Press Release
February 23, 2001
NEW YORK, NY -- Profits in the lodging sector have ballooned in the last decade, spiraling from break-even in 1992
to an estimated $24 billion in profits at the close of 1999.
But savvy hospitality industry leaders understand the cyclical nature of the business and economy, and, having
seen a slight depression in lodging stock valuations, are aggressively consolidating operations and improving efficiencies
to get the most out of every property.
In response to this growing trend, Ernst & Young LLP's Hospitality Services Group has developed an Energy Advisory
Service, designed to help lower costs and identify hidden pockets of actual savings for both large chains and individual
owner/operators alike. The announcement of the unique service was made by M. Chase Burritt, National Director of
the Hospitality Services Group, the largest and most comprehensive lodging advisory practice in the US.
Through the Energy Advisory team, Ernst & Young's Hospitality Services Group helps clients identify and implement
energy conservation measures that significantly lower energy demand and consumption. Clients realize substantial
cost savings through informed commodity purchasing and rate optimization. To fully exploit cost-savings opportunities
in both regulated and deregulated electric and gas markets, Ernst & Young's Energy Advisory team helps select
new suppliers or re-negotiate existing contracts with utility companies. Supply-side services include: Regulatory
Analysis by State; Rate Tariff Analysis; Utility Bill Audits; Contract Negotiation Assistance; Contract Risk Analysis;
and Supplier Selection RFP Process.
``We have helped our clients to identify and implement energy conservation measures that significantly lowered
energy demand and consumption,'' said Mr. Burritt. ``Our clients can also realize substantial cost savings through
informed commodity purchasing and rate optimization.''
When a leading four-star hotel chain wanted to take advantage of the newly deregulated electricity markets and
reduce their commodity costs nationwide, Ernst & Young was engaged to provide contract negotiation assistance,
through an RFP and bid analysis process for electricity procurement for the nationwide portfolio of properties
on a regional basis. The result was a total energy cost reduction for properties in specific deregulated regions
of the country as high as 6 to 17 percent. With the assistance of Ernst & Young's energy team, the chain has
taken control of its energy costs through a comprehensive strategic management program that includes an integrated
supply and demand side strategy that is proving to be very effective.
Ernst & Young's energy team has the engineering knowledge and know-how to identify and evaluate energy conservation
opportunities for all types of facilities and operations through investment grade audits. Some cost-saving measures
include: boiler and chiller plant upgrades; lighting upgrades; HVAC efficiency improvements; on-site power generation
evaluations; energy management control system upgrades; refrigeration upgrades; peak demand reduction or load shifting;
and insulation upgrades.
Energy specialists also provide project management services in the design and installation of new energy efficient
systems and equipment. Drawing on their substantial experience in the utility and engineering industries, Ernst
& Young advisors are able to assist clients obtain their goals of having projects installed within budget and
on schedule, operate as designed, and achieve the predicted cost savings. Project management services include:
Engineering Design Review; Construction Management Oversight; Commissioning of New Systems; Measurement and Verification
of Savings; and Operator Training.
The Ernst & Young Hospitality Services Group works closely with other professionals of the firm to provide
financial, tax and accounting strategies to help maximize a client's return on energy conservation investments.
In addition, Ernst & Young real estate tax specialists complement these services to better enable a client
to meet its corporate financial objectives and realize a higher return on energy related initiatives. Financial
solutions include: off balance sheet financing; self-funding projects through performance contracts; and sale and
leaseback of energy assets to free-up operating capital.
With over 50 dedicated advisory professionals, the Ernst & Young's Hospitality Services Group is the largest
hospitality practice among the Big Five accounting firms, offering a full scope of integrated, multi-disciplinary
services - including acquisition, development, operations and disposition - for every major segment from lodging
to travel, tourism to attractions.
Ernst & Young's Hospitality Services Group maintains a dominant market position in such major markets as California,
Phoenix, Dallas, Atlanta, Philadelphia, Chicago, Boston, New York, and Miami. It also has extensive international
experience in Latin America and the Caribbean, Europe, the Far East, and Pacific Rim.
Ernst & Young, a global leader in professional services, helps clients to quickly and confidently make financial
decisions designed to enhance value. Its 77,000 people in more than 130 countries have the industry and financial
experience to provide fresh perspectives on operating in the new economy. Ernst & Young offers traditional
audit and tax services, as well as customized services in corporate finance, online security, risk management,
the valuation of intangibles and e-business acceleration. In addition, legal services are available in various
parts of the world where permitted. A collection of Ernst & Young's latest ideas on the new economy can be
found at www.ey.com/thoughtcenter.
Ernst & Young refers to the U.S. firm of Ernst & Young LLP and other members of the global Ernst &
Young organization.
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Contact:
Great Ink Communications - Tel: (212) 741-2977
Roxanne Donovan/Roberto Roman/Eric Gerard