Reducing Utility Costs in Your Food & Beverage Department

HVS conducts numerous walkthroughs of hotel F&B operations each year. In almost every full service property, we find opportunities to significantly decrease utility costs through a combination of operating enhancements and capital projects.
Kevin Goldstein

This article summarizes some of the more common F&B utility efficiency opportunities that we routinely identify and address at our clients’ properties.

Where to Start?

We think it is important to begin by understanding the relationship between ownership and management. For example, is the restaurant or banquet department operated by the hotel management company, leased to a third party, or joint ventured in some manner? Correspondingly, which party pays the utility bills, and who owns the cooking equipment?

It is important to ask these questions upfront to determine what is “fair game” for energy efficiency in the restaurant operation – acknowledging that in some cases opportunities that may appear attractive from a P&L perspective may be nonstarters if the restaurant operator is not on board.

On a related note, we routinely encounter leased F&B operations where utility costs are not allocated equitably between the parties. The simplest utility cost allocation can be made if the leased space is independently metered by the utilities themselves (e.g. the local electricity utility). However, this is oftentimes not the case. As such, we encourage both lessors and lessees to review the utility provisions of F&B leases carefully, including any sub-metering or condominium-type operating agreements.

Focus First On Simple, Low-Cost Strategies

We observe the same series of operating deficiencies in nearly every kitchen that we visit. Take a look at the list of opportunities below – odds are that you have at least a few of these which can be implemented immediately: 

Install or Replace Faucet Aerators. Cooking personnel have a tendency to remove faucet aerators to increase water flow rate. A faucet equipped with an aerator will usually flow at between 1.0 – 2.5 gallons per minute, whereas a faucet without an aerator will flow at 4.0 – 5.0 gallons per minute. When these faucets are left running, the dollars add up quickly. Operators should install aerators with higher flow rates appropriate for kitchen use (typically between 2.0 – 2.5 gallons per minute) and require cooking staff to leave them in place. The cost of installation is nominal (less than $100 for an entire kitchen) and these small devices can save a thousand dollars or more in annual water/sewer costs. 

Replace Older Pre-Rinse Nozzles. Replace older or failing pre-rinse nozzle with modern equivalents to reduce the flow rate from over 4.0 gallons per minute to approximately 2.0 gallons per minute. The cleaning capability is identical, and water consumption is cut in half.

Clean Dirty Refrigeration Condenser Coils. Let’s face it – kitchens get dirty. A lot of dirt and debris inevitably finds its way to refrigeration coils, which hinders operating efficiency and can reduce the service life of refrigeration equipment. The coils should be cleaned quarterly or more often as required. If the refrigeration equipment is new and still under warranty, soap and water can be used. If the equipment is older, there are several coil cleaners available (although be cautious that use of these products does not void any existing warranty). Clean coils can reduce electricity costs by up to a hundred dollars per refrigeration unit each year.

Maintain Walk-In Refrigeration Unit Doors. Walk-in doors are used frequently and eventually require some level of repair and maintenance. Gasket failures and broken auto-closers are common, and we are amazed at the number of door sweeps missing from the bottom of doors. If you can feel cold air escaping, it’s time for door repair and maintenance. This can usually be tackled in-house and can reduce electricity costs by hundreds of dollars per year per refrigeration unit. 

Active Control of Cooking Gas Levels. Take a stroll through your kitchen during non-cooking hours (i.e. overnight or in-between meal services) and try to count how many appliance burners are left on the medium or high setting without any cooking being undertaken. Gas costs can be reduced by up to several hundred dollars per year by simply turning down burners when cooking is not actively underway.

Reduce or Eliminate the Use of Water to Defrost Food. We regularly observe this activity, regardless of whether a policy is in place against it. With proper meal service planning, your F&B personnel will no longer need to place food in a bucket and run tap water over it for hours on end. If you happen to be based in an area with high water/sewer rates, this practice can be wasting up to a thousand dollars (or more) per year.

Don’t Let Your Guard Down Overnight. When the F&B staff departs for the evening and the cleaning team comes in, you may have a free-for-all on your hands and not even know it – every light switched on, faucets left running, and appliances going. If you don’t believe this, try taking a walk through your kitchen at 2:00 am in the morning and see for yourself what is occurring. We encourage operators to monitor your in-house or out-of-house cleaning personnel and take corrective actions as needed.  

Return on Investment (ROI) Opportunities

So you have encouraged your personnel to undertake some of the activities above and are probably enjoying a few thousand dollars in annualized savings. If you have an investment appetite for ROI projects and a willing restaurant operator, the following capital project opportunities are worth exploring.  

Lighting LED Retrofits. LED technology has advanced to the point where a large number of retrofits will cash flow in less than five years. In the kitchen itself, the economics of lamp retrofits for existing fluorescent fixtures seem to be improving on almost a month by month basis. When HVS undertakes these projects, we typically like to install new ballasts as well – to ensure lamp/ballast compatibility, as well as reduce the longer-term maintenance requirements for these fixtures. In the front of the house, there are usually aesthetically-appropriate LED equivalents for the majority of your incandescent and halogen lamps, and the payback on these projects is quite fast (less than two years).

Demand-Responsive Ventilation Conversions. On a case by case basis, we are supportive of the installation of demand-responsive ventilation systems, which modulate both kitchen exhaust and makeup air based on the level of cooking actively underway.  These systems work through the use of smoke and heat sensors in the kitchen hoods, which are sequenced to variable speed drives to increase or reduce the speed of fan motors. Where demand-responsive ventilation is not economically feasible, there still may be opportunities to reduce energy consumption via the installation of timers or simple on/off switches. 

Water-Cooled Ice Machine Retrofits. If your back of the house ice machines are cooled by domestic water and your property is located in an area with high water/sewer costs, you are probably unnecessarily spending thousands of dollars per year on ice production without even knowing it. Where there is a centralized HVAC plant at the hotel, it may be possible to connect ice generating equipment to the condenser loop for more cost-effective cooling capability. Alternatively, water-cooled ice equipment can be replaced with air-cooled equivalents, although this requires careful consideration of equipment placement because of potential space temperature and acoustic impacts. 

Older Generation Kitchen Equipment Replacement. While replacement of older generation equipment does not always have a viable stand-alone ROI, it will nevertheless reduce energy consumption. In addition, there are numerous financial incentives provided by local utilities to encourage the installation of energy-efficient appliances – which in some cases can offset a large portion of the capital expense. Operators should look for the Energy Star rating when sourcing new kitchen equipment. 

HVAC Equipment and Controls. There are oftentimes equipment retrofits available to reduce space conditioning and ventilation requirements associated with F&B spaces including restaurants, meeting rooms, and banquet halls.  These can range from simple control strategies to more capital-intensive HVAC equipment replacements. The ROI from these types of projects varies significantly based on existing equipment, space utilization, commodity rates, and the availability of financial incentives. 

Waste Management Strategies

Although waste disposal and recycling falls under the O&M expense category, we nevertheless routinely identify opportunities to reduce waste management costs by rebidding waste contracts in non-franchised markets or by incorporating recycling strategies to reduce garbage pull costs. 

There are also food waste digesters available for lease or purchase – these devices convert food waste into a liquid waste matter that can be discharged down the sanitary sewage line. In some circumstances, food digesters can provide a viable ROI – however, project economics vary widely based on local factors, and the regulatory framework surrounding these devices is not clearly defined in many municipalities.

How to Implement?

Operators can achieve many of the no-cost and low-cost strategies in-house. However, we have observed that there is a tendency for these initiatives to be started with good intentions but quickly fall by the wayside – attributable to staff turnover and a lack of buy-in from both staff and management. These types of utility conservation practices are most effective when there is a strong top-down approach in place that is led by the hotel executive team. 

For the more capital-intensive equipment retrofits, we encounter numerous well-intentioned projects that fail to save energy due to incorrect equipment specification, poor construction, and lack of proper commissioning. We therefore recommend independent engineering support to maximize project success – especially for those upgrades involving MEP or HVAC systems. 

On behalf of our clients, HVS has implemented many of the above projects and the resultant impact on utility costs has been highly favorable. If you are serious about reducing your utility costs, contact HVS Energy & Sustainability

Kevin A. Goldstein is the President of HVS Energy & Sustainability, a division of HVS that helps hotel owners and operators reduce utility costs through diligent facility management and informed, strategic investment into building equipment. HVS’ pioneering approach in this area is financially-driven, owner/investor-facing, and hospitality-specific. HVS also hosts the Hospitality Energy Benchmarking Platform which provides a comprehensive analytical resource to manage a property’s utility spend. Prior to joining HVS, Kevin was a development executive for a design/build firm where he led multidisciplinary teams responsible for feasibility, investment structuring, master planning, A&E design, entitlements and construction. Contact Kevin at: or +1 305 343-9004
Sonia E. Vasquez is an Analyst with HVS Energy & Sustainability. Sonia provides project administration and research support across a broad spectrum of utility efficiency projects. Sonia has a background in architecture, with a degree from Universidad Catolica, Nicaragua. She has expertise in both Interior Design and Project Management. Prior to joining HVS, Sonia worked at Richhwood as a design manager, where she oversaw the design and construction of a manufacturing facility. Contact: +1 786 521-8251


  1. This was very good and I sent it to several asset management clients.

Submit a Question or Comment