Hotel Energy Management:
A Positive Developments for Major Hotel Brands

Modern Hotel Energy Management is driving improved performance in hotels. Since 2014, the number of Hotels using a reservation connected Energy Management System has almost doubled. Find out why.

Hotel Energy Management is not necessarily “Hotel Energy Savings” due to one fact – guest satisfaction. If it were just “Hotel Energy Savings,” in the extreme guest room heat would be set just above pipe freezing levels and air conditioning would be calibrated just enough to prevent humidity-related damage.

Hotel Energy Management is a topic that both excites and confuses those that need to implement it. We’re excited because the term conveys feelings of control and action over a hotel’s energy spend. We’re confused because the term really doesn’t tell us exactly how we’d go about it. That gap between what it could be and a fogginess around “how” is the challenge most operators, ownership groups, and asset managers faced when reviewing the latest hotel energy management proposal that comes across their desks.

Hotel Energy Management: Pareto’s Rule

The meaning behind Pareto’s rule, the “Pareto Principle” or the “80-20 Rule” is based on the Swiss tax collection approach taken by Wilfred Pareto. He concluded that he could collect 80% of the country’s revenue from the wealthiest top 20% of the population.

What that means for hotel energy management is that in a competitive market where the ADR is X and the REVPAR is this, focusing on the 20% of hotel energy management solutions that will drive the greatest bottom line benefit.

Hotel Energy Management: Immediate and Massive ROI

Energy conservation methods in hotels around the world range from savings efforts focused on lighting, water or HVAC Operations. Hotel Energy Management investments directed towards HVAC Operations offer the greatest yield.

99% of the hotels surveyed by AHLA stated that they had made already energy efficient lighting investments. If this offered the same return, the demand for savings and performance management for the other line items on a hotel’s power bill would not be so high.

Hotel Energy Management: “The House Rules”

“Hotel HVAC operations have two distinct sides of the house,” according to one VP of Engineering from a global hotel brand. The physical plant – including boilers and chillers make up the back of the house. Guest room energy management would be considered the front of the house.

While back of the house returns can be significant – so are their initial associated investments and return horizons. When 39-year mechanical systems U.S. tax depreciation rules are added to the equation, ownerships group have become reluctant to narrow their focus in this area. Front of the house investments, however, have begun to gain increasing interest because of its relatively major return-to-investment profile.

Hotel Energy Management: Measurement vs. Action

One might think, after reading through AHLA’s 2016 Lodging Survey that the energy management problem is nearly solved. After all, nearly 50% of hotels with more than 130 rooms report implementing a whole building energy management system.

That is not the case. The problems are there and more pressing than ever. First off the terminology. Even with AHLA. The term “whole building energy management system” appears to be catch-all term for system that provide analytics, reporting, or management systems. Further our research found no differentiation between “front-” or “back of the house” hotel energy management solutions.

In the field we’ve found that many properties are running building energy management systems in name only. Many are more process-based than software based. The ones that are most prevalent are sophisticated excel-based dashboarding and reporting tools developed by consultants or internal staffs.

Regardless, the challenge is this: most organizations and managing hotel energy management through rear-view mirrors. We think there should be a better way.

The Market

AHLA reports that 48% of hotels have some sort of in-room energy management sensor. In most cases we’ve found that the majority are out of date occupancy-based hotel energy management systems. We use the term “out of date” due only to the fact that when it comes to hospitality energy management projects we’ve done as many refurbishments as we’ve done new construction/renovation deployments.

Front of the House: An Expanded Opportunity

WiSuite is 100% focused on Hotel Energy Management because we believe that hotel operations teams and hotel guests needn’t have to compromise. Our international footprint of guest room energy management installation has laid bare the monumental opportunity for operators, ownership groups and asset managers seeking quick 2-3 year returns from “front of the house” Hotel Energy Management investments.

The democratization of technology has done far more than ensure that all of us have supercomputer-class smartphones in our pockets and purses. Developments in this space have also brought about the ability for hotel management teams to deploy networked smart-thermostats across their properties to control guest room climate control.

These are more than just thermostats with occupancy sensors. Hotels are finding that they need far more than that. These “simple fixes” have outlived their useful lives in the upper end of hotels. To some operators they have become a nightmare in the form of adverse guest rating scores. When less-sophisticated sensor-based thermostats can’t determine the difference between an absent and a sleeping guests, complaints arise. By simply googling “hotel thermostat” or searching YouTube for “hotel thermostat override” one can quickly identify the brands that place their clients in this predicament.

Hotel Energy Management: Thoughtful Timing

Instead of occupancy-based energy management, another approach is taking hold,the timed event. In reviewing a hotel’s guest profile by day, week, month, or season it’s easy to determine times at which “economy set-backs” can be executed. An economy set-back is when a thermostat stands down to energy savings mode. Timed events involving economy setbacks occur when a hotel energy management system sends a signal to all or a group of thermostats across a property to move into that state.

Normally this could be from 9:00 am to 3pm in a hotel that serves business, or from 5:00pm to 8pm in a hotel near an active night-life scene. Also if the set-back occurs with a guest in the room, all they need to do is to touch the thermostat and it’ll move back to the guest’s preference temperature. This simple design based upon behavior, with the ability to adjust settings on the fly has been embraced by hotel operations and engineering teams around the world.

Hotel Energy Management: The Reservation Connection

Several years ago, our team began to research the advantages of synchronizing the guest room energy management systems used in hotels with the central reservation systems used in hotels. The thinking was that if one were able to set back energy consumption programmatically at the time of guest-check out and only bring it back to an occupancy-ready climate upon checkup, what would happen?

A savings windfall. Free from guest-occupancy concerns, this connected trigger has made this feature a must have feature on nearly every installation. With the additional feature of a “housekeeping snooze” wherein which housekeeping can adjust the climate in a guest room while they clean it and leave, knowing that the climate adjust is on a 40-minute timer. Hotels no longer need to rely on housekeeping to adjust room climate after checkout or during cleaning.

Back of the House: New Opportunities

The most promising of “back of the house” development in hotel energy management investments have involve the use of BACnet. By applying IOT concepts to a tried-and-true building automation and control protocol, new opportunities are presenting themselves.

Recently, the Hotel Nikko in San Francisco, pursuing Title 24 certification engaged WiSuite and partner SAI to connect WiSuite’s web services platform with SAI’s BACnet connected solution.

This is just one of the scenarios that needed to run in order for this effort to be a success.

• The property is running at or near peak use, bring down the building temp.
• BACNet signal to SAI in the form of an SAI algorithm indicating peak level proximity
• Signal from SAI to WiSuite requesting 1-degree climate drop
• Signal from WiSuite to property wide thermostats 1-degree drop
• Result, When 900 room drop their energy needs in a coordinated fashion, large returns can be realized.

For a relatively modest investment, the Hotel Nikko was able to grow it sustainability
Profile and use hotel energy management to control both the back and front of the house in a coordinated, integration fashion that makes sense and preserves guest comfort.

80-20 Rule: Start with Hotel Energy Management

Circling back to the logic of a centuries-past Swiss tax collector, hotel leadership teams should focus on where they can reap the greatest benefits from their investments. Managing guest room comfort is critical as social-generated ratings drive more and more reservations decisions.

The answer isn’t more sensors, the answer lies in taking a distributed room-by room problem, dropping connected devices into each room and linking them to up-and downstream systems. This simple principle that connections matter. This principle acknowledges that islands of disconnected sensor-based savings schemes will inevitably work at cross purposes to guest satisfaction. This is what WiSuite is doing every day in thousands of rooms across the globe