In the United States, where the clearest data on energy consumption exists, the Department of Energy estimates that the average guest room incurs nearly $2,200 in energy costs annually.
This compares to the average consumer electric bill of $1,400 per year. In other words, a single hotel room consumes nearly 60% more than the average home. In certain parts of Africa where the grid is unreliable and the weather is hot all year-round, these numbers can be far higher.

What are these expenditures when itemized? Primarily cooling, which can represent up to 30% of costs; then lighting, which can form between 20-25% of costs, kitchen equipment (8-10%), and finally, back-of-house (7-8%). This energy expenditure can represent anywhere from 6 to 10% of revenues and is one of the fastest growing costs in the industry. With such a significant expense, one could understand any property owner wanting to seriously consider controlling it. Nevertheless, there are hoteliers who see guest satisfaction and cost reduction as being mutually exclusive, and prioritize guest satisfaction. So if a guest wants to keep the lights and air conditioning on, even while they are not in the room (which can be up to 60% of the time), they are welcome to do so. As a guest, even if you turn off the cooling system, often housekeepers will turn it back on while you are away.

COMMITMENT TO SUSTAINABILITY

Since its inception, Kasada has been focused on delivering innovation to the African hospitality sector across all verticals, and this includes taking a hard look at controlling utility costs while maintaining, if not improving, guest satisfaction. As the leading hospitality investor on the continent, Kasada is a signatory to the United Nations Principles for Responsible Investing and has set the ambitious target of achieving EDGE certification of all its hotels within 18 months of acquisition. To obtain this green certification, we established a rigorous process, with strong collaboration between our in-house technical experts, hotel operations team, and external stakeholders relevant to each property, who review and vet all initiatives. This teamwork is especially important for the African continent, where cities and countries display significantly different weather patterns between in each other and compared to Europe or North America. Not only do we invest in our buildings, we are also introducing green labels inside the rooms and public areas. Our aim is to improve the entire guest experience through increased awareness while providing more support to our staff for these initiatives.

The high average cost of utilities across our portfolio reveals the complexity accompanying operations across a vast geography: certain markets have better year-round weather (Dakar), whereas others exhibit water scarcity (Windhoek). Each requires a specific, tailored approach to address the underlying causes of energy inefficiency and wastage. Despite these high barriers to success, by the end of 2023, Kasada will have EDGE-certified all of its existing operating properties – 16 hotels totaling 2,903 keys, across seven countries. We have surpassed the 20% savings requirement on energy and water required for level 1 certification.

In the case of Pullman Dakar, an hotel first opened in 1973, we even managed to achieve EDGE Advanced, which is awarded to projects generating over 40% in energy savings. Such an achievement on a 50-year-old building illustrates the kind of innovation Kasada is bringing to the market which can be replicated in Africa or anywhere else for that matter. This is a considerable achievement given the complexities and nuances faced with each property, the various geographies involved, and that most of our acquisitions took place in 2022, putting us ahead of schedule for the latest hotels in the portfolio. These investments were all made with an envisaged positive return on investment. With such scale, Kasada stands out as a market leader in this regard in the industry, with no other hotel owners in Sub-Saharan Africa having as many certified properties.

BENEFITS OF GREEN CERTIFICATION

Across its portfolio Kasada estimates average annual reductions in energy and water usage per year to be 30-35% depending on the age of the property (some of our hotels were built in the 1970s). Not only are we pioneering in demonstrating that hotels can have it both ways (better energy control alongside guest satisfaction), but we are saving 1-2% of revenues. Across our portfolio hotels, this represents millions of dollars annually in savings and supports greater profitability. On a more general level, the certification is a signal to guests, investors and other stakeholders of our commitment to sustainability and alignment with global best practices.

Kasada has streamlined the green certification process across its portfolio, resulting in key efficiencies throughout the process and an optimized approach to certification. Through a rigorous Kaizen approach, each hotel undergoes an assessment across all departments and hotel areas to review and challenge the existing operational practices, which has direct and indirect impacts on energy and water consumption. Following this review, different measures are put in place that can range from capital-intensive investments in materials and equipment additions (such as solar panels) to less-capital-intensive, low-tech, behavioral interventions. For example, to reduce cooling needs in our West African hotels, we introduced a special coating on the roofs, which resulted in a 50% reduction in roof temperature and brought down the cooling needs of the entire buildings. Using air conditioning less results directly in lower operating costs and indirectly in a longer lifespan for the HVAC equipment.

While technical improvements can be made across all our properties, it is behavioral interventions that remain a key way of mitigating high energy usage at the hotels. A key tenet of Kasada’s strategy is to identify behavioral changes that can be implemented quickly, at low cost. Kasada invests extensively in training employees to recognize ways to mitigate spend. Turning off the lights when no one is around, whether in the hotel offices or guest rooms; learning from guests about their preferred room temperature, rather than keeping the rooms excessively cold: these are low-cost interventions any hotel owner can implement to make a difference. Getting employees on board with the approach has been fundamental to our success.

With brownfield investments we often need to work with (or against) 30-plus-year-old buildings with heavy structures and equipment built with inefficient materials that need to be worked against or altered. Greenfield investments are an opportunity to build with sustainability in mind from the onset. In Kasada’s four greenfield projects, the technical teams are able to innovate with architecture and design to create buildings that minimize energy consumption by using natural cooling and sustainable materials. With the latest in building management technology, in-house maintenance teams are able to see electricity and water usage in near real-time, to proactively reduce consumption and identify potential issues such as leaks.

Over the last three years, Kasada has created a portfolio of over 3,300 keys across eight markets in Africa, and has managed to obtain green certification on hotel brands as varied as Ibis to Fairmont. As sustainability innovators in the African hospitality industry, our hope is that this can be replicated across the entire industry.