Hospitality Sector to Face INR 7,400 Crore Summer Energy Bill, AI Seen as Key Solution

As heatwaves intensify across India, the hospitality industry is bracing for an unprecedented rise in energy costs this summer.

A new study by Enlog, an AI-driven energy management company, estimates the sector’s electricity consumption could reach 9.35 billion units, a nearly 10 percent increase from last year.

As per the study, at an average tariff of INR 8 per unit, this translates to an energy bill of over INR 7,400 crore, significantly impacting operational margins for hotels, hostels, and paying guest (PG) accommodations.

The report further highlights sharp regional disparities, with Delhi witnessing the steepest spike in energy usage, up 25–30 percent, followed by Hyderabad (20–25 percent), Mumbai (15–20 percent), and Bangalore (10–15 percent). The rise is primarily driven by surging demand for air conditioners and coolers, which are already up by 25–30 percent compared to the same period last year.

India’s total electricity demand is expected to peak at 273 GW in June 2025.

“For the hospitality industry, energy volatility has become a structural challenge,” said Bharath Rnkawat, Founder of Enlog. “Hotels and PGs are under immense pressure to balance guest comfort with rising operational costs and sustainability expectations. AI-driven systems are no longer optional, they’re becoming essential tools for real-time efficiency and long-term resilience," said Rnkawat.

According to the study, a 30-room hotel in a metro can now expect monthly energy bills between INR 1.5–3 lakh, while 50-room properties may spend INR 2.5–5 lakh. Air conditioning, refrigeration, and water heating typically account for 60–70 percent of a hotel’s total power consumption. The additional burden of diesel generator usage can increase monthly costs by INR 50,000–1 lakh, depending on location and power reliability.

PG accommodations are also feeling the pressure, with average monthly electricity costs rising by INR 30,000–50,000 and additional diesel fuel expenses ranging from INR 10,000–20,000. Poor power quality often leads to frequent tenant complaints, deteriorating service standards, and increased turnover rates.

Enlog’s AI-powered energy optimisation solutions have proven effective in cutting electricity usage by 20–25 percent for mid-sized hotels, delivering savings of INR 30,000–50,000 per month. PG properties have seen average savings of 23 percent, or INR 10,000–15,000 monthly.

To date, Enlog has managed over 20,000 MWh of electricity across a client base of 1,580+ PGs and 200+ hotels, resulting in a reduction of nearly 4,000 tons of carbon emissions.

The platform offers real-time analytics to detect inefficiencies, optimise generator usage, and automate energy-saving measures, helping hospitality businesses lower costs, reduce emissions, and improve guest satisfaction.

As the nation confronts record-breaking summer temperatures, Enlog’s findings underscore the urgent need for smarter, tech-enabled energy strategies, particularly in high-consumption sectors like hospitality, data centers, and co-living spaces.