Knowledge Is Money

To spend less on energy, know what you use.

By Adam Kirby, Associate Editor -- HOTELS Magazine, 3/1/2007

There are literally dozens of ways hoteliers can significantly reduce energy waste, including installing compact fluorescent lamps, adding rooftop solar panels and purchasing cogeneration units. The methods and technologies run the gamut from expensive undertakings to essentially free programs. But no energysaving initiative can be considered truly effective without an accurate way to quantify usage.

Take Marriott International, for example. Marriott has been actively engaged in energy management for more than a decade, but it wasn't until about five years ago when Pat Maher, Marriott's senior vice president for lodging engineering, hired the company now known as Advantage IQ Inc. to analyze gas, electric and water use at each of its properties that Marriott began to see significant savings. The key was to break down energy usage into more than simply money paid to utility companies.

"We always measured our costs, but we wanted to measure the units. Once we had some initial data for the first couple years, we started benchmarking our different hotels against each other," Maher says. "Once you start benchmarking and understanding where you are, then you can start doing the plans."

As Marriott began assembling benchmarks -- firm accountings of how much energy its most efficient properties used versus its less efficient locations -- engineers then could begin to address the reasons for the differences. The result has been a cost savings of about 2% a year, Maher says. The effort is especially beneficial for properties in deregulated markets, where energy can be bought in bulk at fixed prices.

Last year alone, Marriott reduced its greenhouse gas emissions by 70,000 tons-the equivalent of eliminating 10,000 cars from the streets. The company's efforts have earned it the U.S. Environmental Protection Agency's Energy Star Partner of the Year honors the last two years.

Benchmarking has helped lead Marriott to some relatively simple energy-saving solutions, including changes to its laundry service. Marriott hotels that operated laundry during offpeak hours had noticeably lower electricity costs, as did locations that ran fewer hot-water loads. Off-peak, cold-water laundry now is encouraged whenever possible at all Marriott properties, which has lowered that expense by about 25%, Maher says.

Further, in one extreme case, benchmarking helped one Midwestern Marriott property identify a severe underground water leak, Maher says, saving that hotel thousands of dollars a year. Management had no idea the leak even existed until they began comparing the property's water usage to locations of similar size and realized something was wrong.

Marriott and Accor Economy Lodging, among other brands, use Advantage IQ to do most of their benchmarking. Advantage IQ compiles use data from about 190,000 sites nationwide and has highly detailed cost matrices that can pinpoint just how much an efficient building of any given size, age and location should be paying each month, says Ed Schlect, vice president for corporate development. For hotel companies like Marriott and Accor with a multitude of properties, the information can be used to target their least efficient sites for improvement by imitating the operations practices of their most efficient sites. "The ability to rank your properties is really key," Schlect says. "When we show somebody an outlier, we get two reactions. One is, 'I always thought that location was a problem, but I couldn't prove it.' The other is, 'Now I know where to look.'"

Some property managers at energy-inefficient hotels are taking the idea of benchmarking a step further with sub-metering. Whereas benchmarking crunches utility data from whole properties, sub-metering breaks the energy use down even more -- by hotel department or even by room. The practice has become relatively common in Asia, where about 25% of new hotel construction projects include sub-meter installations, says Robert Allender, a certified energy manager with Hong Kong-based Energy Management Resources. He lauded the Grand Hyatt Shanghai as the gold standard of sub-metering, with its hundreds of on-site systems gathering and analyzing data.

Sub-metering also can be a good option for independent hoteliers and smaller hotel management companies that don't want to pay for benchmarking agencies like Advantage IQ or its primary competitors, Cadence Network Inc. and Save More Resources Inc. A barebones sub-metering program can be initiated for as little as US$1,500, enough for about 10 meters, while a more substantial system can cost about US$30,000 for a medium-sized hotel, Allender says. Either approach can be expected to deliver a 100% return on investment per year for the life of the meters, which is roughly 10 years, he says. Sub-metering can save hotels an additional 5% to 10% on average, according to the Washington, D.C.-based Alliance to Save Energy.

Fairmont Hotels & Resorts employs a combination of energy management tactics at its 50 properties worldwide. Some of them contract with external benchmarking companies while others use sub-meters and plug the various site data into a proprietary Intranet software system called EnergyTrac, says Michelle White, Fairmont environmental affairs manager. EnergyTrac, which is undergoing a modernizing overhaul, allows hotel engineers to compare water and energy usage across various time periods to confirm efficiency improvements are succeeding.

Motivating The Masses
In addition to property efficiency upgrades, energy usage data also can be used as a tool to motivate conservation efforts for hotel staff and guests alike. At Gaia Napa Valley Hotel and Spa in California, monitors in the lobby display real-time readings of the hotel's utility usage and carbon dioxide emissions. The interactive touch-screens serve to educate users on the environmental importance of conservation. The goal, says General Manager James Soule, is to keep everyone at the eco-friendly hotel conscious of their energy consumption on a daily basis, which is good for the environment as well as the hotel's bottom line. "We want people to be aware of living a greener lifestyle," Soule says. "We can all save energy within our own individual lifestyle."

Allender agrees-making energy use data available gives individuals a starting point to challenge themselves to conserve where possible, he says. They become more conscious of simple tasks like turning off lights when leaving a room when the impact, however small, becomes quantifiable. "Once people become accountable for the energy they're consuming, it really changes the way they operate. If people don't know how much energy they're using, they can't change it," Allender says.

The industry trend toward tracking energy use is certainly a positive one, says David Stipanuk, associate professor of hospitality facilities and operations at Cornell University, Ithaca, NewYork. Nevertheless, he remains dumbfounded at the number of hotels, particularly independently managed properties, which still haven't plucked the so-called "low-hanging fruit"-those easy energy management fixes that don't need any real data analysis to be realized, like inefficient lighting sources or heating systems running at a fraction of their capacity.


Hoteliers in North America have been especially slow to adopt even the simplest improvements, Stipanuk says, likely because utility costs tend to be cheaper there-and profit margins higher-than elsewhere around the globe. "It's hard to get people to pay attention in the United States because life is good," he says. "To somebody who wants to talk about energy reductions, they just respond, 'We'll raise the rates, and people will pay it.' There is, somewhat, a challenge there."

At green hotels like Gaia and Greenwood Village, Coloradobased Xanterra Parks & Resorts, the cost savings related to energy conservation is nice, but it's little more than a welcome byproduct of being a good corporate citizen. Xanterra, which operates lodges in 22 U.S. national parks, tracks energy reductions not in terms of money, but rather environmental impact, says Chris Lane, Xanterra's senior director of environmental affairs. Known as ecometrix, Xanterra uses utility and hauling bills to tally hazardous waste, resource consumption, greenhouse gas emissions and other environmental measures, and divides the totals by room occupancy rates. In this way, Xanterra can compare its annual per-guest environmental impact on an apples-to-apples basis, regardless of changes in energy costs or visitor numbers.

Ecometrix is a critical component to Xanterra's business philosophy, Lane says, and he believes that other companies wanting to be taken seriously as being green need to have a similar system in place. "You can say all the green things you're doing in the world," he says, "but if you're not actually reducing your impact, what does it matter?"