Helping you make the right decision for your hotel energy contract
Let us rewind a little. To before your contract has been set up, and you are looking at options. Our extensive market knowledge will help you make an informed decision.
Many suppliers and other ‘brokers’ will simply push you towards the longest energy contract possible. This could be as long as 5 years.
This means they don’t have to do any work for another 5 years! Our team at Perfect Clarity, are not what we would call work shy. Far from it.
So why wouldn’t we recommend a 5-year contract anyway? Several reasons. For a start, the market can change rapidly. Locking yourself into a legally binding contract for half a decade means you are unable to take advantage of any falls in wholesale prices.
And if you think gas and electricity only ever increase in price, this isn’t exactly true.
In January 2015, for example, gas prices fell off a cliff. This was caused by a similar fall in oil prices (gas prices loosely track oil prices) due to a massive excess of supply of oil.
We recommend hotels fix their energy contracts for no more than three years. This meant most of our customers were able to take advantage of lower gas prices. We are able to confirm gas contracts up to 24 months before they start.
The wholesale price of gas increased slowly over the next year. This meant the remaining hotels, whose gas contract didn’t end in the immediate two-year period, were able to take advantage of much lower gas prices over the following 12 months.
There have been many other instances as well.
Below we answer some more common questions about hotel energy contracts.
When should I shop around for my next hotel energy contract?
The golden rule is not to leave it until the last minute. And check the terms and conditions of your current energy contract. If you are a large hotel, you will be on the non-micro business terms. It depends on your energy supplier, but they may state you need to give notice 90 days before the end of the contract. Not the usual 30 days for a micro business.
Again, depending on the supplier and the terms you have agreed to, missing this deadline could mean you are committed to another 12 months at higher rates. You clearly want to avoid this at all costs.
Unsurprisingly, we don’t allow our clients to fall into this trap. We monitor energy prices and will contact you when they are looking favourable. This can be anytime during the last 12 months of your contract. Occasionally even earlier, but we appreciate not everyone is comfortable in committing more than 12 months ahead.
My hotel has a two rate meter. Will a single rate meter save money?
Not necessarily. The single rate unit price on your contract will be lower than the Day rate, However, the Night rate is usually so much lower than the single rate, it usually means the Day and Night meter is the best option.
This isn’t always the case, as it will depend on your particular electricity split. Please get in touch and we will happily crunch the numbers for you. We will (with your permission) contact your electricity supplier and ask them for the usage splits to give you an accurate recommendation.
And if there is a saving that warrants a change of meter, this will have implications for your electricity contract. Not to mention the meter itself, if it can’t be reprogrammed remotely. We can handle all this for you though.