In 2016, full deregulation of the Japanese electricity exchange sparked the rapid influx of more than 400 power producers and suppliers to the marketplace. While regional suppliers still dominate market share, Japanese consumers are confronted with countless options for energy sourcing. Choosing the right partner in power is further complicated by a fluctuating array of tax rates and discount initiatives based on variables such as consumption, volume and term lengths. Fees like fuel adjustment and renewable energy charges also play a part in pricing considerations, and to top it off, supplier contract terms are typically short-lived, leading to ongoing challenges for consumers.

Needless to say, securing reliable, cost-effective electricity has become a time-consuming challenge for property owners throughout Japan. Thankfully, HSM and the Asia-Pacific (APAC) engineering team set to work researching each target Japanese market to determine efficient, affordable strategies for our partnering APAC properties, reducing sourcing uncertainty for owners and generating savings around the full scope of energy resources. In partnership with chief engineers at each property, HSM leveraged our collective volume and spend to navigate a smooth sourcing process which included market metrics, supplier engagement, contracting and management of regulatory hurdles.

“Creating a competitive environment among new electricity suppliers during the infant stage of the deregulated market played a key role in generating favorable savings for our properties,” said Taka Kimura, senior manager for HSM’s Japan, Korea and Micronesia (JKM) region.

In fact, initial electricity sourcing efforts for Hilton Odawara resulted in a nearly 12.5% savings reduction, while subsequent energy sourcing efforts for six hotels in Kyushu and Okinawa yielded an average per property cost savings of 8.4%. HSM’s regional director of engineering now has an established sourcing and planning mechanism in place for future RFPs, and a predetermined portfolio of suppliers is available to prompt more competitive sourcing in key markets throughout Japan. Thanks to the dedication and diligence of the regional engineering team, our partners in Japan are spending less energy worrying about energy—and saving more toward their bottom line.

"We could not have been successful without the true cross-functional collaboration and partnership of the regional engineering team," acknowledged Tomo Ohi, HSM regional director for JKM.

Moving forward, our team continues to research each target market to evaluate potential new suppliers and perform ongoing cost comparisons. Plans are currently underway to conduct new negotiations for all partnering properties in an effort to secure additional customer savings. Hotels in Japan—or anywhere around the world—that would like to put HSM’s size, services, support and solutions to work for you are encouraged to contact us at HSMx@hilton.com or connect with your Strategic Accounts advisor for more information.