As both a hotelier and part of a household with an electric car, HotelAVE President and CEO Michelle Russo has a cross-sectional perspective on hotels with charging stations.
Her husband was the first person in Rhode Island to get an electric car, she said, and finding electric vehicle charging stations factors significantly when they drive for overnight trips.
“When we’re traveling to places that are more remote drive-to destinations not located in any major market, he absolutely has to figure out where is the closest charging station,” she said. “That is all part of the travel planning.”
The U.S. Energy Information Administration reported in September 2023 that the number of U.S. registered light-duty EVs on the road reached 2.13 million in 2021, up from fewer than 100,000 in 2012. The EIA also reported that in the second quarter of 2023, hybrid, plug-in hybrid and battery-electric vehicles accounted for 16% of light-duty vehicle sales in the U.S., an increase compared to previous years.
With the number of EV and plug-in hybrids growing, more guests will be in Russo’s shoes, figuring out where they stay based on whether their hotel has, or is close to, an EV charging station.
From Differentiation to an Expectation
Having an EV charging station will still make a hotel stand out, at least for now, said Rod Hurt, regional director of operations for Twenty Four Seven Hotels, which manages several hotels with EV charging stations.
His company did a survey while it was in the middle of determining budgets for fiscal year 2023, he said. Every hotel that didn’t have a charging station went through an exercise of finding the closest charging site to the property. Some were more than a mile away.
“For certain vehicles, that’s not a service enhancer for the customer that absolutely, positively needs to plug in,” he said, adding that’s increasingly true for hotels in California where there’s a state mandate requiring all new vehicles sold in the state to be electric or plug-in hybrid by 2035.
There was a time when hotels advertised air conditioning and TVs as a way to stand out among competitors, Russo said. WiFi is a more recent example.
Hilton recently announced it plans to introduce 20,000 Tesla charging stations across 2,000 hotels, she said. Similarly, Marriott recently partnered with an EV charging station provider for its hotels. The number of hotels with charging stations will grow significantly over the years.
“I think we’re at that inflection point now,” she said.
While having EV chargers won’t be the be-all, end-all answer to attracting guests, it will matter when comparing hotels that have them to those that don’t, said Robert Cole, founder and CEO of hotel marketing strategy and technology consultancy Rock Cheetah.
“I think the question is going to wind up being, if you don’t have them, how much are you just seeding that demand over to your competition who does?” he said.
Charging for Charging
Currently, HotelAVE looks at EV charging stations as a loss leader to attract guests, Russo said. Over time, it could move from a free amenity to a source of revenue. At certain properties, the cost to charge an EV could be bundled into another fee.
The Grand Hyatt Vail installed charging stations about three years ago, and they’re part of the valet service. It makes the decision process easier for guests with EVs, she said. It skips an extra step they otherwise would have to take, reducing the stress of planning their trip.
With hotel brands, the first step in incorporating a destination fee is making sure the retail value proposition of the fee is three to four times the amount of the fee, she said. If the fee is $30, the brands want guests to feel like they’re getting $90 to $120 in retail value if they take advantage of everything covered by the fee.
Having guests pay per charge would be based on actual electricity consumed, Cole said. There may be some experimentation with business models, such as guests paying for parking at an urban hotel where charging is included or it’s considered an add-on.
If the hotel bills the guest for charging instead of directly through the charging station, the hotel folio should provide some details, such as how many kilowatt-hours were consumed at what rate, he said.
The industry is able to charge guests with EVs for charging, Hurt said, but he’s not sure how long that will last, at least for some hotels. People would spend a few bucks per charge, and hotels would get it directly or through a revenue sharing plan with the charging station company, but guests may eventually come to associate charging their EVs with a hotel’s complimentary breakfast.
“I think we’re still there where we could charge, but I think that window is closing because I think it’s going to be a standalone amenity that customers expect,” he said.
Managing Charging Stations
At some point when the number of electric vehicles increases further, there may come a time when hotels with charging stations need to set up an EV reservation management system to make sure guests who need the stations can access them, Hurt said.
The complication arises when one guest plugs in their car to charge it, but the charging process takes significantly longer than it does to fill up a tank of gas. Guests may not stick around with their car while it charges, so they may not be back right away when the battery is fully charged and another guest needs to use the charger.
Though not applicable to every hotel situation, the Grand Hyatt Vail’s valet service has solved the problem. When guests park their EVs through the valet, the valets charge the EVs for the guests. Once an EV is fully charged, the valets move the vehicle to another parking spot, freeing up the charging station for another EV.
“That whole valet rotation was key to handling the demand and avoiding guest complaints,” Russo said.
Having fully charged EVs parked at charging stations presents a problem for hotels because it’s an obstacle to maximizing profitability, Cole said. The hotel owner spends however much to install a charger, and they want that margin opportunity.
Having a charger for every spot avoids the problem, but it’s not efficient if most of them go unused, he said. Hotels could come up with a reservation system — something that would be particularly useful in drive-to markets or along highways. The system would need to include a notification system to alert when a charger is available.
A reservation system would preclude people from driving up to use the charging stations without a hotel reservation, he said. Allowing that could add to a hotel’s revenue stream if there are enough available chargers, though. It’s just a matter of what business model the hoteliers choose.
Whatever the model, it’s likely there will need to be some human supervision to make sure things are running smoothly, Cole said. A hotel could set it up where guests use their phone or credit card to pay for the charge directly, but that doesn’t address what to do with the EV when it’s done.
“You don't want situations where people are popping their cars in there and just leave,” he said. “Somebody from the hotel next door pulls over, uses your charger and just leaves it there all nights and nobody else can use it.
“It’s bad not only for the customer but for the profitability of the hotel because they can’t charge it, and you don’t want to just charge one car overnight if you can charge per charger a dozen cars.”
It would likely require one person per shift using a software system to track the scheduling, he said. They would also need policies in plan to help make decisions about cars that need to be moved or, in certain cases, towed.