Industry benchmark reveals benefits of energy efficiency for hospitality businesses
Energy is now the second highest controllable cost factor for the UK hospitality industry, with leading pub and restaurant groups dually investing an average of 9% of their annual energy spend in efficiency initiatives.
These are the findings of the first annual performance benchmark on energy consumption within the hospitality sector; undertaken to assess its impact on business profitability and environmental performance.
Undertaken by Carbon Statement, chair of the Hospitality Carbon Reduction Forum, the benchmark assessed the energy saving technologies deployed, board level support, employee engagement in energy saving and the level of resource and investment committed to reducing energy.
"Those companies that have started their journey on energy efficiency and are now in a leadership position are outperforming those yet to start, but still too many companies are wasting hard earned profits by not taking energy efficiency seriously," said Mark Chapman, director of Carbon Statement.
"The leading companies that prioritise and implement optimisation initiatives invest up to 10 per cent of their annual energy spend every year, and are seeing results. As energy prices continue to rise, efficient operators will continue to enjoy a significant competitive advantage, especially as the sector operates on such slim margins."
The benchmark revealed the 'stark' difference between the best and worst-performing companies in the sector, equating to a 2% difference in operating margins. It also confirmed that energy has become the second highest controllable cost factor for the sector after labour and, with rising energy prices and environmental taxes eroding margins, hospitality companies will need to grow sales by 12 per cent over the next five years on a like-for-like basis just to stand still.
Chris George, head of energy & environment at Whitbread - a founding member of the Hospitality Forum - said: "We are committed to reducing our environmental footprint both to support our business performance and as part of our obligations as a responsible company.
"The industry benchmarking exercise enables us to identify the key areas where we can improve, to share and adopt best practice across our industry.
"We believe this is the first time comparative energy consumption has been benchmarked in this manner and it is significant that such a highly competitive business sector is leading the way."
Tracey Colbert, at Tragus Group added: "This benchmarking exercise has enabled us to identify how we can improve our energy efficiency."
Carbon Statement works with companies in the hospitality sector to design and implement programmes to reduce consumption on energy, water and waste and improve profitability.
Earlier this week, edie reported on the benefits of recycling surplus food for hospitality businesses, as a new report revealed that the sector is set to spend an extra £32m sending food waste to landfill this year.