Industry Update
Opinion Article24 May 2016

2016 Hotel and Lodging Survey Details Challenges, Emerging Best Practices in Energy and Water Management

By Jon Moeller, CEO at MACH Energy

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As a 24/7 industry, hotels and motels are one of the largest consumers of energy in commercial real estate. As such, hospitality operators are primed to adopt sustainability initiatives to reduce consumption and cut costs. A recent survey and study by MACH Energy showed that 61% of hotels ran a sustainability program, yet 42% did not know the results of their own programs. Additionally, only 30 percent of hotels have an energy or water management software system in place.

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Intuitively, cost savings go hand-in-hand with reduced consumption, not to mention that sustainability programs are correlated with guest satisfaction and increased revenue. Nevertheless, the priorities for the lodging industry remain unclear when it comes to energy and water management.

To uncover the operational depth and diversity of methods used by hotel teams in running their properties efficiently, MACH surveyed more than 300 hotel operators and management professionals across all major metropolitan areas in the country, targeting

hotels and lodging facilities across a range of categories including: Upscale/Luxury, Full Service, Casino, Historic/Boutique, Select Service, Economy/Extended Stay, and Budget.

According to the survey results, cost reduction is overall the most important goal in implementing hospitality energy and water management programs. In fact, over 70 percent of all respondents listed cost and expense reduction as their most important reason for efficiency efforts. The next most popular reasons were satisfying customer/guest preferences and meeting sustainability standards, accounting for 39 percent and 25 percent of respondents respectively.

Additionally, 56 percent of respondents claimed that the most important element in running hotels efficiently is the operational hotel teams. As behavioral changes have been recently emphasized as a key to successfully reaching energy and water efficiency goals, hotel teams will continue to be the properties' most valuable assets even as technologies are adopted. While effective, operational improvements could also be paired with lower-cost measures in energy management such as energy and water management software to provide actionable analytics for optimizing personnel initiatives and the use of environmental and lighting controls and sensor equipment.

Interestingly, while 92 percent of survey respondents were aware of the square-footage of their common areas such as conference halls, swimming pools and hotel grounds, 32 percent of respondents had no knowledge of energy and water consumption in those areas, and how high those costs could be — a discrepancy that reflects a lack of data-driven energy and water management across the industry.

Of the 63 percent of respondents who affirmed their hotels were running a sustainability program, as many as 42 percent of these respondents did not know how much their sustainability programs were saving in terms of energy cost, or their hotels did not run a sustainability program. 35 percent of those with sustainability programs felt the program generated a savings of 5 percent or less.

When instituting energy and water efficiency measures, hotels need to reduce their utility expenses without sacrificing guest comfort. Paired with operational improvements, simple and cost-effective measures such as energy and water management software could be taken for immediate savings, building on existing systems or as a standalone solution.

The full report 2016 Hotel Industry Survey: Energy and Water Management Best Practices can be downloaded here.

Jon Moeller

Jon is CEO of MACH Energy, where he also heads corporate development. Prior to joining MACH, Jon spent a decade in financial services business development and transactional roles at Banc of America Securities, Cowen and Storage Technology Corporation, completing ~$20B in transactions. Jon earned an MBA in Finance and Information Systems from NYU’s Stern School of Business.

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