Energy Tips for the Hospitality Industry – TMT

February 16, 2021 – In this FAQ February video, Strategic Energy Advisor Sam Greenberg tackles a question he’s been asked frequently over the past year by our hospitality clients: “What are other companies doing to stay in business?”

Video Transcript

Over the past 12 months, one could argue that the industry most negatively impacted by the COVID-19 pandemic has been the hospitality industry. In this week’s Two-Minute Tuesday, we’ll be tackling the number one question we were asked by our hospitality clients during this past year: “What are other companies doing to stay in business?”

Two Energy Strategies for Hospitality Clients

2020 was painful for all businesses, but the hospitality industry was one of the hardest hit. Revenue plummeted due to both shutdowns and to lack of demand from people traveling.

Many of these businesses had to get creative to save money. Specific to energy, the two opportunities that ultimately provided the biggest return for our hospitality clients were demand response and electricity agreements.

Let’s take a deeper dive into how these two strategies supported our hospitality partners in 2020.

Demand Response

Let’s start with demand response. As a hotel owner, if you haven’t looked in to signing up for a demand response program, I highly recommend doing so now.

Depending on the area of the country and your utility, demand response programs can pay you money for curtailing your usage in a planned one-hour test event. We’ve seen annual payments for our hotel clients between $5,000 and $30,000 for participating in the program.

Energy Agreements

Along with demand response, the past 12 months has put an extra focus on electricity and gas agreements. Several months of 2020 saw natural gas rates fall to their lowest level in 20 years.

Our hospitality clients took advantage of that market opportunity and were locking in these lower rates for longer terms, some up to 48 months. This was helping them reduce their energy costs, creating budget stability regardless of increases in the market, and ultimately ensuring that their rate was going to be lower than most of their competing hotels who were not taking the same approach.

 

Even if you missed out on the low prices of 2020, there are still opportunities in the current market to fix either natural gas or electricity rates. There is a consensus forming around a bullish energy market in 2021, so being proactive and fixing rates now can protect your budget from these possible increasing costs.

If you’d like to hear more about the topics we covered today or ideas around saving money on your energy, please contact me or any of our Nania Energy Advisors today. Thank you for watching!

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