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Energy Consumption in South African Hotels: A Panel Data Analysis

9 June 2017
Publication Type: Working Paper
JEL Code: Q01, Q41, Q56

Addressing the large energy consumption of hotels requires an understanding of the factors that drive this consumption. This enquiry is crucial for South Africa which has experienced significant strain in meeting its domestic energy demand. This has occurred alongside increases in international tourists, adding to the pressure on already strained resources. This paper tests hypotheses on drivers of energy consumption in hotels using a novel panel dataset which presents daily consumption data for 22 hotels across South Africa. Findings from various specifications of the Dynamic Random Effects Model suggest that the number of rooms in a hotel, the services and facilities offered, and climatic conditions are strong drivers of consumption. While the role of occupancy could not be robustly ascertained due to severe data limitations, findings indicate that price regulation plays a significant role in curtailing electricity consumption, even in high-end hotels. Results further suggest that in the design of guidelines for energy efficiency in South African hotels, the energy consumption of the facilities and services offered should be the first point of call, and the strenuous impact of extreme weather conditions on energy consumption needs to be factored in at the phase of building design and construction.

Series title: Working paper 685
1 June 2017
Journal: Energy and Buildings 156 (2017) 207-217
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