TLabs Showcase on travel startups featuring UK-based hotel green technology service SaveMoneyCutCarbon.
Who and what are you (including personnel and backgrounds)?
SaveMoneyCutCarbon has a simple goal – to help hoteliers save money by cutting energy and water costs. For the first time, we have brought together a suite of energy and water-savings solutions that can be retro-fitted to any hotel room in under 60 minutes, reducing waste but without restricting use for the guest.
The advice-driven online hub (www.savemoneycutcarbon.com) gives guidance and fully tested products that save hoteliers money.
A combination of educational videos shot in live hotels and access to a unique hotel bedroom energy and water savings calculator allows hoteliers to quickly understand the workings of the product, the savings available, as well as the impact on their carbon footprint.
These simple, guest-friendly solutions can quickly pay for themselves and so add to the bottom line of any hospitality property.
We aim to reduce supplier complexity and management requirements, resolve the challenge of capital approval and help hotels move beyond compliance, to save money and truly reduce environmental impact. Hotels can go green, fully backed by a sound business case.
The founders are:
What financial support did you have to launch the business?
- Mark Sait (founder and director) - Mark has more than 20 years’ experience building and establishing companies in fast-growth technology areas, including broadband, Web 2.0 and mobile, as well as environmentally responsible areas, such as water and energy saving.
- Charlie Farr (founder and director) - Charlie is an experienced entrepreneur and business professional. His successful business and investment career spans more than two decades, working in markets across Europe.
SaveMoneyCutCarbon has been fully funded by the founders to date.
What problem are you trying to solve?
The Carbon Trust estimates that energy savings of up to 20%, equivalent to more than £200 million, are possible across the hospitality sector.
Energy and water are one of the top Operational Expenditure costs to a hotel and there is huge waste in the sector. The cost of energy and water is only going to increase, compounded by the legislation to reduce carbon footprint.
Rooms are heated, cooled and lit, often when the guest is not present. Water use in guest rooms is also a fundamental area where substantial savings can be made. The key is to remove all barriers preventing hoteliers from adopting these products and reducing waste rather than trying to restrict use or change guest behavior
The main challenge in the hospitality sector is ownership of the “savings challenge”. Where does the commercial “green” responsibility lie in a busy hotel and who has the time to focus on this? It could be the operator, the owner, head office, the general manager, the chief engineer or the front desk manager.
Whether it be approving the finance or testing a product to verify savings, this is often a time-consuming task and hotels often do not have the resource, which means that many of them have yet to exploit the savings available.
The answer is to simplify the complexities of energy-saving solutions and so enable hotel professionals to own the challenge and take decisive, money-saving actions.
SaveMoneyCutCarbon reduces financial and environmental waste without restricting usage, which could impact on guest satisfaction.
Its service is tailored specifically to the hospitality business and all products have been sourced and tested for hotel usage. New products and solutions are being tested all the time, allowing us to cover off all types of hotel room, including established or new bed & breakfasts through to a chain group or a 5-star property.
While the guest experience is uppermost in mind, SaveMoneyCutCarbon also provides solutions for all areas of the hotel property.
Describe the business, core products and services?
SaveMoneyCutCarbon is a one-stop shop for reducing water and energy consumption in hotel guest rooms, without affecting guest satisfaction. The service is tailored specifically to the hospitality business, and all products have been sourced and tested specifically for hotel usage, placing the focus on reducing waste, not restricting use.
SaveMoneyCutCarbon combines a hospitality team, expert at removing financial constraints and overcoming barriers to entry formed by the huge range of products and services, with an online resource that shows how hoteliers can make substantial savings.
A key resource for hoteliers is the unique online calculator tool, the first of its kind to be developed for the hospitality industry.
This tool gives hoteliers instant annual savings forecasts and it has been developed to feature realistic usage rates and accurate savings projections. Hoteliers can then buy directly from the website or opt for the full partnership option with no capital requirement.
SaveMoneyCutCarbon is confident of the savings that hoteliers will make, and offers a capital-free partnership option. This means the team will survey, supply, install and maintain the products free of charge, and in many cases simply share an agreed percentage of savings achieved through the reductions of electricity, water and carbon tax charges.
There is no initial capital outlay by the hotel; all other savings are passed directly to the hotelier. Furthermore, the products will reduce the hotel’s impact on the environment, which is an essential requirement for any responsible hotelier and a powerful differentiator.
Who are your key customers and users at launch?
Our customers are hotels ranging from multi-national chain hotels to individual guest houses. Our users will be guests who stay in these properties, as well as the staff who use water, heat and light. If the guest room has a light, a toilet, a sink, shower, through to the most advanced air-conditioning, there are savings to be made.
Did you have customers validate your idea before investors?
Yes, we tested and trialled a full range of water and energy saving products and solutions in busy London hotels before presenting the results to an audience at EHTEC 2010 (European Hospitality Technology Education Conference).
SaveMoneyCutCarbon has spent the past 18 months reviewing many different energy and water reduction products, measuring the savings and testing robustness in a live hotel environment. We have calculated the payback periods and checked that there is no impact on guest satisfaction.
What is the business AND revenue model, strategy for profitability?
This is dependent on the hotel and their choice of how they want to purchase, finance, install and maintain the products. If the hotel has free access to capital and the resource to install they can order directly from the website and SMCC makes its money as normal.
The site has been built to take credit card purchases directly online or to allow hotels to order through the website via an official Purchase Order
If the hotel has limited access to capital, SMCC has a option to allow the capital cost to be funded through the savings being made on the properties electricity and water bills.
The hotel can opt to use the trained SMCC install team or use its own contractors. For more high-tech solutions like the HVAC control, which uses the latest ZigBee wireless technology to link micro sensors in the room, the SMCC team would always be involved. If it is fitting a shower head, then the hotel may choose to do this itself.
The business model has been developed to remove the barriers to hotels adopting energy and water savings solutions, which are a benefit for any property’s bottom line and for the planet.
SWOT analysis – strengths, weaknesses, opportunities and threats?
- Strong experience in the hospitality industry
- Strong experience in sourcing and testing relevant products
- In-depth research and development with hoteliers
- Clear financial and environmental savings provided by the offering
- Capital free partnership option
- Flexibility of offering – i.e. hotels can buy one product or all products
- Logical response to increasing costs and environmental impact of hotels
- Product agnostic
- We remove choice anxiety/paralysis to offer a simple set of products that deliver real results
- Adoption will be driven by legislation, increasing cost of energy and water and guests demanding to see the green credentials of hotels they choose.
- New business offering meaning challenges to build trust, which is offset by detailed research and trials over the past 18 months, in-depth understanding and experience in the hotel sector.
- Environmental legislation will force hotel businesses to take their environmental impact more seriously
- Products designed to fit into the full range of properties, from the smallest bed and breakfast, through to boutique hotels and the largest chains
- Solution will have a real impact without affecting guest satisfaction
- Adoption will be driven by legislation, increasing cost of energy and water and guests demanding to see the green credentials of hotels they choose
- Sector specific – rather than suppliers that supply everyone but do not know nuances of hotels sector.
Who advised you your idea isn't going to be successful and why didn't you listen to them?
- Logistical challenges of supplying products on a large scale, but offset by agile fulfilment procedures.
- The wide range of hotel build type
- Apathy in the sector
At present, everyone likes the concept and the need exists but the first hotels we visited and surveyed believed they could always buy products cheaper than SaveMoneyCutCarbon because of their size, especially on the lower-value items readily available from various web suppliers.
That said, none of these hotels had actually done anything or deployed the products – which was interesting.
There was very strong interest in the higher-tech HVAC control which appealed to larger hotels but we believe it makes good business sense to install the other solution while we are in the room as this a small incremental cost, for a large incremental value/saving.
There seems to be a lot of talk but not much action in the sector to date. We listened to feedback, but, having built businesses in the hotel sector before, you have to be careful about the first few general managers telling you "it will never work". Hotels will have to act on waste and carbon footprint and we intend to be there to help.
What is your success metric 12 months from now?
We aim to have 1,000 rooms under management and to be beating the savings predicted. We also want to demonstrate that on a hotel-by-hotel basis, we have a profitable model that allows us to scale.
NB: TLabs Showcase is part of the wider TLabs project from Tnooz.