The Big Picture

A recent ENERGY STAR study found that on average US hotels spend $2,196 per available room on energy each year, representing approximately 6% of all operating costs. With energy playing such a prominent role in your profit and loss (P&L) statement, hotel owners and property management firms need solutions that reduce energy costs.

A key way to do this is through improved energy procurement. How you buy your energy matters, and who you entrust to help you buy it can mean the difference between saving or losing money. Operating in every deregulated energy market in the US for more than 5,000 satisfied customers, Enel X has built a stellar reputation for energy procurement excellence. Whether you own a single hotel or a portfolio of properties, we have the right people, process, technology, and supplier relationships to help you extract the best price from the energy market.

More Suppliers Bidding for Your Business

We recently ran a series of successful pricing events for three hotels in New Jersey. With the electricity contracts at these properties soon expiring, this Asian American Hotel Owners Association (AAHOA) member turned to Enel X to collect energy usage data for each hotel, develop and market electronic RFPs to the supplier community, and run a series of online reverse auctions to create a hyper-competitive marketplace where suppliers shed margin to win business. The result? 135 bids placed by 14 suppliers over the course of one hour and six auctions, resulting in more than $370,000 in energy-rate savings over a 24-month term.

The online auctions were intense. They tested pricing on a combined annual load of 9.3 million kilowatt-hours (kWh) for an “all-in, fixed requirements” product for 12-, 24- and 36-month terms and also for a product that included 10% green energy. The hotelier watched live as the auctions shattered key price barriers. Within minutes, the current contracted commodity rate was beaten, falling from $0.0899/kWh to $0.0850 and soon to $0.0800.

Getting the Best Price

Once the eight-cent mark was cleared, the competition really heated up. Two suppliers asserted dominance, and one got so aggressive it outbid itself in the final seconds of successive auctions. When the leading bid hit $0.0750/kWh, nearly a penny and a half below the original price to beat, the hotelier got excited. At $0.0710 there was a feeling of, “You’re kidding me!,” and when the final winning price of $0.0699/kWh came through, the room erupted into cheers.

Adding to the drama, and unbeknownst to Enel X, one of the hotels had almost pulled out of the auctions. Unsure the process would work, the hotel had sought pricing from another broker and landed what it had thought an unbeatable rate. Fortunately, the aggregation held, and the three hotels went to auction together. The winning auction price came in 12% below the other broker’s price, delivering an additional $70,000 in annual savings.

“I am delighted with the price Enel X got for us,” said the decision maker. “We have used Enel X frequently over the last few years, for both small and large properties, and they reliably deliver the best price. Any time we have questions, they are there for us. Their people are very helpful and forthright, and their processes for procuring energy are superb.”

Fast Facts

Industry: Hospitality
Savings Over 24-Month Term: $370,000
Total Annual Load: 9.3 million kWh
Number of Suppliers: 14
Total Bids: 135