As prices soar across the globe, hoteliers must find ways to control hotel energy costs in order to stay competitive in a highly price-sensitive market.
NB: This is an article from Mews
One of the most important things a hotel can do to counteract this price gouging is to find ways to purchase energy more competitively, relying on green energy when possible and more energy-efficient appliances.
Subscribe to our weekly newsletter and stay up to date
In this article, we’ll look at some of the best ways to prevent high power costs in a hotel and look at more in detail how the energy cost crisis is affecting the hotel industry. The best way to confront the crisis is without a doubt to be prepared and informed.
How is the energy cost crisis affecting the hotel industry?
While many hotels have already made efforts to reduce energy costs and consumption prior to the crisis by investing in greener technology and making their properties more energy-efficient, the current global situation has an important impact on the hotel industry. In a sector with such a huge demand on electricity, increasing costs mean many hospitality businesses are forced to raise prices to compensate for the rising rates, and some properties have even decided to close.
In order to survive, as electricity accounts for roughly 15% of the room cost, the hospitality industry will be forced to increase prices by at least 25%, which can have a direct impact on demand in a sector that is recently recovering from a pandemic. Plus, hoteliers may find it difficult to pass on added costs for energy to guests seeing as they are already paying above average prices, and with the overall rise in cost of living, disposable income may be limited.
The energy cost crisis will force hotels to have even more robust pricing strategies to be able to compete with your compset while reacting to market conditions by regularly updating rates. Higher rates mean more demanding guests, so hotels must provide a high level of service to cater to these guests and create value despite rising costs.
Redirect marketing efforts to the APAC region
While some governments are giving rebates to combat this crisis, the best solution may be to redirect marketing efforts towards the APAC region, which has an increasing middle-class with more disposable income. Seeing as their trips are less frequent and often shorter, the APAC market may be less price-sensitive than the West.
Compromised guest experience
In some countries like Spain, the government has mandated hotels to keep their thermostats at certain minimum levels for the coming year, meaning they can’t go below 19 degrees Celsius (66 degrees Fahrenheit) and above 27 degrees Celsius (80 degrees Fahrenheit). These types of government mandates could negatively affect the guest experience, as guests may experience hotter or cooler temperatures at the hotel than they are accustomed to.