Rising global temperatures and sea-levels, unprecedented flooding around the globe, massive plastic garbage patches floating in the oceans, and historical crop failures: 2023 has made it evidently clear that we have to find new ways of doing business and living our lives. And the hotel industry continues to respond to this need in a number of ways.

From using new technologies to reduce their consumption, carbon footprint, and overhead to creating more sustainable guest experiences that cater to increasingly environmentally conscious consumers, hotel operators are re-inventing the industry. And measures that were once considered progressive or even gimmicky, are quickly becoming standard hotel management best practices.

Putting the “E” in ESG

One of the latest trends in the hotel industry (and many other sectors) is ESG – or “Environmental Social Governance”. Simply put, ESG involves adopting a “corporate strategy [that] focuses on the three pillars of the environment, social [inclusion], and [ethical] governance. This means taking measures to lower pollution, CO2 output, and reduce waste” (the environment), as well as committing to a diverse and inclusive workforce from the entry-level (social) all way to the management and board of directors (governance).

Insofar as the “E” in ESG refers to the environmental impacts of hotel operations, it involves monitoring the environmental footprint of a hotel property, and this will largely entail adopting more sustainable infrastructure technology, supply chains, and guest services. This can include adopting renewable sources of energy, implementing smart technology to reduce a property’s energy consumption, using more sustainable building materials, and better managing waste disposal and water usage. 

Of course, ESG is about more than just creating a more sustainable hotel operation. It also helps hotel operators qualify for advantageous financing products that they can use to reinvest in their properties’ sustainable infrastructure, as well as offers them the PR value of reaching ESG targets which attract new investors while also supporting marketing and occupancy goals.

Indeed, a 2021 study found that “81% of travelers surveyed said they plan to choose a sustainable accommodation option in the coming year,” and that the proportion of “green-minded travelers has risen consistently over the past 6.” And according to another study, “half of the travelers surveyed said it’s important to choose a hotel […] with a strong sustainability policy.”

Sustainable Hotel Management

The most direct way that hotels are implementing sustainable practices, reducing their carbon and waste footprint, reaching their ESG levels is at the operational level. After all, individual consumption patterns differ widely from guest-to-guest. So while guests can be offered more sustainable options, there’s no controlling how many showers they take, how they use in room climate control systems, or how much room service they order.

By tackling sustainability at the operational level, however, hotels can limit the environmental impact of even the most wasteful guests. More importantly, many of these sustainable operational practices also offer cost-savings that not only pay for their initial implementation, but increase overall hotel profitability, as well. In other words, there is a very strong business case for implementing sustainable hotel management practices.

Energy Management

As Forbes reports, “60-70% of [a hotel’s] utility costs are exclusively billed for electricity”. So energy consumption represents not only a significant cost-center for hotels, but also the greatest part of their carbon footprint.

Pie graph of U.S. Lodging Industry - Mix of Utility Expenses 2014

So by implementing smart energy management systems, a hotel can not only reach new levels of sustainability, it can also reduce operating costs in a way that increase GOPPAR and even increase the resale value of the property – all while offering an improved guest experience.

HVAC Energy Management Systems

Climate control is essential overhead for any hotel property. Whether it’s heating or air conditioning, every hotel property has a need for some kind of HVAC system. So to reduce their carbon footprint, many hotels are implementing IoT-enabled energy management systems that monitor and adjust energy consumption in real-time, improving HVAC systems performance and significantly reducing energy consumption.

Specifically, while occupancy sensors and smart thermostats monitor and respond to fluctuations in room occupancy, smart energy management systems like Verdant EI employ sophisticated machine learning algorithms to continuously analyze local weather patterns, historical thermodynamics, and peak demand loads to optimize energy consumption in real-time, all year round.

Smart Lighting

IoT energy management systems are also helping hotels reduce their lighting energy consumption. Just as HVAC systems use occupancy sensors and machine learning algorithms to optimize HVAC energy consumption, smart lighting systems similarly allow hotels to track occupancy patterns, set preferred lighting times, and improve overall lighting energy consumption.

Indeed, both of ​Verdant’s ZX​ and ​VX smart thermostats​ integrate with external third party lighting systems, turning lights on/off according to whether or not a room is occupied. This allows hotel operators to use the Verdant EI energy management system to optimize lighting energy consumption year-round, as well.

While some companies have reduced lighting energy consumption by up to 75% just by converting to a smart LED lighting system, the hotel industry has seen even greater results. For instance, when the Chatwal Hotel in New York City retrofitted approximately 1,300 lamps with smart lighting, it saved more than 410,000 annual kilowatt-hours, equating to a 90% reduction in lighting energy consumption. Indeed, the Chatwal Hotel saved around $124,255 in the first year alone, demonstrating that sustainable hotel operations make good business sense.

And the results have been equally impressive the world over. The Radisson Blu in Dubai Media City, for example, replaced 95% of its lights with LEDs in 2009, reducing its lighting energy consumption by 81%. And later in 2014, when the Grosvenor House Hotel in Dubai Marina replaced over 24,000 halogen lamps with smart LED lighting systems, it reduced energy consumption by about 80%, and recouped its investment in just 18 months.

Sustainable Amenities

Of course, energy consumption extends beyond implementing smart energy management systems. It also includes eliminating superfluous, energy consuming amenities, such as replacingthe mini-fridge and coffee machine in each room with a communal amenities area in an open guest space.”

Food Waste

There might be some truth to the adage that ‘you are what you eat’, but when it comes to our carbon footprint, it’s what we don’t eat that’s the problem. As the Washington Post reports:

According to the U.N. Food and Agriculture Organization, 30 percent of food is wasted globally across the supply chain, contributing 8 percent of total global greenhouse gas emissions. If food waste were a country, it would come in third after the United States and China in terms of impact on global warming.

And the hotel industry contributes significantly to global food waste. Indeed, it’s estimated that hotels produce 79,000 tons of food waste or 9% total food waste.

Consequently, the hospitality industry has started tackling food waste in a number of ways, including growing food onsite, sourcing food stocks locally, and taking measures to curb guests  ‘plate waste’. For example, sourcing “local produce and/or farm-to-table dining is becoming more popular as an effective way to reduce carbon footprint and offer travelers a unique opportunity to experience a greater connection to the locations they are visiting”.

Carbon Footprint Measurement

Of course, just as hotels are using IoT technology to monitor and track their energy consumption, they’ve also begun using similar technologies to measure their carbon footprint. As Gourmet Marketing explains:

23 global hotel organizations including Marriott and Hilton have been establishing a streamlined methodology – called Hotel Carbon Measurement Initiative – for measuring the carbon footprint of individual hotel locations. Over 15,000 hotels have already adopted this approach to reporting.

More travelers are looking to book stays with hotels that have green-friendly programs in place. If you don’t adopt a similar initiative, some of your prospects may pass you up for more transparent, environmentally-friendly options.

The Hospitality Sustainable Purchasing Consortium is another program that’s similar to the HCMI, and we may see similar initiatives being established moving forward.

Essentially, there are costs and benefits associated with implementing sustainable hotel management practices, and as with any other operational cost, hotels are actively measuring the impact of that investment. Not only does this allow them to achieve new cost efficiencies through the sustainability practices they implement, but it also allows them to measure their ESG score.

Water Management

Whether it’s for food/beverage service, guest room amenities, pools, landscaping, laundry, or sanitation, water is an essential resource for any hotel operation. And the hospitality consumes a significant amount of water. Indeed, according to the EPA, hotel water usage accounts for about 15% of all US commercial and institutional water use

It’s no surprise, then, that just as with energy management, many hotels have employed IoT-enabled technologies to conserve water. In fact, McGraw-Hill Construction estimates that implementing smart water management systems can reduce water consumption by 15%, energy use by 10%, and overall operating costs by 11%. In other words, by conserving water, hotels also reduce their carbon footprint because they use less energy to manage that water, producing additional operational cost-savings.

Of course, there are also the savings in actual water consumption. For instance, a single leaky toilet can cost as much as $840/year. Add the costs of any additional water damage, and it’s remarkable just how quickly that water consumption can lead to unnecessary costs. 

Consequently, some properties have taken smart water management a step further by installing showers systems that filter their own water. The result is that hotels are involving guests in reducing their water consumption, creating an overall more sustainable and rewarding guest experience.

Sustainable Guest Experiences

Of course, a hotel’s very raison d’etre is its guest, so many hotels have also started offering a more sustainable guest experience. From services to amenities, hotels are not only reducing the waste of their guests, but also marketing that experience to modern travelers (particularly millennials) who are more environmentally conscious.

Plastic Waste

The facts and figures around plastic pollution are frightening. Indeed, from 6 giant plastic garage patches across 3 oceans (including the Great Pacific Garbage Patch, which is about the size of Texas) to microplastics polluting the water we drink and the air we breath, our economy’s plastic addiction are having catastrophic effects on the environment and our health.

Many hotel brands, however, are proactively implementing a variety of plastic reduction strategies. The TUI Group, for instance, has even gone so far as to implement comprehensive plastic reduction guidelines for its properties. Some of the most common plastic reduction efforts include:

  • Eco Room Keys: The plastic key cards commonly used by hotels are made from a PVC-based plastic which requires a highly toxic manufacturing process. More sustainable options being adopted by hotels include card options made from paper, wood, and bioplastic which are equally durable.
  • Bottled Water Alternatives: Many hotels are also moving away from bottled water, opting instead for  “conveniently located filtered water dispensers, complimentary refillable bottles, and other options designed to offer guests convenient and palatable alternatives to water in plastic bottles.”
  • Plastic Straw Alternatives: One of the most common measures being implemented by international hotel groups is the phasing out of plastic straws. While some hotels are offering paper-based alternative, others offer reusable straws (sometimes branded), while others still are doing away with straws altogether.

Bath Amenities

Hotels are also revisiting the environmental impact of the complementary bath amenities they offer guests. Specifically, they are choosing to offer products that are more sustainably sourced and don’t include chemicals or additives deemed to be harmful to the environment or guest health. As LiveAbout reports:

Many hotels are making a statement by offering guests custom formulated amenities. Resort companies such as RockResorts have taken it one step further with an all-natural, essential oil-based custom formulated product made without preservatives and artificial ingredients that are packaged in recyclable containers. Other midrange hotel brands are experimenting with bulk dispenser presentations.

There has also been an increase in hotel developers revitalizing and repurposing old buildings such as “urban factories, warehouses, hospitals, office buildings, and schools.” Not only does this avoid the higher costs of a new construction, but it also reduces the environmental footprint of the development because fewer construction materials are required, and much less habitat is disturbed.

Spa Services

As with bath amenities, many hotels are also finding more sustainable ways of offering their spa services. By using products that feature local and indigenous ingredients, as well as natural and organic ingredients, hotels are able to offer treatments that do not have a smaller environmental impact, but also provide guests with a connection to the destination they are visiting.

Menu Selection

In addition to taking measure to reduce food waste, hotels are also moving to reduce the carbon footprint of the food they serve. Specifically, some hotels are sourcing more “organic produce, hormone-free meats and dairy, and other natural products that offer guests healthier food selections.”

Paperless Hotels

Of course, one of the easiest ways in which hotels are working toward being more sustainable is by going paperless. These measures, moreover, also contribute to a better guest experience:

The guest is the first beneficiary of a paperless environment. [These efforts] allow guests to check-in before they even arrive at the hotel, avoiding long queues and excessive paperwork and documentation at a time when they are just trying to get to their room.

The guest can even check in comfortably seated in the lobby, with the receptionist approaching their location with a tablet to carry out the procedure. All these benefits on arrival can be replicated on departure by paying with the credit card that has been integrated into the management tool. In addition, the guest will avoid having to carry numerous invoices with them throughout the trip if they attend to several hotels, receiving them conveniently in their e-mail.

[…]  Guest data is securely stored in the PMS, and [is] available upon a return visit to provide more personalized services such as food allergies, service preferences or room characteristics.

Sustainable Architecture and Construction

Finally, hotels operators are building sustainability directly into their properties’ core infrastructure. As the trivago Business Blog points out:

In building new properties, there is a “three-zero-concept” approach: using local construction materials and skills (zero kilometers), prioritizing energy management and lower emissions (zero carbon dioxide), and introducing life-cycle management into the building process (zero waste).

There has also been an increase in hotel developers are revitalizing and repurposing old buildings such as “urban factories, warehouses, hospitals, office buildings, and schools.” Not only does this avoid the higher costs of a new construction, but it also reduces the environmental footprint of the development because fewer construction materials are required, and much less habitat is disturbed.

The Sustainable Future of Hotel Management

Every industry undergoes changes and faces new challenges. But climate change and the environment are a set of challenges facing all of humanity. And the only way we will be successful is if we start rethinking the way we live our lives and the way we do business.

The hotel industry has been particularly proactive toward this end. From operations to guest experience to how properties are designed and constructed, hotels are implementing more sustainable practices across the board. Many of these measures, moreover, lead to cost-savings that not only cover implementation costs, but reduce overall overhead and increase profitability. In other words, there is a very strong business case for hotels to embrace sustainability and invest now in a cleaner environmental future.

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