Abstract: The existing vapour absorption system is compared with the vapour compression system designed with the detailed ASHRAE standard CLTD method along with software like e-solution. The pros and cons of the vapour compression system and vapour absorption system is compared in technical and financial reference. The research paper is based on the resort located in the hilly region projecting circumstances of modern rated star luxury facility. For calculated load of 60 TR, fuel consumption of boiler at different loading conditions is determined. Then actual and theoretical fuel consumptions are compared. For the analysis, existing VAS is replaced by the Variable Refrigerant Flow (VRF) system. Complete design of VRF system is performed separating the building in three zones: (a) upper two floor, (b) ground floor and (c) lobby. Energy consumption of VRF system is also calculated and compared with VAS. The research displays that load performance of VAS is poor and resort using VAS are losing large amount of fuel and associated financial resource at part load condition. When comparing VAS with VRF system, it is also found that large amount of money will be saved by replacement of VAS by VRF system with less payback period.