Evaluate hotel energy performance using data envelopment analysis

Abstract

There are many factors affecting the hotel energy consumption, such as hotel classifications, floor area, numbers of guest rooms, nos. of room guests, mix of guest segments, level of occupancy (guest nights), scale of meeting facilities, laundry, retails operations, building features, facilities features, fuel mix, year of construction, year of retrofit, numbers of staff, weather conditions, management arrangement, etc. In Hong Kong and Singapore, the traditional method of benchmarking by Energy Use Index (EUI) per particular factor however was not able to effectively analyze such multiple inputs and multiple outputs environment. From the previous research papers, the Data Envelopment Analysis (DEA) was applied for the hotel management study in other countries recently, such as Portugal, Africa, Italy, Taiwan and Korean. Recently, the application of DEA to building energy analysis was only limited to residential buildings in US, government buildings in Taiwan, and hotel buildings in Turkey. The study provides a simple and basic DEA model (CCR-I CRS) for the evaluation of hotel energy consumption analysis of a sample hotel in Hong Kong for the tourism /hospitality industry. The DEA model was established with multiple input variables (electricity, Towngas, water, outdoor temperature and relative humidity) and multiple output variables (numbers of room nights, numbers of room guests, and numbers of food & beverage cover). The models successfully identifies the relative efficiencies of efficient decision-making units (DMUs) and inefficient DMUs, therefore the potential of saving areas are shown for further improvement action by hotel management strategic planning. Benchmarks are provided for improving the operations of poor-performing DMUs – months and F&B outlets respectively. Several interesting and useful managerial insights and implications from the study are discussed. Peer groups and slacks were identified among the efficient operations for the inefficient DMUs to adjust themselves in order to reach the efficient frontier. The study suggests a framework which enables the hotel management to develop a strategic action plan with energy conservation measures in different priorities. At the end, the hotel will be able to deliver a high degree of guest service standard and at the same time to preserve the environment by reducing the energy consumption. It is concluded that my area of study is a fit to “the gap”. The end results will form the extension of overseas researches and the foundation of the local researches in this knowledge area.