Friday, 5 Jun 2020

Startup uses wireless sensors to help hotels save on energy costs

As cash-strapped hotels gear up for a post-pandemic
recovery, one company is selling properties on an energy-efficiency
system that promises to save both money and the environment.  

Launched in late 2016, Singapore-based SensorFlow touts a
“smart building management solution” for hotels’ heating, ventilation and
air-conditioning (HVAC) systems, which can account for about 60% to 70% of a
building’s total energy expenses, according to SensorFlow CEO and cofounder
Saikrishnan Ranganathan.

“Looking at the hospitality space, we can clearly see that
energy consumption is one of their biggest problems,” said Ranganathan, adding
that next to labor costs, “it’s typically their No. 2 expense.”

SensorFlow’s technology features sensors, smart thermostats
and energy meters that work together to automate the HVAC in each guestroom,
detecting occupancy, decreasing A/C use when a room is vacant, controlling
humidity, measuring energy consumption and collecting data. 

Unlike other HVAC solutions on the market, including smart
thermostat systems from stalwarts such as Honeywell or Schneider, Ranganathan
claims that SensorFlow’s IOT (or Internet of Things) platform is completely
wireless and can be installed in a guestroom in under five minutes. The
SensorFlow system is powered by batteries that need changing every five years,
and the hardware and software connects to its own low-power, wide-area network,
which means it won’t interfere with or slow down a hotel’s existing WiFi.

“There are a lot of building automation systems, but some of
their tech is old school,” Ranganathan said. “They need wiring, which means
it’s tough to retrofit existing hotels.”

The technology also doesn’t rely on key card-activated power
switches, which have long been popular within the hospitality sector, despite
evolving consumer needs.

“The key card model was built long ago, before mobile
phones, laptops and whatnot,” Ranganathan said. “It just turns off the power
supply, so you can’t even charge your laptop while you’re at the pool or
something. No one likes it; they always ask the front desk for a second card.
Guests game that all the time.” 

Also setting SensorFlow apart from the competition is its
business model. The company doesn’t charge to install its technology in hotel
rooms, profiting instead from a portion of the property’s savings. Ranganathan
estimates that SensorFlow can save a hotel about 30% to 50% on HVAC costs, with
average savings ranging from $30,000 a year to up to $300,000 a year, depending
on property size. 

The company’s system is currently installed in about 10,000
rooms across 50 hotels in the Asia-Pacific region, including properties flagged
under Dorsett Hospitality, Hyatt and Accor brands.

“We have seen some other good wireless products out there,
but they’re still [capital expense]-based, meaning you have to pay a lot of
money up front,” Ranganathan said. “This model doesn’t really work for most
hotels, because they need that [capital expense] budget.”

Prior to the pandemic, SensorFlow would measure a hotel’s
savings over a four-month period, then take a fixed sum of that period’s
average as a monthly payment. In the wake of the coronavirus, however,
SensorFlow has thrown the four-month average out the window, instead taking a
70% cut of whatever a hotel’s savings happen to be each month.

The company’s new “floating” payment model has helped boost
SensorFlow’s profile in recent months, as hotels in some parts of the world
look to shave costs ahead of reopening.  

“Initially, there was a lot of panic,” Ranganathan said.
“But now a lot of hotels are preparing to recover, and we’re having
conversations with senior leaders at all the big global chains as well as all
the domestic chains, here in Asia. Reducing expenses is going to be a big
priority for them coming out of Covid-19.”

SensorFlow recently closed on an $8.3 million funding round
led by Openspace Ventures and Gaw Capital Partners, which builds on $2.7
million in funding the company raised last year. The investment will bolster
expansion plans, with SensorFlow set to enter the U.S. in the fourth quarter of
this year, focusing on markets such as New York, Las Vegas, Washington and Los
Angeles. Additionally, SensorFlow is making early inroads into Europe, with
pilot programs in that market set to go live next quarter.

Ranganathan said the company is targeting installation in a
million guestrooms by 2023.

“Hotels want to use this downtime effectively to renovate
and add systems like ours,” he added. “And when you do it through our sort of
business model, then there’s basically no risk.”

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