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How a hotel group identified energy-efficient investments
Owner of Kegworth Hotel & Conference Centre, Hitesh Kanabar shares how the Green Buildings Tool helped him assess the benefits of introducing sustainability initiatives.
Read time: 2 mins Added: 17/05/2023
In the face of climate change and environmental concerns, businesses across the globe are seeking ways to incorporate green initiatives into their operations. Net Zero by 2050 is the target for all UK businesses but how far have SME businesses travelled down the road to Net Zero?
According to our SME Net Zero Monitor, 95% of SMEs are aware of the Net Zero target, with 64% having a plan and 7% already having reached this goal. Hitesh Kanabar, owner of the Kegworth Hotel & Conference Centre and the Queensgate Hotel & Conference Centre, will soon join the 7%. “We are on target to reach Net Zero by the end of this year,” he says.
This is a relatively new aspiration. For Hitesh, in recent years, ‘sustainability’ was seen as additional cost in disguise. “I could see money walking out the door,” he says. What changed his thinking was a conversation with his Relationship Manager Darren Billinge about our Green Buildings Tool.
New learnings
Darren points out that from a single property through to larger portfolios, “the tool helps businesses identify, evaluate and understand the estimated outcomes of potential investments to properties more sustainable and energy efficient.”
To start with, Hitesh used the Green Buildings tool to perform an audit on his hotels’ energy usage. “It allowed me to see how much CO2 we were producing. That created a completely new roadmap for us.”
He also used Cornell University’s Hotel Sustainability Benchmarking Index as an additional lens into what best practice sustainability protocols should look like.
With the “highly underrated” Green Buildings Tool as his guide, Hitesh then began installing solar panels, new energy-efficient boilers, new central heating controls in hotel rooms, and charging points for electric vehicles.
He adds: “Everything was governed by ‘return on investment principles’ – but because we now understood the science and methods better, we were more confident of our calculations. Our journey of sourcing more produce from local suppliers is just getting started.”
Competitive advantage
While implementing these changes required initial investment, Hitesh believes that what they have will pay off in the long run.
“Our profit and loss statement was suffering in the face of near trebling energy costs. But with the initiatives mentioned, we were able to purchase a significant portion of energy at the reduced cost of 16p per kWh compared to a run rate of 30p per kWh and also take the benefit of ‘free’ energy generation. We expected our energy bill for February 2023 to increase from £5,000 to £12,000, but instead was limited to less than £6,000. It’s still a rise, but a more manageable one.
Not only have these energy and waste reduction initiatives resulted in cost savings, but they have also helped the hotel to stand out in a competitive market. Hitesh notes that many customers are now seeking out sustainable hotels and are willing to pay a premium for eco-friendly accommodations.
He expects that the hotel’s new positioning will “appeal to corporate and government spending sensibilities and attract more patronage to the hotel and its extensive conference facilities – especially as there are only a handful of other hotels that can make a similar stand.”
“When you’re able to extract some kind of competitive advantage, the momentum for green energy will increase,” he says.
Flight to quality
The hotels’ success highlights the importance of adapting to changing market conditions. Hitesh notes that the hospitality industry has faced numerous challenges over the past few years, including the Covid-19 pandemic and economic uncertainty. However, by focusing on sustainability and quality, the hotels were able to differentiate themselves from competitors and attract customers even during challenging times.
Hitesh adds that by reducing waste and emissions, the hotels are helping to protect natural resources and reduce their contribution to climate change. He now believes that businesses have a responsibility to prioritise sustainability and reduce their impact on the planet.
Darren Billinge agrees: “If the UK’s 5.5 million SMEs act now, the potential is huge. Saving money whilst being more sustainable is a clear benefit so we’re really glad the Green Buildings Tool could help Hitesh’s business in this respect.”
The SME ecosystem can look to the Kegworth and Queensgate hotels as a source of inspiration. Ultimately, “it’s about the numbers,” Hitesh says. “We had a really successful year in 2022 and thanks to the green initiatives we implemented I expect 2023 to be similarly successful despite higher energy costs.”