Hilton EMEA: cost savings through market tracked risk strategies

With an open and transparent business style, our holistic approach extends from advice, negotiation and procurement to market intelligence, compliance and ongoing management.

Background

Consultus have been Hilton EMEA’s trusted partner in Energy Procurement for over 15 years, during which time the scope, scale and complexity of the interactions have developed. Through this successful relationship, Hilton Supply Management in Australia and New Zealand engaged Consultus to review and advise on opportunities relating to their existing procurement methods for Energy across the hotel portfolio.

 

Challenges

The hotels traditionally procured Energy in a non-centralised and disparate manner. The standard approach appeared to be engagement with 3rd parties who recommended best priced offers during a given renewal window which was set aside by the hotel stakeholder for the activity.

Consultus was challenged with:

  • Engaging with hotel stakeholders to justify why breaking existing habits was necessary
  • Improving costs
  • Centralising process, responsibility and reporting

 

Solution

Following a rigorous data gathering and scoping exercise, Consultus identified a number of areas of opportunity to improve overall spend across the territory, streamline processes to improve quality through standardisation and suggested changes to procurement methodologies which have driven significant value to each hotel from day one and has ensured an enduring cost improvement process. By deploying Consultus’ proprietary flexible strategies, which have been perfected and proven in many international commodity markets, methodical, protective strategies have been implement to extract the best result for the region in very difficult trading conditions on the Australasian energy markets.

 

Outcomes

By implementing the process changes, alternating fixed price contracts to flexibly risk managed contracts, consolidating reporting and responsibility centrally and applying renewal timing methodology through market tracked risk strategies, Consultus was able to demonstrate savings in excess of AUD$700k per annum across the Australian portfolio and over $60k per annum on 2 hotels in New Zealand, when compared to the standard previous process employed by the hotels.

Further, all stakeholders have had access to market intelligence expertise, a single consultant responsible for their account and ongoing market, cost and consumption reporting through the dedicated client portal. Further work includes the creation of Hilton consortia and buying clubs to ensure absolute best price and efficiencies of scale are gained by the hotels across the region.

The emphasis for sites going forward is focused on when to buy not just how to buy – as timing is the key to securing good prices.

 

An ethical approach

Consultus is a world-class consulting partner with global reach, trusted by clients for our open, ethical and transparent approach. An international group focused on providing advice, buying and management services in business energy and business water, for national utility markets and cross-border. Our end-to-end approach includes procurement, market intelligence, compliance and ongoing management. Every single day we are helping clients to reduce demand, save money, comply with environmental legislation and operate more profitably.

 

“Every single day we are helping clients to reduce demand, save money, comply with environmental legislation and operate more profitably.”

Consultus Group, Chief Technology Officer Ed Gray

 

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