Hospitality Leader Upgrades to Advanced Energy Sourcing Process

Leading Hotel Management Firm Turns to Transparent Energy to Modernize and Centralize Energy Procurement Approach, Gain Long-Term Energy Budget Certainty for Its Properties

Introduction

As one of the largest hotel owner-operators in the U.S., with thousands of guest rooms in hundreds of hotels across the U.S., this market leaders knows what it takes to build a winning brand. It also knew that its old way of sourcing electricity and natural gas wasn’t proactive or strategic enough to keep pace with its ambitions – so it made a switch.

No stranger to innovation, the firm turned to Transparent Energy, the leader in technology- and process-assisted energy procurement and the American Hotel & Lodging Association’s (AHLA) chosen energy sourcing partner, to chart a new, better course.

Transparent Energy quickly got down to business.

Changing from ‘Reactive’ to ‘Proactive’ Sourcing

As a first step, Transparent Energy analyzed all of the existing energy contracts for the company’s hotels. Alarmingly, many of them were close to, or past, expiration, a holdover from the prior consultant’s laissez faire approach. Transparent Energy’s analysts quickly put together a strategic roadmap of properties with electricity, natural gas, or electricity and natural gas contracts needing immediate attention, organizing them by state.

Then, over the course of 2023, Transparent Energy worked closely with energy suppliers to execute 70 12-month energy contracts to bring all of the hotel owner-operator’s properties into conformance.

“We liked what we saw in Transparent Energy right out of the gate,” said a representative at the Hotel Management Firm. “The company helped us triage dozens of contracts that were quickly expiring. Once they fixed that, we knew we’d be in a better position to work together to take a more strategic, long-term approach.”

Without the threat of contract expirations and the added cost they incur, Transparent Energy and the client discussed future goals. Top among them, the Hotel Management Firm wanted to gain long-term energy budget certainty. While the initial spate of 12-month contracts highlighted Transparent Energy’s agility and contracting skill, the next phase would highlight the efficiency and scale of its online auction platform and approach.

Long-Term Contracts for Budget Certainty

Having broken out of a ‘reactive’ energy procurement cycle, the Hotel Management Firm was ready to leverage Transparent Energy’s technology- and process-driven sourcing approach to the fullest. And it wanted results quickly. In February 2024, the client alerted Transparent Energy that it wanted 40 properties in five-year energy contracts – by the end of March.

By mid-March, Transparent Energy had successfully run dozens of online and sealed-bid auctions, securing 62 five-year contracts for 40 of the client’s hotels across Florida, Illinois, Maryland, New Jersey, New York, Ohio, Pennsylvania, Texas and Virginia.

How did this happen? The efficiency and scale of Transparent Energy’s procurement process is hard to beat.

Backed by the industry’s most knowledgeable team of energy experts, Transparent Energy once again orchestrated a series of electricity and natural gas buys for the Hotel Management Firm’s properties, working day by day and state by state across the client’s portfolio. In some cases, Transparent Energy aggregated smaller properties into a single procurement, attracting greater interest from the supplier community. In other cases, Transparent Energy brought the loads of individual flagship properties to auction.

In Texas, for example, Transparent Energy brought eight suppliers together to bid on the client’s properties with 10.5 million kWh of annual electric load. The live, online event spurred aggressive bidding – 266 bids in 27 minutes! – across term lengths of 1-8 years for a fixed-price electricity product. Benefitting from the competitive dynamic of the auction, which drove prices down, and the resulting price discovery only available through the auction, the client confidently selected the 96-month term as best meeting its business needs, locking in its power commodity price for eight years!

In short, mission accomplished.

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For more information on how Transparent Energy can transform your energy sourcing process into a reliable driver of efficiency, savings, and budget certainty across your portfolio, contact us at letstalk@transparentedge.com.