Ruby’s Inn Resort — Rinnai’s Largest Commercial Propane Project

Tankless water heater manufacturer Rinnai America Corp. and one of its dealers have completed Rinnai’s largest commercial project. And, most importantly, it is fueled by propane. The success of this project has led the customer to consider using Rinnai appliances in other applications, and has led other, similar businesses to add propane-fueled Rinnai appliances as well.

How large was the project? It involves a 19-building resort and 179 Rinnai appliances. The resort, Ruby’s Inn, includes three hotels, 700 rooms, three restaurants, an RV park, a campground, three swimming pools, and a laundry facility that does 19 tons of laundry per day.

Teams from Ruby’s Inn, Rinnai, and propane sales and service provider Blue Star Gas worked together to develop, install, and maintain a water heater system that meets the needs of such a facility. The new system provides greater capacity and reliability than the previous system. That, in turns, means a happy commercial customer that is better able to satisfy its customers and save money while doing so.

Ruby’s Inn is located in Bryce Canyon City, Utah, just outside the entrance to Bryce Canyon National Park. The city is home to only 195 permanent, year-round residents. But on any given day during the summer season, April through October, Bryce Canyon City hosts 4000 visitors.

Those visitors, including many who arrive all at once in tour groups, tested the limits of Ruby’s Inn’s previous water heater infrastructure. That infrastructure couldn’t handle so many guests showering at the same time. Plus, there was no redundancy system in place, so when one of the boilers would go down, it would take nearly an hour before it could recover. This led to complaints from hotel guests about hot water issues. These complaints also showed up in reviews on customer review websites such as Google Plus, TripAdvisor, and Yelp.

“We can have six tour buses check in at one time, so there can be a lot of demand for hot water for showers all at once,” said Ron Harris, health and safety manager at Ruby’s Inn. “I have been here 25 years and we’ve always had hot water trouble.

“We’ve had all kinds of boilers over the years,” Harris added. “When a boiler went down, we would go two hours without hot water. You can imagine how unhappy that made the guests. We were giving away $60,000 a year in discounts and refunds.”

Steve Rutherford, division manager with Blue Star Gas, knew of these problems and suggested that Rinnai may have a solution. He invited two representatives of Rinnai to the facility to meet with two managers of Ruby’s Inn.

As in the case of Ruby’s Inn, “headaches and higher utility bills” are what lead many commercial consumers of propane to decide it’s time to upgrade their equipment, explained Carlos Rodriguez, western U.S. energy business development manager with Rinnai. He was one of the two Rinnai reps who visited the facility.

“We ask dealers to uncover opportunities and then give us a call,” Rodriguez said. “Our commercial manager does a needs analysis; he calculates the load, designs a solution, and recommends products. For different sorts of commercial customers, we have designated teams — restaurants, hospitals, builders, new construction… We have a specialist in every field.”

In this case, the commercial manager was Brian Watts and the solution was a system of tankless water heaters. Watts was the other Rinnai rep to make that initial visit to Ruby’s Inn.

“What appealed to Ruby’s Inn were the features and benefits, the efficiency, and, what was most important to them, the reliability,” said Watts, senior commercial business manager/national account manager at Rinnai. “We provide that reliability through redundancy. Tankless water heaters offer built-in redundancy. That’s what Ruby’s Inn caught on to right away. When a boiler breaks down, you are 100% out of water. But if you have six to 10 tankless water heaters, when something happens to one unit, the others will still do the job. That’s why we are so successful in the hospitality industry. If you’re a commercial business — a hotel, a hospital, a restaurant — you have to have hot water or you can’t keep your doors open.”

The Ruby’s Inn managers they met with were Harris, health and safety manager, and general engineer Karl Munford.

“They presented their on-demand water heater,” said Harris. “It was not a normal sales pitch (which is something we see all the time, as you can imagine). Instead, they just showed us what they have and what they could do.

“Karl Munford and I decided to have them show what they can do,” Harris added. “They went through every building and put together a binder of engineering specs. They also explained that if the system was installed by an authorized dealer, they would warranty it and make sure it does what they said it would do.”

When a boiler went down last fall, Ruby’s Inn ordered a Rinnai rack system to replace it. This was still during the busy summer season, so the new system was put to the test. Four months later, after the system had passed this test, the operators of Ruby’s Inn decided to add new systems to other facilities. Rinnai put together a proposal for a complete, turnkey solution that includes everything from the initial design and engineering to customer service and tech support.

The solution to the challenges faced by Ruby’s Inn included 179 Rinnai appliances — 175 tankless water heaters, including 35 rack units, and four Demand Duos. (Rinnai’s Demand Duo is a hybrid water heating system that combines the best of tank and tankless technologies.)

“The old system was very inefficient,” said Michael Prayoonvech, PE, senior application engineering with Rinnai. “They had traditional boilers and storage plus some tank-style water heaters and a few small tankless heaters. When you rolled up the door to the boiler room, you would feel the heat right away. As an engineer, when you feel that heat, you know that system is inefficient. Their old system was only 60% to 70% efficient.

“Their old system was also undersized, which meant they had a lack of hot water,” he added. “That was their biggest complaint. In hospitality, that is one of the things you expect to have — hot water. The advantage we have with tankless is, if you size the system properly, you will not run out of hot water.

“Another advantage we have with tankless is tracking the load,” Prayoonvech said. “If a person wants hot water at 2 a.m., our heaters fire up just enough to provide what is needed at that time. With the older system, you don’t have that; you fire up a whole boiler to provide just that small amount of hot water. That is inefficient, and the savings there can be huge.”

“People know that storing water and heating it and reheating it is not efficient; it is more efficient to heat it only when you need it,” he added. “The tankless technology does not necessarily sell itself, but people do understand that there will be a savings there. If you are at 60% energy efficiency and I’m at 96%, you can cut your energy bill by 30% to 40%. The capital cost is higher up front, but look at what you will save over the year.”

While tankless water heaters were used to meet most of the facility’s needs, Demand Duos were used for the laundry facility. Rinnai’s Demand Duo features a tankless water heater connected to a storage tank.

“The Demand Duos, we put in the laundry,” Prayoonvech explained. “Ruby’s Inn went with that because they wanted the upfront storage and the current mechanical room was too small for 18 heaters. A commercial washer requires a lot of water upfront. It would take three to four tankless heaters to provide the amount of water upfront, at one time, that one Demand Duo can provide. In their laundry, Ruby’s was looking to fire up all their washers at one time. So they went with four Demand Duos instead of 18 heaters.”

The Rinnai appliances used in the Ruby’s Inn project are fueled by propane. The location is very remote, so natural gas is not an option. There is no natural gas line within 25 or 30 miles. The resort is fueled by two tanks, a 30,000-gal. tank and an 18,000-gal. tank.

“The only other option here is electricity, which is much more expensive than propane,” said Harris of Ruby’s Inn. “Natural gas isn’t even close to us. We’ve tried solar, but it is not an option for the kind of demand we have. We go through 425,000 gallons of propane per year.”

“This place could not exist without propane,” said Watts of Rinnai. “It is very remote. It is four hours from Salt Lake City and four hours from Las Vegas. In my opinion, without propane, it could not be as large or it would not exist.”

After Rinnai engineered the system, Blue Star Gas, a propane sales and service provider with 14 locations in five western states, installed it.

“Blue Star Gas has always been a full-service marketer,” said Jeff Stewart, president of Blue Star Gas. “We have always sold appliances. That has always been a big part of our offering.

“Blue Star did not have the gas load, but the size of the project made it worthwhile for us to do it,” Stewart added. “Ruby’s Inn provides a unique case study. The size and scope of the project made sense for us to participate in it. We are able to bring resources from other divisions to help with projects that are too big for one division.”

Rutherford of Blue Star Gas said, “We did it all in-house; there was no contracting. That is what Ruby’s Inn wanted. They knew I would be here in the long run, because I am here all the time maintaining the gas system. That is a big deal when you are this far from everything.”

Once installed, the system provided a tangible sign that energy was being saved. “It can get as much as 40 degrees below freezing here during the winter,” said Harris of Ruby’s Inn. “Employees used to hang around in the boiler building because it was warm. The new system doesn’t lose heat like that, so now we have to add heat to that building.”

Rinnai’s commercial team projects that Ruby’s Inn will save $6000 per month on propane alone due to the energy efficiency of the new system. That total doesn’t include the savings in many other forms.

“That ROI includes only the dollars saved on fuel; it doesn’t include the money they would have lost replacing units that failed, inspecting old equipment, resolving customer complaints, or getting bad reviews on social media,” said Rodriguez of Rinnai. “With the new system, they have a system with 30% better thermal efficiency, the maintenance crews have more time to do other things, and they have no customer complaints. For Ruby’s Inn, it was a significant investment, but the returns are better than any bank would give.”

Ruby’s Inn reports that, since the installation of the Rinnai hot water system, it has experienced no lack of hot water and no customer complaints. For those who maintain the facility, the new system’s reliability has freed up time and money that can be better spent elsewhere.

“With the old system, we spent three or four hours a day just checking the boilers,” said Karl Munford, general engineer at Ruby’s Inn. “Now, it takes only 20 minutes a day to check that everything is working. That frees our people up to do other maintenance around the hotel; I always have other projects for them to do.

“The redundancy in the new system is the key thing for me,” he added. “It used to be that when a boiler went down, I had to call two or three people and tell them to come in right now, no matter what time of the day or night it was. Now, I don’t have to pay someone to come in at night. There is no pressure to do it right now, so we can do it when it is convenient.

“To turn it on and know it is going to work every time — that is a good feeling,” Munford concluded. “Every one of the new units has worked the first time. You flip the switch and you get hot water. Before, with the old boilers, you would hope it fires up and then you would wait 20 minutes to get hot water. This new system is so much different than what we were used to. It is so much easier and so much more gratifying.”

“We offer propane marketers a total turnkey solution,” said Watts of Rinnai. “In this case, it was Blue Star Gas that brought the project to us. We provided that ROI information for them. We show people what they can save by going to our product. The big thing is going out and finding them. We can provide solutions that will pay for themselves. We walk you through the entire process, from selling the project, to designing it, to installing it. There are huge opportunities out there. If you stir them up, we’ll be there and we’ll all win.”

Rodriguez of Rinnai said, “This project is the single largest commercial project in Rinnai history and it was propane.” He added that because of the success of this project, Rinnai soon closed a sale to another nearby motel too. And just as commercial customers learn from the experiences of other businesses similar to their own, residential customers learn about tankless water heaters from new construction and renovations.

“If you sell one, you sell the block,” Rodriguez said. “Plus, having that one gas appliance there opens up other opportunities for other burner tips.”

For propane marketers, too, Ruby’s Inn provides a case study that can help the industry sell appliances.

“As I say to anybody who will listen, our industry must focus on building burner tips and spark plugs to build gas load,” said Stewart of Blue Star Gas. “We must sell appliances and engines ourselves, directly to the customer, to build our industry. Just delivering gas is a shortsighted approach to building the business.

“New appliances are more efficient in terms of gas consumption, but that is part of the business today,” Stewart added. “We have seen a 30% reduction in residential per capita consumption in the last 10 years. To offset that as an industry, we have to be part of the solution. We have to sell more efficient appliances. Consumers are going to obtain more efficient appliances; the question is whether a marketer wishes to be part of that conversation and preserve gas load, or be left out and be eliminated.

“We have to be looking for opportunities every day,” Stewart concluded. “Projects like the Ruby’s Inn one are everywhere. They may not be as large, they may not be home runs, but you win the game with base hits and doubles. There are hundreds and hundreds of opportunities among our existing customer base. Hotels, restaurants, laundry facilities, health clubs… These opportunities are everywhere.”

Rutherford of Blue Star Gas said, “Propane customers know we are progressing with the times. We need to move forward with new technologies. For marketers, this is an avenue to help your customers and expand your customer base.

“In the long run, you are taking care of your customers by passing along information about ways they can save money,” he added. “When they replace aging equipment and reduce their energy costs, they have more capital money they can spend to grow. At the end of the day, it’s about your customers. You have to keep their interests in mind. If you take care of them, they will take care of you. It’s all about the relationship with the customer.

“We are seeing a big influx of commercial business,” Rutherford concluded. “The Ruby’s Inn project has been a testament to all kinds of businesses in the hospitality industry.”

Both Rinnai America Corp. and the Propane Education & Research Council (PERC) have produced videos about the Ruby’s Inn project.

The Rinnai video is at youtube.com/watch?v=ziMCIH0_jzM.

The PERC video is at youtube.com/watch?v=ixWHdEeFK40. —Steve Relyea