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Enterprise System Pitfalls: Summary
Today I’m wrapping up a series of posts on the broad topic of Enterprise System Pitfalls. In this series, my hope was to help shed light on the primary problems that cause us to miss budgets, fall short on capabilities, or completely fail when implementing an enterprise system. 

The Year in Review
 
As 2019 comes to a close, it’s time to count our blessings. One of mine has been the privilege (and fun!) of being able to reach out to so many interesting companies and get them to tell me what they’re doing that’s different, disruptive, and game-changing. The list of things I have to write about in future columns has only gotten longer in the nine months since I started writing this column.

Sustainable Innovation
 
Sustainability can yield multiple benefits to hotels. Saving energy and water yields direct cost savings. Revenue can be generated by guests who prefer to deal with businesses that minimize their environmental impact. And many would argue that conserving scarce resources is simply the right thing to do.

Meetings Innovation
 
The sale and delivery of groups and meetings is perhaps the most significant and under-automated functions for many hotels. Even though groups often account for 30% to 60% of revenue, most group bookings are still handled manually for most if not all of steps, as they move from a meeting planner’s research to a confirmed booking.

The biggest enemy to any system is complexity. In a system of inputs and outputs, such as an enterprise system, more complexity means more parts are used in interaction with inputs to create the outputs. Every part that must be built and maintained costs time and money



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Technology Innovation Brings Electricity to the Hotel Industry

04/25/2014
by Trevor Warner
Hotels’ total energy consumption costs can be 6 percent of the operating cost and utilities cost continue to rise. While energy management focuses on the amount of consumption, cogeneration allows the hotel to have greater control on the cost of consumption. While other energy-reducing technologies have produced limited results, cogeneration appears to be a technology that will meet expectations. It’s a technology that has significant corporate investment behind it so we expect to see continued research and development to improve the technology and lower its pricing. 
 
Cogeneration, known as combined heat and power (CHP), is the production of heat and power from a single-fuel source. A cogeneration plant looks like a shipping container and inside is a power plant that takes natural gas and converts it to electricity. In the process of creating electricity, heat is generated that can be used to supply the heat necessary for the property to operate. 
 
The CHP plant supplies 95 percent of the electricity needs of the property. Hotels typically stay on the grid for the remaining 5 percent in the event of an outage or a need that might outpace the output of the CUP plant. 
 
The primary reason for a change to cogeneration would be financial savings. An additional benefit is creating a more reliable and improved power supply. In large cities such as New York and Los Angeles getting off the grid can often be a greater priority than the financial savings. 
 
The typical profile for a hotel that could install cogeneration would be: 
  • 100 or more rooms
  • High electric rates 
  • Hot water heating system
  • High use needs such as on-site laundry, heated pool or local climate extremes 
 
Cogeneration is not new. The first systems started to go in around 2005. The early adopting hotels were more about green exposure or had extremes under the typical profile that made significant financial sense. The draw back was always the upfront expense of the CHP plant. The payback was there but not quick enough for the property to recoup its investment. However, as the technology has continued to develop, the purchase price continues to drop. The current payback for the investment is right at three years and it is expected that timeline to continue to decrease. 
 
The other significant change is the evolution of the business model. Like any product, it takes time for the companies who sell and install the product to develop and mature. This evolution is now creating opportunities for shared savings, financing, and guaranteed pricing. We have seen a significant increase in companies who will install the CHP plant and charge the hotel a set rate below the cost of their current spend. While hotels enter significantly longer contracts to implement this guaranteed savings solution, their upfront financial exposure is reduced to zero. 
 
I’m just waiting for the residential version or better yet, the Mr. Fusion so I can install it in my Delorean.
About The Author
Trevor Warner

Warner Consulting Group


Trevor Warner is an industry expert and consulting for the hospitality technology field.

 
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