Energy waste and the opportunity for hotels

For many hotels, energy is the second biggest cost after labour, and in a 24/7 environment, the potential for waste is high. No matter how much you pay for your room, no-one wants to be told to change their behaviour or have low-energy lighting affect their comfort.

Government figures show that big businesses spend £2.8 billion on energy that they don’t have to use every year – the output of nearly five power stations. Hotels are among the top five energy consumers in the tertiary building sector, behind food services, healthcare and some offices.

"Hotels are among the top five energy consumers in the tertiary building sector"

Given that lighting on average represents about 25 per cent of electricity costs in hotels, the financial arguments for implementing a full LED retrofit are compelling. We have seen the benefits in our work with Park Inn, Radisson Blu in the UK, the Hotel Collection and Ralph Trustees, among others. Energy-efficiency projects have saved over £1 million to date.

The business case for LED lighting is widely known. Less widely known is how hotels are owned and managed. A hotel will often have an owner, a large fund or a bank, that wants to improve the way it operates, increase profits and sell it for more than it paid.

A hotel being sold as a going concern is often valued on a multiple of the profit it can generate. These multiples can be 10 times or more.

So for every £100,000 we can add to the bottom line by deploying quality LED lighting there are two impacts: a reduction in energy bills and an increase in the value of the asset of at least 10x – £1 million. A number of our larger hotel customers have seen this opportunity as a quick way to increase their asset valuation.

Lighting is the easiest strand of the hotel energy portfolio to change and manage, but it requires comprehensive and expert planning to ensure lighting quality is maintained or improved with LED. Smart lighting controls that provide effective dimming, allied to optimum use of daylight are an essential adjunct to be considered for any retrofit project.

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