Hospitality sector profiting from swift energy efficiency paybacks
A benchmarking tool which measures the energy performances of major hospitality businesses including McDonalds, Costa Coffee and Caffe Nero has revealed that energy efficiency schemes deliver much quicker profitability than opening new sites.
The 2017 Hospitality Sector Energy Benchmark, which includes 32 of the leading pub and restaurant businesses, shows that well-planned energy reduction programmes take on average three years to payback, compared with new openings which can take up to eight years.
Energy management is a major focus for hospitality operators, according to the benchmark, which highlights annual energy costs of £457m per year with cost increases of between 15-18% expected for the sector this year.
Run by energy solutions provider Carbon Statement, the benchmark - also comprising the likes of Whitbread and Greene King - distils best practices from all operators in their approach to efficiency reductions, covering areas such as governance, operations and resource-allocation.
Commenting on the findings, Hospitality Carbon Reduction Forum member Gourmet Burger Kitchen’s non-food procurement manager Carolyn Davies said: “The benchmarking has enabled us to establish our performance against the sector and learn more about latest technologies and practices that operators are using to optimise energy, water and waste. We can use these learnings to make sure we are adopting best practice.”
Around £20m is invested annually by the sector on efficiency programmes, which is on average 7% of participants annual average spend, the study found.
The benchmark shows that three in four hospitality companies now have a multi-year energy efficiency plan in place. Meanwhile, 88% have a dedicated budget and seven in ten have a cross-functional team to ensure successful implementation.
The research notes an improvement on governance with 65% of companies appointing responsibility to the finance director. Almost all decisions around energy efficiency investment are financially, rather than ethically, based, according to the benchmark.
Operational engagement is cited as the biggest win with the quickest payback and savings of up to 35%. On the other hand, profitability in new sites is allegedly often lost through inefficient use of energy driven by poor equipment choices and bad operational practices due to lack of training and enforcement.
With evidence highlighting that hospitality businesses can reduce energy costs by 40% through energy efficiency opportunities, a raft of the sector’s top firms have moved to maximise these savings. For instance, global hotel chain Radisson Blu recently partnered with energy supplier E.ON to install low-carbon fuel cells at its property in Frankfurt, which will generate a large share of the site's energy needs.
Earlier this month, Costa Coffee turned on the lights at its new £38m roastery, a facility which the company claims is "one of the most sustainable industrial buildings in the world". And last year, Costa's owner, Britain's largest hospitality company Whitbread, completed the installation of solar panels on the rooftops of 88 of its Premier Inn hotels across the country.
Meanwhile, international restaurant chain Nando's last year told edie it had been rolling out a number of on-site technology upgrades and innovative behaviour change methods, while exploring the possibility of food waste-powered restaurants, in a bid to take energy management in its UK sites "to the next level".