate and lighting control that adapts in real time to guest traffic and external conditions.
Automatic control is particularly effective in rooms. The system detects when guests leave and automatically adjusts the temperature to optimal levels whilst switching off unnecessary lighting. Upon return, it pre-heats or cools the room to comfortable levels.
Individual room controls can be combined with other hotel sustainability practices for even more optimal energy use. The Hotel Hermitage Monte Carlo, for example, has implemented automated lighting, energy-efficient elevators, and LED lighting throughout the property. Additionally, their smart greywater treatment system enables the hotel to reuse 60% of wastewater for irrigation and toilet flushing, significantly reducing water waste.
5. Guest involvement
Active guest involvement in energy efficiency efforts can contribute to long-term success. For instance, placing reminders in rooms can help guests consciously switch off devices when leaving.
Through a modern application, like the SabeeApp's GuestAdvisor, you can provide additional information about your green practices.
Discounts and loyalty programs can provide concrete incentives for environmentally conscious behaviour. This might be discounts on the next booking, complimentary services, or gifts.
Building community responsibility creates long-term connections. When guests feel they're part of a larger purpose - in this case, environmental protection - they likely gladly contribute to sustainable operations.
Conclusion
It's worth starting to engage with energy efficiency. Technologies have matured, prices are accessible, and guests are receptive to environmentally conscious solutions.
Creating an energy-saving hotel system is ultimately an investment that benefits all stakeholders. The hotel's operating costs decrease, guests receive better service, and staff work in a more efficient environment. This triple-win situation makes hotel energy management one of today's most attractive development directions.
Important foundations for energy-efficient operations are reliable data and well-organised processes. However, before investing in specialised energy management systems, ensure your hotel's operational systems are in order.
The SabeeApp Property Management Software not only simplifies daily operations. It also creates the data foundation upon which future energy efficiency developments can build. With Smart Solutions, your staff can continuously focus on guest service whilst daily processes run automatically and smoothly.
Curious how this would work for your property? Sign up for a free demo and discover how SabeeApp can support your energy-efficient operations.