How Rising Energy Costs Are Impacting the Hotel Industry: What You Need to Know
How Rising Energy Costs Are Impacting the Hotel Industry: What You Need to Know
Over the last five years, energy costs for UK hotels have significantly increased due to several factors, including rising wholesale energy prices, regulatory changes, and increased demand for energy.
The volatility in the energy market has made it challenging for hotels to predict and manage their operational costs effectively.
This article explores how rising energy costs are reshaping the hotel sector and aims to provide you with helpful energy-saving advice.
“The recent recovery in the UK hotel market has been outperforming all expectations, but the energy cost crisis, and subsequent squeeze on consumer disposable incomes, is perhaps the biggest challenge the sector will face following the pandemic.” Savilles
On average, hotels in the United Kingdom consume between 10,000 and 15,000 kWh of electricity per room per year. This includes electricity used for lighting, heating, and other essential operations.
Heating, ventilation, and air conditioning (HVAC) systems are often the biggest energy consumers in hotels, sometimes accounting for half of a hotel’s total energy use. On average, each square meter of a hotel room uses around 0.55 kWh each day, depending on various factors like the hotel’s size, the system’s efficiency, and the building’s insulation quality.
Like in our homes, business energy usage will go up or down depending on the time of year. However, with high energy consumption and soaring energy costs, it is essential to look for ways to optimise energy usage and boost overall efficiency.
Challenges facing the hotel sector
“Energy costs for the UK hotels sector has doubled in four years” RSM Hotels tracker.
From increased operational expenses to changes in guest experiences, the repercussions are multifaceted:
- Higher utility bills lead to tighter budgets
- Pressure to adopt energy-efficient technologies
- Potential increases in room rates
- Enhanced focus on sustainability measures
- In regions with outdated or less reliable energy infrastructure, hotels may encounter higher costs due to inefficiencies and the need for backup power solutions, leading to increased operational expenses and potential service disruptions.
The rapid increase in energy costs presents a significant challenge for the hotel industry, requiring innovative strategies to manage expenses effectively.
Top tips for reducing energy costs
Adopting energy-saving measures throughout your operation can help reduce energy consumption; here are our top tips.
- Using less energy during peak periods can lead to lower operational costs
- Implementing energy-efficient water heating systems
- Encourage guests to conserve water
- Train staff in energy management
- Turn off or down equipment when it’s not in use
- Regularly defrost and clean fridges
- Check and replace door seals on cold rooms, fridges, and frozen food stores.
Energy management strategies
Implementing an Energy Management System (EMS)* will help you to monitor and control your energy usage in real time, helping reduce consumption during peak periods and allocate your resources more efficiently. The initial investment in EMS can be substantial, but the long-term savings and operational efficiencies make it worthwhile.
Advancements in energy-saving technology
Innovative technological advancements in energy savings create new avenues for hotels to embrace sustainability without compromising guest comfort. Such innovations include smart thermostats, keycards, and LED lighting, which are integral to modern hotel operations.
Optimise HVAC systems
HVAC stands for heating, ventilation, and air conditioning – the systems that work together to keep your hotel a comfortable temperature and improve air quality. There are several emerging HVAC innovations and trends to look out for including:
- Smart thermostats
- IoT integration
- Predictive maintenance
- Geothermal heating and cooling
- Eco-friendly refrigerants
- Zoning technology
- Variable refrigerant flow systems
Effective HVAC systems can adjust their output based on demand, using less energy compared to fixed-speed systems that run at a constant rate.
Voltage optimisation
The average voltage in the UK is 242 volts, which is higher than the 220 volts that electrical equipment typically operates at. This higher voltage can lead to increased energy consumption and higher electricity bills.
Voltage optimisation is a transformer-based technology that supplies a voltage level that is more suitable for the electrical device to perform its task more efficiently. By adjusting and controlling voltage levels on a user’s site, voltage optimisation can help reduce energy consumption by up to 20%. In addition, Voltage optimisation can prevent damage and extend the life of electrical equipment.
Voltage optimisation solutions also qualify for 100% tax relief so instalment costs can be offset against corporation tax.
Renewable energy & sustainability
There’s a noticeable shift towards renewable energy sources, driven by guests’ increasing preference for eco-friendly accommodations and the necessity to keep operational costs in check. This emphasis on sustainability is reshaping how hotels approach their energy management policies. However, Hotels committed to sustainability may face higher costs due to reliance on non-renewable energy sources.
Some hotels can reduce their carbon footprint and shield themselves from the volatile fossil fuel market by incorporating solar, wind, or geothermal energy. This alignment with renewable energy doesn’t just cut costs; it also appeals to the growing segment of eco-conscious travellers.
Conclusion
Working with an expert will help you navigate the challenges of rising energy costs. They can offer tailored energy solutions and strategies, ensuring your hotel remains competitive and eco-friendly.
*EnPact a complete end-to-end decarbonisation solution
Emissis and Univers have launched a groundbreaking, solution that combines the Univers energy management system with Emissis innovative energy-saving devices providing clients with a complete end-to-end solution.
enPact guarantees significant, evidenced-based energy savings of +20%, making it ideal for sectors with high energy consumption.
Download our brochure here or contact one of our experts to arrange a desktop proposal.
