With the development of industries and changes in living standards of the society, demand for electricity is rapidly increasing. In order to maintain the demand supply balance and to provide uninterrupted supply, utilities have to meet electricity demand in the most economical way. Building new power plants is not always the most economical solution. The trend now, is towards reducing and controlling the demand through Demand Side Management (DSM) techniques which lead to almost always economical and environment-friendly solutions. In this paper, Heating, Ventilation and Air Conditioning (HVAC) system of Cinnamon Lakeside Hotel is analysed to identify the potential DSM options that can be implemented. Thermal Energy Storage (TES) was selected as the DSM option to store cooling load during off-peak hours of the day where electricity is fairly cheap and use it during peak and day hours when the electricity is expensive. Technical viability and potential saving that can be achieved through TES in hotel sector of Sri Lanka is further analysed.