A hotel, or any business, can’t operate without power. Heat, light and water are all necessary to effectively function. According to the Urban Land Institute, of all commercial buildings, hotels are among the highest energy and water users per square foot. As a result, reducing hotel energy costs and embracing sustainable energy solutions is crucial.  

Achieving this goal is not without its challenges, as guests consume water and electricity while occupying a guestroom or in meeting spaces. Outside conditions, such as climate and utility rates, are also out of operator’s controls but factor into energy expenses.  

Across the four-year span within our managed hotel portfolio, which consists of around 25,000 rooms, our utility expenses report has shown an escalation from $6.79 per available room (PAR) to $7.58 PAR, an 11.6% increase or an annual rise of 2.8%. As a percentage of revenue, this surged from 2.8% in 2019 to 3.3% in 2022. With utility costs forecasted to increase in the coming years, hotel operators need to take action to reduce this expense.