If you currently pay a utility you probably know that its not the least of your expenses, whether its for your home or your business. Additional prices are only rising which makes this sore topic often heard in the current news. The real question is, what does it cost you? Energy consumption is usually considered an operating expense. Its something you have to live with today and its always variable, often times this creates the wrong attitude for users that it is just another fact of life. Fortunately however energy expense is controllable, in fact, its one of the most abused commodities there is! When the cost of electricity was cheap no one cared much if they wasted a little energy, however now the true cost is biting back at businesses everywhere.

An accountant might wave his finger at us, but we prefer to think of energy reduction and savings as increasing revenue, rather than decreasing expenses. Although as a percentage a reduction in energy usage is more dramatic against your total expenses, we feel that the true incentive of business is to increase revenues. This is especially true in the case in hospitality, where the value of a property is often measured as a multiplier of its REVenue Per Available Room (REVPAR). By decreasing the expense necessary to operate that room you have in fact just increased its REVPAR. For example, one way to look at it is like you have just increased the Rate Fee by $2/night. Multiplied that has a profound impact on the business value. All of this and it pays for itself! Imagine how much extra a property might spend in marketing fees to increase its effective Rate by the same amount. By comparison, an energy management plan is quite effective and inexpensive, especially since it is adding a long-term asset to the balance sheet, something no marketing plan can do! Electricity is the bloodline of an operating hotel or motel; it must be managed with great care like any other controllable expense.

Due to extraneous circumstances, the cost of electricity worldwide has risen drastically in the past few years and will only continue to rise. Everyday around the world guestrooms without energy management systems represent millions of dollars in wasted electricity expense. This phenomenon is based on the simple fact that 60% of the time an occupied room is left unattended along with that room’s HVAC. The Energy Eye™ System allows for the ability to manage wasted electricity costs at your facility leading to lower operating expenses and increased revenue.

Hotel Utility Expenses

On average, 90% of wasted electricity usage comes from the guestroom, which is your property’s most unmanaged resource. Your guestroom’s HVAC system can represent 70% - 90% of that wasted electricity resulting in thousands of dollars in lost revenues.

(chart, right:) Based on US average of 1999 hotel/motel expenses.Source Hotelier Magazine 2000

How much profit are you losing?

American Hotel Lodging Association 2001