The hospitality industry is booming, setting records every month in various performance indicators, as I discovered while attending the recent International Hotel, Motel + Restaurant Show in New York.
It was heartening, in particular, to see multiple panels on sustainability as well as an entire “green” (literally green carpeted) section in the IHMRS expo with products clearly directed towards the eco conscious buyer.
These spanned a range of local, renewable, reusable goods, amenities and furnishings focused on health and wellness as well as energy as resource efficient building systems. All the products demonstrated that sustainability is beginning to resonate with the industry as well as suppliers.
On the other hand, the keynote panelists on the US Lodging Industry Summit observed that the industry is still only taking baby steps toward true sustainability, even as guests are demanding that the hospitality industry be more responsive to their health and wellness needs.
Here are a several key findings from the conference, and my take on how the industry is making progress – with room for growth – to incorporate sustainability into operations as well as the guest experience.
Green Expectations of Hotel Guests
As keynote speaker Steve Hood, SVP of research and founding director of SHARE, observed, “Sustainability is here to stay and grow. How it is going to express itself is going to evolve. What we need are more creative approaches.”
Growing consumer demand for health and wellness along with the expectation of personalized service through technology and big data is a significant trend that reflects this need for a creative approach to design and operations.
Guests expect transparency. They want to know the performance of the property, for their own needs and as an indication of the owners’ commitment to sustainability. Only then are guests willing to change their behaviors to play their part in sustainability.
Responding to guest demand, property performance has improved in the last few years. The latest industry lodging study shows that 45% of all hotels have allergen-free rooms, 93% have linen reuse programs and 64% have recycling programs.
Data is also playing a big part in changing the guest experience — from peer review sites that drive hotels’ popularity, to a mobile app experience that allows for interactions within the hotel space itself, including personalizing room choices, service add-ons and environmental factors such as lighting and thermal comfort. Trendy new brands such as Generator hostels and CitizenM hotels are saving space and materials in guest rooms, making them very efficient. They are investing in common community spaces such as lobbies and lounges to create more social congregation spaces while reducing resource usage and capital costs. By focusing on what’s most important to guests, the brands are able to make better use of their resources and enhance ROI.
What’s Driving LEED in Hotels?
Approximately 16% of hotels have achieved LEED certification in the last 12 months, in addition to their in-house sustainability programs and other product or service specific accreditations. Building code regulatory compliance as well as FEMA regulations are among the biggest drivers toward green certification.
The number of hotels pursuing certification, though, is actually dropping compared to those instituting their own green measures. Several speakers cited the lack of a hospitality specific certification program, ownership and management differences and reluctance to make large capital investments.
Also, as more hotels become LEED certified, owners and operators are looking for more brand specific differentiators for their properties.
To improve investor buy-in for sustainability in hospitality, it is important to learn how to value and measure the impact of even the smallest of changes to the status quo, like changing light bulbs. The Hotel Carbon Measurement Index (HCMI) was developed for and by hotel industry professionals to create a global benchmarking index for a common standard of reporting, corporate responsibility measures, carbon offsetting, and common travel index.
Over 21,000 hotel properties have already used this simple and transparent tool. But this is only the first step to improving individual performance with the ultimate goal of carbon neutral travel.
First LEED Platinum Hotels
It was enlightening to attend the panel of owners, representing the first three LEED Platinum certified hotels in the U.S. (moderated by Dina Belon, now director at Paladino) who described the process of achieving certification and its value to their properties.
Jim Treadway, general manager of Bardessono, said the biggest driver was the eco-consciousness of the ultra-luxury target market in Northern California. Large capital investments in this particular property ensured the capacity for highly efficient operations, which resulted in an accelerated ROI.
Dennis Quaintance, owner of Quaintance-Weaver Restaurants and Hotels, said that its Proximity Hotel – the first LEED Platinum hotel in the U.S. – was achieved almost by accident. In their project, the certification process served as a back check in helping to make sound business decisions that embodied their values in contributing to the community and respecting the environment.
Lynee Sauer, business manager of Woodbine group described the Skyler Hotel in Syracuse as the perfect opportunity to incorporate true sustainability by upcycling existing building stock and creating a unique experience.
Her takeaway from the process was that decisions should be based on the utility and value of any product rather than LEED points. From all three panelists, the consensus was clear that it is important to see sustainability as creating the most durable value rather than the certification itself.
Who’s Driving Industry Growth?
The BDNY Conference panels observed that 50% of the people in the world are under 30, and they comprise almost 70% of all leisure travelers. This group – the Millennials – are now the most important drivers of growth and change in travel. The characteristics of millennial travelers are that they want more value for their money, and a sense of community and belonging. This drives up interest in ecotourism, volunteering and community based hospitality rather than just heads on beds.
The Value of Sustainability in Hospitality
Takeways from the conference were clear. Sustainability needs to be holistic, authentic and transparent to promote sustainable behavior by hotel operators in order to enrich the guest experience as well as promote more environmentally friendly practices.
For investors, understanding the value of sustainability can make investment decisions common sense decisions rather than expensive add-ons.
Divya Natarajan is an associate consultant, LEED® AP ID+C at Paladino DC