From the magazine AAHOA Lodging Business

February 2011 – Volume 10, Issue 2

The environmental benefits are numerous and as costs continue to decline, hoteliers may come to understand how LED lighting can benefit their bottom line. ALB explore the market…

Before upgrading or replacing certain equipment, hoteliers always have to carefully weigh the positive and negative risks associated with such decisions.

When it comes to an already large expense like hotel lighting, owners have to weigh the front-end investment costs versus the back-end return on investment.

LED (light emitting diode) lighting has become an attractive alternative to the compact fluorescent lighting and incandescent bulbs that have been the industry standard for years.

The LED is the most energy-efficient lighting solution currently available on the market. LED lights do not contain mercury or other toxins, are 300 percent more energy-efficient than compact fluorescent lighting and around 1,000 times more efficient than incandescent bulbs.

Gavin Cooper, vice president and partner with LED Source, argues the environmental impact from LED lighting is the biggest argument for switching.

“Less energy means less carbon emissions from power plants, plus the reduced load to the grid allows expansion without the need to build new power plants,” he said. “There is no mercury content in LEDs like fluorescent lights, which means it doesn’t find its way into our rivers and streams. Also, at the end of the LED’s life, the lamp is recyclable.”

The U.S. Department of Energy estimates rapid adoption of LED lighting in the United States over the next 20 years would reduce electricity demands from lighting by one-third, eliminate 258 million metric tons of carbon emissions, eliminate the construction of 40 power plants and create financial savings that could exceed $200 billion.

While many hotel brands concur with Cooper’s assessment of the environmental benefits of LED, the prohibitive costs of purchasing and installing the lighting has prevented hotels from completely turning to the technology.

“LED lighting is being used in public area decorative lighting more and more but is still not being used for task or way finding lighting due to the expense of these types of fixtures.” Dennis McCarty, vice president of technical services for InterContinental Hotels Group (IHG) Americas, said. “As the cost comes down, J believe we will find their use start to take hold in these areas.”

As part of its $1 billion global rebranding program, Holiday Inn in 2009 began to incorporate the GE Tetra LED lighting system into exterior signage on over 3,200 hotels. Holiday Inn estimates the brand will save 53 million on maintenance costs and $1.4 million on energy savings every year.

“The up-front cost is more than signage with neon, but the long-term benefits far outweigh the initial investment,” McCarty said. “Over the life of the signs, hotels will save on energy consumption and maintenance as the LED lighting has a very long life, minimizing the need for service every couple of years.”

Cooper said the goal for LED manufacturers is to produce products that “look and behave like the ones they are designed to replace.”

“Take a PAR 38 light bulb, for example, used in a lot of hotel lobbies as a spot or general illumination lamp,” Cooper said. “Most are 75 or 90 walls and last on average 2,000 hours. The LED replacement is just as bright, produces very little heat and consumes around 18 to 20 watts.”

Cooper also noted that after 50,000 hours, an LED light is only down to 70 percent of its original light output. “‘That life is extended if the lamps are dimmed at any point during the hours of operation.”

For hotels that are curious about switching, LED Source can send experts to the property to examine the entire lighting system and produce a specification for the new lamps or fixtures calculate the return on investment (ROI) and research any rebates that may be available from government, state or utility companies, which Cooper said would offset the initial cost and reduce the ROI.

Cooper estimated an ROI could occur anywhere from between six months and two years but noted the issue is really how much hoteliers want to save month-to-month or year-to-year.

“Hotels would be wise to upgrade anything that is used for more than six hours per day,” Cooper said. “This is where the best ROI will be seen. The only circumstances where it may not make financial sense is if they have low energy fluorescent lamps in the guest rooms.”

Cooper cautions that no matter what hoteliers decide, they should always seek expert advice. “There are lots of products out there and like most things, cheap is never better. But you can also over pay for a product or use the wrong product for the application.”

Hotel brands have adopted LED lighting at varying rates but consumers may notice them more and more in the near future.

About 50 percent of Carlson’s Country Inns & Suites that opened in 2009 and 2010 used LED lighting for their exterior signage, according to Jim Grimshaw, senior director of brand program development and standards for Carlson & Park Inn Americas.

Richard Bennett, vice president of design and supply for Best Western, said there has been “an uptick” in the appearance of LED at Best Western properties and guests really enjoy them.

“Anecdotally, we are finding that guests are tempted to steal the bulbs like they did in the early days of compact fluorescent (light bulbs] due to the high cost,” Bennett said. “Pricing needs to come down more before they become common in hotel rooms.”

“While the current costs per unit are higher with LED lighting, the return on energy costs clearly benefits the hotel,” Paul Davis, senior vice president of strategic sourcing for Wyndham Worldwide, said. “The challenge is to convince owners to invest now for a future benefit. As with any new technology, we’ll begin to see higher adoption rates of LED lighting by hotel owners as the initial costs start to come down.”