WORLWIDE: Situ has released a white paper, which shows a snapshot of the impact of rising energy costs on the extended stay sector.
The 14-page white paper was written based on recent research with accommodation partners across Situ’s global supply chain.
In response to a survey sent out to more than 500 accommodation partners globally, 75 per cent of those who replied said they are at risk of having to increase rates, with the estimated rise being between 10 per cent and 25 per cent.
Rate increases are the preferred method for 70 per cent rather than a possible energy surcharge.
The research also showed that 77 per cent of all respondents will be putting awareness programmes in place to encourage guests to be mindful and efficient with their energy usage.
Situ also found the extended stay sector might work together to tackle the challenges with the collective negotiation of rates with energy providers. Other ways to ride the storm included seeking support from the government in terms of VAT reductions, tax breaks, energy caps for businesses of all sizes and overall clarity on the way forward.
Phil Stapleton, managing director of Situ, says, “We felt it was essential that we conduct this research, given the ongoing impact on our sector of the energy crisis. It’s important that we help to manage our clients’ expectations and continue to be transparent in terms of rates and charges. We will of course, continue to negotiate the best rates possible for all our customers.”
Stapleton noted that operational change will be of a necessity to reduce energy usage as well as citing the opportunity in the sector to introduce technologies to reduce and track energy usage and to engage in conversations about sustainable sources of energy – as well as aligning operational efficiencies with strategies around Environmental, Social, and Governance (ESG) programmes.
Phil Stapleton added: “Although increased accommodation costs are a possibility in 2023, Situ is furthering our commitment to our operations both through sustainable and cost-controlled programmes throughout this year and into the future. An example of this is our planned investment in solar panels and battery technology this year which will power Situ HQ in both its current footprint and in our soon-to-be-announced expansion.”
The survey also revealed other impacts that accommodation operators are currently dealing with in addition to increased energy costs.
Top of the list was lack of labour and resources, as cited by 50 per cent of respondents; while 32 per cent said that assisting staff with the cost of living was affecting their business.
The value of the pound versus the dollar was given as an issue by 25 per cent of those who replied.
‘Other’ impacts included cash flow; inflation; legislation (around short-term lets); interest rates; lack of inventory (due to law changes); and lack of demand due to rate increases.
Situ’s survey was made up of eight questions. It was sent to over 500 accommodation partners globally in November 2022, which included both national and international partners who operate a range of types of buildings from aparthotels to residential buildings, as well as vacation lets.
The white paper is available to read here.
Situ was recently awarded a Carbon Neutral standard by the Carbon Footprint Ltd.
