There are “going green” initiatives that make a company feel good when they’re touted—and then there are those goals that, when achieved, leave a long-lasting impact on the environment, customers and a hotel’s bottom line. The "Green to Gold: Sustainability as Profit" panel discussed the differences between the two—and how the latter can be achieved—on Oct. 30 at the Hospitality Show, held at the Henry B. Gonzalez Convention Center in San Antonio.
“Today, sustainability is not just a buzzword, it's a financial driver of both the top line and the bottom line,” said panel participant Ian Koehler, vice president of global marketing and customer experience for Guest Worldwide.
Fellow panelist Emilio Tenuta, senior vice president and chief sustainability officer at Ecolab, clarified that this statement is accurate…when companies act upon effective sustainability measures, rather than simply pay the phrase lip service.
“The industry has really started to take hold of this concept that sustainability for sustainability’s sake is not enough,” he said. “The days of doing ESG (environmental, social, governance) for ESG’s sake are over. We need to demonstrate that we're actually taking charge of how sustainability really drives profitability in the guest experience.”
The Green Mile
Panelist Anick Levesque, managing director of sustainability certification program Green Key Global, noted there were three operational sources that can derive value based on sustainability investments. One is operational cost savings. “Of course, if you lower your water use, you lower the energy use, you waste less food, you're going to save on your operating costs,” she explained.
Another source is the operational efficiencies that can be gained by acquiring, attracting and retaining talent. “This is the one that we don't often actually talk about,” Levesque continued. “More and more, we see that as people are entering the workforce, they're looking to align themselves with businesses that share their values as it pertains to sustainability.”
The final source is the increased bookings from both leisure and corporate travelers who want to align with hotel brands that have made a commitment to sustainability. “We absolutely see an increase in that demand,” Levesque added.
Panelist Joanna Abrams, founder and CEO of supply chain data and analytics company MindClick, has also witnessed that demand, particularly in relation to the eco-friendly materials, products and furnishings touted by a hotel.
“When we tell the story about how products that were selected for a guest room—which are the very same products that end up in our homes—we are supporting and helping the planet, we're then connecting directly with today's consumer,” she said. “Over 70 percent [of consumers] are saying, ‘we want to stay in hotels with a positive sustainability story.’”
MindClick’s research supports these figures. Studies carried out with Marriott have shown a 150 percent increase in guest satisfaction loyalty when sustainability is part of the hotel’s narrative. “When you tell that story…you’re connecting with the consumer in a way that shows you’re doing work for them,” Abrams continued. “You’re demonstrating your commitment to sustainability.”
Abrams further noted that the loyalty of corporate travelers may be on the line post-COVID, making these initiatives and narratives even more critical.
“There's still some softness in corporate travel, and the softness is on those single-night trips,” she added. “We all figured out how to work to varying degrees of effectiveness through Zoom…so we don't want to give the folks in the corporate travel buyer world that ability to say, ‘well, we just cut back on travel. We're going to help reduce our footprint.’ What effect is that going to have on our industry?”
With Abrams noting corporate travel represents 30 percent of hotel business, this demographic should not be overlooked.
Panel moderator Michael Morton, senior vice president of brand management and member services at BWH Hotels, added that Best Western Hotels is doing its part by adopting a resolution that all 4,300 global hotels will achieve certification from the Global Sustainability Tourism Council by 2026.
Koehler noted that Guest Worldwide was able to eliminate 2.3 million pounds of plastic by simply transitioning from minimum amenities (“hotel-sized” toiletries) to dispenser programs.
“That is a significant reduction,” he said. “It's 200 or 185 million small bottles going into hotel rooms. And from a bottom-line impact, there's real cost savings to those properties. Call it around 60 percent cost savings on average. If you're talking about a big-box property, that's tens of thousands of dollars that they can be saving every year throughout, straight to the final line.”
Regardless of the company-by-company green initiative, Tenuta advised that the onus was on the industry as a whole—and the operators as individual entities—to make the changes that create a positive impact on everyone.
“It's incumbent on us to make that connection to profitability and sustainability, to really make that business case,” he said. “Otherwise, I've seen it fall flat.”