Hotels & Hospitality

Ask almost any hotel General Manager what keeps the hotel running well and they’ll talk to you about occupancy, average daily rate, review scores, staffing. Energy cost almost never comes up, yet it represents one of the biggest controllable line items on the P&L; behind a building that cannot just ‘turn off the lights’ to reduce expenses. Hotels run simultaneous hot water systems, heating, kitchens, AC, and lighting 24/7 because a cold room or an unreliable shower is a one-star review in the making. That is the first, and primary, constraint on any renewable energy solution in this space; it must protect the customer experience while generating savings, not the reverse.

In reality, the three things that usually persuade a hotel (or hotel group) to come to the table are:

• A parent company decides on a Net Zero target and it ripples all the way down the org chart until it lands with someone at property level who needs to action it
• A refurbishment is planned for, and somebody poses the question of whether solar should be incorporated as it's only the roof and services that are being worked on anyway
• A franchisor amends brand standards in such a way as to implicitly introduce one

What all of this doesn't start out as is an energy conversation. It starts out as a regulatory conversation, a capital planning or a corporate reporting conversation that finds its way over to the Arc Renewables desk.

A group of 50 properties is not the same kind of "hospitality" client as a single hotel. The majority of the project for a single hotel is based on the refurbishment cycle of that building, and a single group's brand guidelines.

• With groups, it is never a technical problem, it's always sequencing. This needs to be thought through and depends on.
• Applying consistently the same valuation measures across each property within the portfolio
• Balancing the capex cycle of each individual property relative to the Group's Net Zero targets as a whole, as opposed to in isolation.
• Developing a justifiable justification to the board required a repeatable answer and not 50 isolated opinions.

This is what catches out contractors that usually work with empty commercial buildings. Installing a hotel has to take place with the building being operational, therefore the programme is based on this.

• Use actual low-season weeks where available rather than an imaginary construction schedule (occupancy)
• Delays guest-visible work as long as possible
• Work which causes noise timed relative to what the building is actually doing each week

Failing to get that right doesn’t just annoy guests, it translates straight into revenue.

A solar installation that is activated and forgotten silently becomes less and less valuable the longer it is left unattended. With a hotel, whoever is watching over it needs to speak two different languages:

• On-the-ground daily operational language used by internal hotel maintenance staff
• The reporting language a corporate Net Zero disclosures statement will require from a group sustainability function

One type of reporting that tries to achieve both often satisfies neither group equally, which is why ongoing asset management for Arc Renewables’ hospitality clients is constructed to generate both from a single source of data, instead of one group having to translate the other’s spreadsheets.

To groups with a corporate Net Zero goal, the value of property-level renewable energy actions can only be translated by head office when the results feed smoothly into the current reporting framework. To be such, it needs to:

• Scope 2 modelled at the property level right from the start rather than afterwards.
• REC strategy procured using the methodology established group-wide.
• Data supplied in a format which feeds into the sustainability reporting at the group-level (no data handling at head office).