Effects of Smart Energy Management Systems on Financial Performance in Economy Hotels

Abstract

Smart Energy Management Systems (SEMS) are innovative technologies designed to monitor and optimize energy consumption in real time, enabling businesses to reduce operational costs. In the hotel industry, SEMS play a vital role in improving energy efficiency, particularly in economy hotels where energy expenses constitute a significant portion of overall costs. This study, which employed a descriptive research design, aimed to evaluate the impact of SEMS on the financial performance of economy hotels in Nairobi City County, Kenya. The Balance Scorecard Model was employed to evaluate key financial aspects, including cost management and profitability, offering a comprehensive framework for assessment. Data were collected using Likert scale questionnaires from 24 hotel managers and 300 guests and analyzed using both descriptive and inferential statistics to provide a detailed understanding of SEMS's effects. Results revealed that the adoption of SEMS enables hotels to access real-time energy data, significantly improving energy efficiency by reducing unnecessary energy consumption and costs. Furthermore, regression analysis showed a moderate positive correlation (0.529) between SEMS adoption and financial performance, indicating that increased SEMS usage contributes to better financial outcomes. This suggests that SEMS not only help economy hotels optimize their energy consumption but also enhance overall operational efficiency and profitability. Based on these results, the study recommends that economy hotel managers adopt SEMS to enhance energy efficiency and reduce energy costs, thereby improving financial performance.