Startup uses wireless sensors to help hotels save on energy costs

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SensorFlow cofounders Max Pagel (left) and Saikrishnan Ranganathan.
SensorFlow cofounders Max Pagel (left) and Saikrishnan Ranganathan.

As cash-strapped hotels gear up for a post-pandemic recovery, one company is selling properties on an energy-efficiency system that promises to save both money and the environment.  

Launched in late 2016, Singapore-based SensorFlow touts a “smart building management solution” for hotels’ heating, ventilation and air-conditioning (HVAC) systems, which can account for about 60% to 70% of a building’s total energy expenses, according to SensorFlow CEO and cofounder Saikrishnan Ranganathan.

“Looking at the hospitality space, we can clearly see that energy consumption is one of their biggest problems,” said Ranganathan, adding that next to labor costs, “it’s typically their No. 2 expense.”

SensorFlow’s technology features sensors, smart thermostats and energy meters that work together to automate the HVAC in each guestroom, detecting occupancy, decreasing A/C use when a room is vacant, controlling humidity, measuring energy consumption and collecting data. 

Unlike other HVAC solutions on the market, including smart thermostat systems from stalwarts such as Honeywell or Schneider, Ranganathan claims that SensorFlow’s IOT (or Internet of Things) platform is completely wireless and can be installed in a guestroom in under five minutes. The SensorFlow system is powered by batteries that need changing every five years, and the hardware and software connects to its own low-power, wide-area network, which means it won’t interfere with or slow down a hotel’s existing WiFi.

“There are a lot of building automation systems, but some of their tech is old school,” Ranganathan said. “They need wiring, which means it’s tough to retrofit existing hotels.”

The technology also doesn’t rely on key card-activated power switches, which have long been popular within the hospitality sector, despite evolving consumer needs.

“The key card model was built long ago, before mobile phones, laptops and whatnot,” Ranganathan said. “It just turns off the power supply, so you can’t even charge your laptop while you’re at the pool or something. No one likes it; they always ask the front desk for a second card. Guests game that all the time.” 

Also setting SensorFlow apart from the competition is its business model. The company doesn’t charge to install its technology in hotel rooms, profiting instead from a portion of the property’s savings. Ranganathan estimates that SensorFlow can save a hotel about 30% to 50% on HVAC costs, with average savings ranging from $30,000 a year to up to $300,000 a year, depending on property size. 

The company’s system is currently installed in about 10,000 rooms across 50 hotels in the Asia-Pacific region, including properties flagged under Dorsett Hospitality, Hyatt and Accor brands.

“We have seen some other good wireless products out there, but they’re still [capital expense]-based, meaning you have to pay a lot of money up front,” Ranganathan said. “This model doesn’t really work for most hotels, because they need that [capital expense] budget.”

Prior to the pandemic, SensorFlow would measure a hotel’s savings over a four-month period, then take a fixed sum of that period’s average as a monthly payment. In the wake of the coronavirus, however, SensorFlow has thrown the four-month average out the window, instead taking a 70% cut of whatever a hotel’s savings happen to be each month.

The company’s new “floating” payment model has helped boost SensorFlow’s profile in recent months, as hotels in some parts of the world look to shave costs ahead of reopening.  

“Initially, there was a lot of panic,” Ranganathan said. “But now a lot of hotels are preparing to recover, and we’re having conversations with senior leaders at all the big global chains as well as all the domestic chains, here in Asia. Reducing expenses is going to be a big priority for them coming out of Covid-19.”

SensorFlow recently closed on an $8.3 million funding round led by Openspace Ventures and Gaw Capital Partners, which builds on $2.7 million in funding the company raised last year. The investment will bolster expansion plans, with SensorFlow set to enter the U.S. in the fourth quarter of this year, focusing on markets such as New York, Las Vegas, Washington and Los Angeles. Additionally, SensorFlow is making early inroads into Europe, with pilot programs in that market set to go live next quarter.

Ranganathan said the company is targeting installation in a million guestrooms by 2023.

“Hotels want to use this downtime effectively to renovate and add systems like ours,” he added. “And when you do it through our sort of business model, then there’s basically no risk.”

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