Sector Highlights

Hotels are basic infrastructural facility needed for the tourism industry. The tourism sector of Nepal is recognized to be an important pillar of the countries' economy. Nepal's tourism industry earned US$ 330 million in 2010 and was one of the highest contributors of foreign exchange reserves. A total number of 789 hotels are providing 30,042 beds for hospitality.

Hotels use both electrical energy and thermal energy to provide services to its guests. Main energy sources of hotels are electricity, diesel and liquefied petroleum gas (LPG). Electricity is supplied to the hotels by Nepal Electricity Authority (NEA). However, due to increasing power outage most hotel have their own diesel-powered backup system for electricity. Diesel and LPG supplied through Nepal Oil Corporation (NOC) is the major source of thermal energy to the hotel industries of Nepal.

According to Hotel Association of Nepal (HAN) business in the hotel industry has grown by nearly 15% in the fiscal year 2009/10 as compared to previous years. The hotel industry is considered to have the highest local private sector investment in Nepal with a recorded investment of around Rs 100 billion. HAN has under its umbrella, 8 five-star, 3 four-star, 12 three-star, 22 two-star and 18 one-star hotels and 165 non-star, four allied and 33 resorts.

The numbers of star and non-star hotel have steadily increased during the last year (see table below). As per data from 2010 there are 103 star-rated and 686 non-star hotels providing a total number of 30,042 bed to Nepal's visitor.

Table 1: Scenario of Hotels and Hotel Beds (Economic Survey 2010/11)

Energy use

Main sources of energy used in the hotels in Nepal are electricity, diesel oil, LPG and rice husk in some of the hotels. Diesel oil and rice husk is used for generation of steam or hot water. LPG is used in the kitchen for cooking purposes and electricity is used mainly for operation of refrigeration & air conditioning system, lifts and lighting. Approximate share of electrical and thermal energy used in a typical star-rated hotel is presented below. One can see that electricity has with almost 60 % the highest share of energy consumption followed by Diesel (25 %) and LPG (12 %).

Figure : Energy use in a typical star-rated in Nepal (GIZ/NEEP, 2012)

Baseline study undertaken by NEEP/GIZ in 2011 for the hotel sector has found the specific energy consumption by hotel Industries as illustrated in the table below:

Table 2: Specific energy consumption of surveyed hotels in Nepal (GIZ/NEEP, 2012)


  • GIZ/NEEP, 2012: Baseline Study of Selected Sector Industries to assess the Potentials for more efficient use of energy.

Energy Saving Potential

The hotels sector stands on rank 6 among the most energy-intensive industrial sectors in Nepal. Hotels spend almost 8 % of their turnover for energy cost (GIZ/NEEP, 2012). Most hotels have switched from conventional lighting to more efficient CFL and about 10 % are already using most-efficient LED technology. However, 90% of surveyed hotels have neither checked the performance of major energy consuming equipment nor carried out energy audits in their hotels.

Figure 1: Energy cost on product value in % for different industrial sectors in Nepal (GIZ/NEEP, 2012).

GIZ/NEEP baseline survey (2012) estimated the electricity saving potential of Nepalese hotels to be about 30,000 MWh which is equivalent to the annual consumption of about 84,000 households in Nepal. On the thermal side Diesel consumption could be reduced by 200,000 Litre and LPG by 91,000 kg per year. In total Nepal's hotel sector could save about 360 Million NPR every year by implementing most common energy efficiency measures.

Figure 2: Monetary Saving Potential in Nepalese Hotel Sector (GIZ/NEEP, 2012)

Practical experiences show that many options are feasible and cost-effective. For example Annapurna Hotel in Kathmandu installed double glazing in 90 Deluxe category rooms which reduced drastically the sound pollution to the room occupants and at the same time heating and cooling load was reduced by 8-12%. After replacing the garden lighting of seven halogen lights with energy efficient LED and CFL technology they could also reduce energy cost by more than 1,00,000 NPR per year. All rooms of Annapurna are equipped with card-activated occupancy sensors which cut-off the power of all electrical appliances and lights two minutes after the guest has left the room; the saving in electricity was approximately 25–30%.

Experience from the past have identified many options for improving energy efficiency in hotels that are highly profitable, most of them with payback periods of investment of less than 1 year. The following table shows some implemented example options in Nepalese hotel sector with the respected payback (Danida/ESPS, 2005).

Table 1: Energy saving options in hotels and payback period (Danida/ESPS, 2005)

Renewable energy technologies can also help hotels to reduce energy cost: Since more than two years Hotel Barahi in Pokhara is running a biogas plant that converts all kitchen waste and sewage into cooking gas. The construction of the biogas plant cost only Rs 6,00,000 and can produce enough gas to power a stove for five to eight hours a day providing food for hotel guests and 100 staff. The installation of biogas plants for kitchen and sewage waste in Hotels has an average payback period of only six month (IFC, 2012). Solar thermal collectors are also appropriate for hotels for water heating as well as space heating. Good quality technology is available on the Nepalese market and cost effective with payback of investment between six to nine months. Even Solar PV Panels are applicable in Hotels. Annapurna hotel has installed nine highly efficient LED light panels of 28 Watts each which are powered by pure PV Solar system that can power the lights for three days.

Energy Saving Tips

The main areas to tap energy saving potentials in Hotels are lighting, housekeeping, boiler, hot-water and electrical systems as well as HVAC. The installation of renewable energy technologies might also considerably reduce energy cost in hotel operation.

Table 2: Recommended lighting levels for hotels

Figure 1: Comparison of different lighting technologies


  • Use of day lighting wherever is possible.
  • Lighting levels should be up to recommended standards
  • Replacement of inefficient incandescent light bulbs for CFL and consider switching to most-efficient LED lighting technology
  • Installation of occupancy sensors and/or timers for areas that are less frequently used such as hallways, outdoor areas, or public bathrooms
  • Optimization of Lighting System voltage


  • Install a key-activated Guest Room Energy Management System (GREMS) to control lighting, heating and cooling inside the rooms.
  • Improvement of fuel storage and handling system
  • Use of energy-efficient refrigerators and deep freezers
  • Sealing of windows to optimum tightness or replacement of single glazing through double glazing windows to reduce heat or cooling loss in air-conditioned rooms

Boiler and hot water system

  • Application of Combustion Gas Analyzer for combustion analysis and combustion tuning of boilers or hot air generators.
  • Installation/maintenance of Steam Traps
  • Optimization of Steam Distribution System (Steam Traps, Piping, Headers)
  • Insulation of Flanges and Valves with Insulation Jackets
  • Improvement of fuel storage and handling system Fuel Switching
  • Replacement of Traditional Boilers with Fluidized Bed Boiler
  • Installation of economizer for Waste Heat Recovery
  • Installation of Air Pre-Heater (APH) for Boiler
  • Installation of Auto Blow Down System in boiler

Electrical System

  • Optimization of capacitor banks for maintaining the Power Factor at optimum level
  • Replacement of Old (Rewind) motors with energy-efficient motors
  • Adoption of the Load Management System
  • Installation of Variable Frequency Drive (VFD) wherever applicable.
  • Load Optimization of Drive Systems (Shuffling of Drive System)
  • Optimization of Water Pump system

HVAC and compressed air system

  • Replace the Central-air conditioning system with Split Air Condition System
  • Replacement of traditional chiller with energy-efficient chillers
  • Improvement of compressed air system performance

Renewable energy for hotels

  • Installation of Biogas Plant operated by kitchen and sewage waste to biogas for cooking purpose
  • Consider PV-power lighting, particularly for outside
  • Installation of solar collectors for hot water provision


GIZ/NEEP, 2012: Baseline Study of Selected Sector Industries to assess the Potentials for more efficient use of energy.
Danida/ESPS, 2005: Cleaner Production report of hotel sector.
Central Bureau of Statistics (CBS), 2007: Census of Manufacturing Establishments carried out in the fiscal year 2006/07.
International Finance Corporation (IFC), 2012: Sustainable Energy Finance Market Study for Financial Sector in Nepal


EEC Factsheet: Energy Efficiency for Hotel Sector in Nepal - This fact-sheet summarizes energy saving potentials in Nepalese Hotel sector. It also give information on monetary savings by implementing energy audit and energy efficiency options in the industries. The fact-sheet is based on the findings of "Baseline Study of Selected Sector Industries to assess the Potentials for more Efficient use of Energy in Nepal" conducted by GIZ/NEEP Program in 2012.

Energy Manager Training India – Web portal for energy auditors in India established by Bureau of Energy Efficiency India and supported by Indo-German Energy Program (IGEN). The webpage contains comprehensive learning material for energy auditors, database of industrial processes and respective energy saving measures, equipment wise recommendations as well as a directory of energy efficiency professionals and technology suppliers from India. It further has an internal discussion forum and event announcement section.

Energy Manager Training India - Energy Conservation Measures for Hotel Industry Energy Manager Training is a web platform with knowledge base stablished by Bureau of Energy Efficiency (BEE) India and supported by Indo-German Energy Program (IGEN). This document provides a list of energy saving tips for hotels based on Indian experiences.

Energy Conservation Buildings Code (ECBC) User guide of the Indian Energy Conservation Building Code (2009) mainly relevant for commercial buildings.

BEE's Energy Management in your Hotel Hotels are large consumers of energy and fossil fuels to provide high quality services to guests. India's current growth potential for hotel construction will continue to result in an increasing energy consumption trend. The 'Guidebook for Managing Energy Use in Your Hotel' has been prepared by ICF International with financial support from Strategic Programme Fund, Low Carbon High Growth Programme of British High Commission in India.