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Feb. 29, 2012: Study Says Misconceptions Deter Hoteliers From Investing in Energy Management

February 29, 2012
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PALATINE, Ill. — Investments in energy efficiency initiatives in four- and five-star United States hotels are impacted by concerns from hoteliers about building automation systems around initial costs and the perception that energy management systems will result in a negative guest experience, according to a survey by the University of Nevada, Las Vegas (UNLV) Harrah Hotel College and Cannon Survey Center. The study was commissioned by Schneider Electric.

The independent survey of approximately 100 C-level hotel executives, general managers, and lead facility engineers sought to understand the current level of awareness around energy management opportunities and solutions at four- and five-star hotel properties in the U.S. The findings revealed that while close to half of respondents (48 percent) cite environmental considerations, 62 percent state the initial cost and 59 percent cite payback period as factors in energy management investment, the most critical factor is guest comfort and satisfaction, with 92 percent of respondents citing it as “extremely important.”

While all respondents rated their commitment to sustainable development and the 3Ps (planet, people and profit) highly, the survey reflects that hoteliers consider positive guest experience as the most important consideration for any investment. This sentiment is reflected throughout the survey, with respondents rejecting any system or program that may remotely be perceived as compromising the guest experience. For example, several respondents cited perceptions of certain technologies as diminishing the guest experience, specifically: electrical peak-shaving systems, power factor monitoring systems or any control that has potential to interrupt a guest’s stay. While guest experience reigns as the main priority in choosing specific energy management systems, hoteliers cited future motivations for energy investments as monetary savings (94 percent), hotel image (88 percent), and guest loyalty (74 percent). Benefits realized for future investments also followed the same order of motivations: monetary savings (97 percent), hotel image (83 percent), and guest loyalty (69 percent).

“In many ways, this survey mirrors many of the concerns we hear from our customers in the hospitality industry, since hotel owners and managers are concerned with customer satisfaction above all other considerations,” said Sean O’Kane, director, Hotel Strategic Alliances, Buildings Business, Schneider Electric. “However, the high percentage of respondents indicating monetary savings, hotel image, and guest loyalty as motivators for future investments points to an opportunity for hotels to differentiate themselves with environmentally conscious guests and an imperative for the industry to continue elevating awareness around the environmental and economic benefits related to energy efficiency.”

Another key result of the study found that traditional concerns around high initial cost and payback periods and low return on investment (ROI) were major barriers to adoption of building automation and control systems. A related consequence is that hotels appear to have rejected more robust systems in favor of simpler measures. For example, while almost all of the hotels surveyed have employed automation or control systems including HVAC occupancy sensors (76 percent), lighting control systems for all applications (74 percent), use of variable speed drives on heavy equipment (86 percent), uninterruptible power supply equipment or surge suppressors (85 percent), and data storage management systems (74 percent), hoteliers cited electrical peak load-shaving systems, energy control equipment on kitchen refrigeration units, and power factor monitoring systems as too expensive to install, with little ROI to consider. Lack of knowledge around energy technologies and hesitation to invest in longer-term capital projects were also major barriers to adoption.

“Almost 60 percent of respondents had energy costs between 2 and 5 percent of their total gross revenue,” said Dr. Seyhmus Baloglu, lead investigator for the study and professor and assistant dean for research at the UNLV Harrah Hotel College. “In addition, the properties we surveyed seemed to take a short rather than long-term financial perspective when making investments in energy management systems, which is oftentimes a less sustainable approach to energy management.”

“These findings demonstrate that there is still a huge opportunity for hotels to achieve higher levels of energy savings and comfort for their guests while increasing their bottom line,” said Dr. Thomas Jones, investigator for the study and associate professor at the UNLV Harrah Hotel College. “Hoteliers should understand that energy efficiency doesn’t have to come at the expense of guest comfort.”

For more information, visit www.schneider-electric.com.

Publication date: 02/27/2012

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