In this day and age, no one can deny the importance of sustainability, be it in our daily lives or in business settings. According to the United Nations’ World Tourism Organization, sustainable tourism refers to having “a full awareness of the current and future impact of tourism in economic, social and environmental terms in order to satisfy the needs of visitors, industries, nature and host communities.” Ultimately, sustainability in the hotel industry is to align its systems and operations with the goals of the Paris Climate Agreement, established to keep global warming below 2°C and ideally 1.5°C.
As a matter of fact, hotels (and the wider tourism industry) and the environment have an interdependent relationship. Undeniably, hotels put increased pressure on the environment and are utilizing natural resources. However, the industry also relies on the same natural environment—unspoiled landscapes, sandy beaches, turquoise waters, coral reefs and fresh air—to serve as great tourist attractions. Therefore, sustainability is not a choice but rather a necessity, or we might harm the very basis on which hospitality is built.
As the concept of sustainability evolved over the past decade, hoteliers started to realize being sustainable does not necessarily mean extra burden, but rather a positive return on investment in both tangible and intangible terms. Sustainable management benefits hotels with lower operational costs, higher revenue and efficiency, as well as brand loyalty and employee retention.
Utility cost is usually the second largest cost for a hotel, after labor cost. Sustainable initiatives help boost profit margins via utility savings. The International Renewable Energy Agency estimated that sustainable buildings are at least 20 percent more resource efficient and thus generate lower utility costs. We often have a misconception of high capital expenditure and long payback periods to build a sustainable property, which was mostly true in the past. With continuous advancements in sustainable development and technologies, owners of sustainable buildings report their ROI improved 19.2 percent on average for existing building and 9.9 percent on average for new projects.
Sustainability also is crucial in the decision-making process for hotel guests and employees. According to the recent Booking.com Sustainable Travel Report, 83 percent of global travelers think sustainable travel is vital, with 61 percent saying the pandemic has made them want to travel more sustainably in the future. A recent hospitality trends study from Horwath HTL also found that post-pandemic, guests are even more cognizant of sustainability. They are now voting with their purchasing with 63 percent of guests accepting higher prices for ecologically certified hotels and restaurants.
Guests are also aware of and willing to pay more for meals in exchange for socially sustainable wages for service staff. Similarly, a survey by the Governance and Accountability Institute found that 40 percent of millennial respondents chose their employer because of their sustainability performance. And 70 percent of them are more likely to stay with a company with a strong environmental reputation and policies.
It is no surprise that most hotels, be they independent or branded properties, have implemented some kind of sustainability practices in view of the growing environmental concerns. The items to the right outline the key steps toward sustainability in hotels.
The number and variety of sustainable measures that can be adopted is extensive. The most crucial message here is hotels need to take a holistic approach, from design and development to daily operations, product and supplier choice, interaction with guests and staff, as well as the local community and the environment. The pandemic has heightened environmental awareness and as world tourism is recovering, it is high time for hotels to thoroughly understand the tangible and intangible benefits of sustainability and reflect on their sustainability initiatives. The positive impacts go beyond hotels; when guests are inspired and motivated, they will bring the sustainable practices home with them. As such, the ROI to the planet is beyond measure.
Enhance Energy and Water Efficiency
Popular methods in energy management and water conservation include energy and water tracking, switching to energy-efficient appliances and LED light bulbs, reducing water pressure in showers, using low-flow or dual-flush toilets, installing leak-detecting water systems and minimizing water use for laundry. The Plant for the Planet scheme by Accor is funded through half of the savings made on laundry costs when guests staying several nights choose to reuse their towels. Hilton also introduced a high-tech system called Connected Room that enables guests to personalize and control every aspect of their stay from their smartphones. As such, hotels can better manage energy usage when guests are not physically in their rooms such as by powering down the lights, televisions, heating and air conditioning.
With rising electricity costs worldwide and unreliable energy supply in some emerging countries, more hotels are looking for renewable energy sources. In addition to being cleaner, the cost study from the International Renewable Energy Agency demonstrates that most renewable energy sources are now cheaper than fossil fuels. By way of example, ITC Rajputana in India, a Leadership in Energy and Environmental Design Platinum-certified hotel, invested in an onsite rooftop solar project. The $100,000 project has a capacity of 100 kilowatt peak and significantly offsets the carbon emissions of the hotel. The annual savings is $25,000 and thus a four-year payback period. As installation costs and maintenance costs for renewable energy are reducing significantly, some renewable energy vendors even install for free and charge based on energy savings. For example, Soneva Fushi, located on a remote Maldives island in the Baa Atoll, used to rely solely on diesel generators for electricity. In 2016, it partnered with solar manufacturer Yingli to install a solar photovoltaic system for which Yingli provided the solar panels for free and only charged the resort 60 percent of the price it would cost it to produce with diesel generators.
Better Waste Management
Hotel operations used to produce a lot of unnecessary waste including paper (receipts, flyers, menus, daily reports), single-use plastics like straws and plastic water bottles, and food waste. An increasing number of hotels are going paperless using various technologies such as e-receipts, digital menus and digital guestroom tablets for promotions and in-room directories. In the “Asia Pacific Sustainability Trends 2021” study by Horwath HTL, nearly 50 percent of hotels in the region have eliminated single-use plastics. Over 80 percent of respondents have plans in place to eliminate single-use plastics in guestrooms, food and beverage facilities, other guest-facing facilities and back of house. Moreover, recycling also is an effective way to reduce waste. In Germany, a study found 45 percent of food waste in hospitality is generated by buffets. Thus, a way to reduce food waste is by changing to semi-buffet or a la carte ordering. Hotels should also actively monitor the causes of their food waste.
Choice of Products
Sourcing food from local and sustainable suppliers not only helps the local community, it also ensures the ingredients are fresher and less carbon is spent transporting them. Local produce and herbs are also crucial in creating authentic cuisines for guests. In terms of menu design, increasing plant-based offerings can help the environment and at the same time cater to the rising meat-free population. Eco-friendly products such as sustainable toiletries, organic cleaning products and linens are causing less harm to the environment and help enhance guests’ satisfaction.
Chelsea Wong is a consultant for Horwath HTL Asia Pacific.