At the end of the day, the most important focus for a hotel manager and/or owner is overall ROI and profitability. A profitable hotel is not only a secure investment at the time, but it also means the hotel is more valuable and desirable at the time of resale. There are many ways to increase your ROI, which can be discussed in full length, but a great way to do this is by reducing your energy costs. Simply put, reducing your energy costs will increase your profits, lower your expenses, and can significantly impact your CAP rate.
"As technology becomes more prevalent and cost-effective, we can, for as little as $90 employ a complete guest room stand-alone energy management system which will literally save between 25-35% of the wasted HVAC energy," says Belson of his company's Energex management system. It takes 30 to 40 minutes to install their system in a typical guest room, up to an hour for suites. Installing an occupancy-based energy management system should be a top priority when approaching energy management, says Belson. It could be as simple as adding an occupancy sensor and a controller.
For hoteliers looking for the latest trends, Jeremy Baker, a lighting specialist at Lightology, recommends Edge Lighting'sLED Soft Strip, a strip of 1 watt or 3 watts per foot LED lighting application with a 40,000 hour lifespan. Switching to products that use less energy may make your business eligible for incentives or rebates. In Ontario, Canada, for example, hoteliers can contactsaveOnEnergy through their business stream to see what incentives they can received, which is based on the amount of energy saved. In the United States, tax incentives are available through the U.S. Department of Energy.
Quick Energy Saving Tips:
- Make sure leaks are sealed and insulation is up-to -date.
- Explore opportunities to use motion sensor applications in the parking garage, stairwells, vacant rooms, or anywhere there is not consistent traffic.
- Gain more control of the heating and cooling of guest rooms, these account for 75 percent of the total energy used in a room. Nearly 50 percent of a hotel's overall energy budget would benefit from HVAC (heating, ventilation, and air conditioning) controls such as an occupancy sensors, says Rami Belson, CEO of Energex Inc, Maximize the use of occupancy sensors and controls; they should be placed in meeting spaces, laundry rooms or any room with inconsistent comings and goings of people.·
- Look for low wattage products because they use less electricity, whereas low voltage products are good for covering long distances but do not save on electricity. Two energy efficient options for lighting are fluorescent and LED lighting. "[LED] bulbs are designed to last 30,000 to 50,000 hours. So if they were on eight hours a day that would be 10 or 11 years that you are not replacing LEDs and they don't burn out," says Jeremy Baker, a lighting specialist at Lightology.· Educate the staff, personnel, and guests on how much energy is used when a shower is taken, when a TV is left on or when lights are left on. Perhaps make up a sign in each room to remind guests and staff to turn the lights off before leaving the hotel room.
- Cluster room bookings so energy can be concentrated in certain areas
- Install low-flow shower heads
- Keep pools and hot tubs covered to preserve heat.
"It's difficult to reduce staff costs and you can't do anything with taxes but you have all sorts of opportunities to reduce energy consumption," says Andrew Pride, VP of Conservation at Ontario Power Authority.
Focusing on ways to easily reduce your long term energy expenses will save you money and increase the profitability of your hotel. Investing a few thousand dollars today can save you hundreds of thousands of dollars….doesn’t that sound like a good investment?
Hospitality Designs
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Who says New Years Resolutions are only for individuals? You can start resolutions for your hotel that will translate to greater success. Here are some resolutions we have gathered from experts in the field to get your own ideas going.
1) Increase occupancy and rates.
While Canada and the US have seen occupancy rates increase this year, increasing occupancy should continue to be a goal. This can be done by "increasing marketing and sales efforts," says Joe McInerney, President/CEO of American Hotel & Lodging Association (AHLA).
Part of this effort to increase occupancy and rates should include developing business and marketing plans, says McInerney. He suggests hiring an additional salesperson or a marketing manager and indicate which distribution channels to increase or decrease. AHLA indicated the top three methods of online distribution are search, social media and mobile.
Hoteliers should aim to increase their rating on travel sites such as Expedia and TripAdvisor and reputable rating systems such as Forbes and AAA. There are two aspects to focus on to improve ratings: mass social media presence and customer service. An article on Milestone Internet Marketing Inc., suggests "adding links to read and write reviews for Google, Tripadvisor and Yelp to encourage guests to leave reviews on these channels."
Forbes and AAA clearly indicate how their ratings are performed. For example, for Forbes there is a facility inspection and a service evaluation, both of which are unscheduled visits by their trained facility inspector. For AAA there is an application process and a list of requirements clearly indicated in their guidelines such as having the correct items in a guest room, required signage in the hotel, and be thoroughly cleaned facility.
2) Increase customer service
Increasing your use of Facebook, Twitter, LinkedIn can expose your hotel brand to more potential guests and reinforce your relationship with previous customers.
"In today's agencies or any size of hotel you need somebody to specialize in social media,"says McInerney. Use social media tools to inform your customers about promotions, advertisements or provide updates on the hotel. Identifying and recognizing loyal and repeat customers is important and can develop stronger bonds with your guests. Some hotels use a Guest Recognition and Reward Program which, according to ICLP marketing agency, is a way to "stimulate guest loyalty." Try setting up a point system so customers can earn points for free night stays, meal vouchers or free parking.
Show your guests you appreciate their business by also including extra details such as leaving fruit or chocolate in their room or providing extra customer services for these guests to make it easier to book a room at your hotel.
Another way to improve customer service is to increase service protocols by increasing training, says McInerney. All employees of the hotel should know the importance and the value of every customer and should provide them with the best experience possible, every single time.
3) Focus on your employees: increase recruitment, orientation, and training programs
It can be difficult to find good employees in the hotel industry so start at the beginning. Improve your current existing recruitment program. Start in colleges and universities, says Tony Elenis, President and CEO of the Ontario Restaurant, Hotel & Motel Association.
Recruit employees who have good team work skills, adds Elenis. "If they don't have teamwork in place no matter what you do there's going to be conflict."
Create an orientation program so new staff is prepared immediately and implement a training program to reinforce and add more skills to the workforce. The American Hotel & Lodging Educational Institute offers numerous programs such as certification programs, guest service, housekeeping and front office training.
At the end of the day the business is about customer satisfaction. This includes training any worker that will have contact with guests such as housekeeping and kitchen staff, says McInerney.
Let these resolutions be the start of a long-term business plan. "Managing hotels has become more sophisticated in the last five years and you need to have a plan and you need to know where you're going," says McInerney. "And if you're not measuring what you're doing then you will never get anything done."
Hospitality Designs
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Hoteliers in the United States saw their hotel occupancy rise this past summer and saw a noticeable increase in corporate travelers.
According to STR and Global data, the Americas region showed hotel occupancy at 70 percent in July, a 0.5 percent increase from 2011 and 67.8 percent in August, a 2.8 percent increase from 2011.
Keyur Naik, vice president of Hawkeye Hotels, says the increased occupancy has a lot to do with business traveling.
“I think overall the business travel has picked up and you know in 2009 and 2010 where it was a little rough it looks like things are improving,” he says. Naik adds that in addition to seeing an increase in occupancy from business travelers, he has also seen a slight increase from foreign travelers.
“The dollar has become cheaper so it’s better for people from outside to come in and spend here,” he explains.
Wendy Woodbury, hospitality manager of Woodbury Corporation, has seen a similar increase in corporate travel.
“We’ve started to see throughout the later summer months more corporate travel increasing as far as training goes,” she says.
Corporate travel during the recession years decreased in group size and frequency of travel and have now picked up, Woodbury adds.
Although occupancy has increased, hoteliers say that the rise hasn’t exceeded occupancy rates that they experienced before the recession years during 2009-11. However, Woodbury says that their brand of hotels have taken advantage of the quieter occupancy times to make improvements to their hotels and their brand.
“Luckily we were able to use some of the slower areas of time to renovate and do a lot of brand initiatives and implement them during that lull,” Woodbury says. Upgrades and improvements include a new lobby concept, a new fitness room regime and a new food and beverage concept.
“We were able to implement those and then kind of wow those guests when they started to come back this second and third quarter,” she adds.
Hotel executives are hopeful that the increased occupancy they experienced in the summer months of 2012 will sustain through to the next quarter and 2013. They also expect Average Daily Rates to increase.
“We’re hitting demand levels now that are equal to 2008 which was kind of the pinnacle, kind of the peak of demand for hospitality. I wouldn’t expect demand to continue to increase, obviously some rate increase over the next year or two years but probably not much more,” says Graydon Pearson, president of Pearson Hospitality Group.
Naik thinks the occupancy trend is positive, however, the election outcome will be a deciding factor for many businesses.
“Businesses are currently making capital but they are afraid of making a bold move because they want to see the political outcome of the budget,” he says.
Naik believes once businesses know what direction and policies the government has in store, they will be more confident in investing which may lead to more corporate travel.
Hospitality Designs
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The entire eastern seaboard is faced major damage in the aftermath of Hurricane Sandy. Following the tragedy, food trucks and clean-up crews were assembled to help those who were affected by the hurricane. Numerous hotels lost power and had to find temporary lodgings for the customers. While not all disasters are as intense as Hurricane Sandy, the hospitality industry should be prepared for such situations.
The American Hotel & Lodging Association has a list of recommendations to prepare for emergencies such as creating an evacuation plan for hotel managers, employees and guests, creating an emergency supply kit of food and water, and having a set of failsafe keys with backups.
"Review the procedures you have for crisis management" says Joe Mclnerney, President/CEO of AH&LA. Hold relevant safety drills a couple of times a year, if your hotel is at risk to disasters, so that when an emergency does occur your staff isn't reading the manual.
Creating an emergency team is important. It should include a point person such as the head of security or chief engineer and the housekeeper, restaurant manager, and the telephone operator. The safety of your staff and guests should always be the top priority, says McInerney.
McInerney adds that you should take advantage of all your local, regional, and state agencies such as the fire department, insurance company, the Red Cross and Homeland Security to request help developing crisis management and disaster relief plans.
More things that hoteliers can do in advance are:
- establish a method of communication for employees
- stock up on glow sticks, flashlights, sandbags and plywood
- connect with aid organizations and establish agreements with them in advance
- risk assessment of nearby buildings, signs and landscape
“Flood insurance, like earthquake insurance is not generally covered in standard property policies," wrote William A. Cilente II, Vice President of Marsh & McLennan, on their website. Hotel managers can purchase insurance from the National Flood Insurance Program which can be used for damage and repair costs caused by floods.
Losing power is common so have a back-up generator to provide emergency lighting to your employees and guests, says Cheryl Potenza, General Manager at Hampton Inn in Martinsburg, WV.
Lastly, look out for your employees. "If we know there's going to be bad weather we make sure [the employees] have a place to stay first because somebody obviously has to run [the hotel],"Potenza says.
We all hope that there is never a disaster but the best thing you can do for you and your employees in be prepared.
Hospitality Designs
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