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Hotel Environmental Sustainability Also Means Profit Sustainability
By Adam and Larry Mogelonsky
Thursday, 4th May 2023
 

With the new legislation put forward in Congress that’s aiming to ban gas stoves (citing both health and environmental concerns), it’s easy for many of us to get caught out in the sheer divisiveness of the news story and miss the overarching trend.

Sustainability and ESG (Environment, Social and Governance) are not only here to stay but, as this national policy demonstrates, leading governments and public authorities around the world are willing to take increasingly bolder actions in the existential fight against climate change.

But political parties being political parties – that is, focused on their own survival above all else – nothing like this comes out of left field. It’s preceded by mountains of polling and other population survey data which in this case suggest that global warming is now important enough to enough people to warrant pushing this agenda without the risk of alienating too many voters.

It’s a sign of the times and the travel industry is already well in the crosshairs for stricter guidelines regarding emissions and recycling programs. And just as voters are now signaling that they want more environmental action, travelers are likewise becoming highly cognizant of their carbon footprints. As highlighted in the latest report by the World Travel & Tourism Council and Trip.com Group, 69% of travelers surveyed are actively seeking sustainable travel options. Google even now has a dedicated search tool to help users find eco-friendly hotels.

This isn’t a novel concept to our industry either; Accor has its Planet 21 program and Marriott has Serve360, while major global inventory buyers are starting to mandate that hotels get in line – for example, Siemens’ Green Stay Initiative requiring all corporate stays to be with preferred hotel partners.

All told, this green revolution is no longer something any hotel organization can ignore, but that doesn’t mean you can’t add some green to your income statements in the process. From our experience working with owners and C-level executives, there are two key territories to help you focus your organization’s ESG efforts: those that are guest-facing and those that function behind the scenes.

Real Cost Savings Are Often Invisible to the Guest

Before you can get ahead of the curve, there are some obvious steps that every hotel can take to realize significant cost savings, reduce a property’s overall footprint and develop a roadmap for ongoing improvements. Most of the biggest efficiencies, though, will be realized in the back of house, requiring investments large and small in new capital assets and setting aside budget for future renovations.

Yes, we are talking about the usual suspects of water recycling systems, new energy-efficient laundry machines, low-wattage lighting and IoT thermostats that turn in-room climate controls when the room is unoccupied. While there’s an array of projects you can undertake, the first step is to start setting aside a portion of net operating incomes as a reserve fund. The green revolution isn’t slowing down and you must be financially nimble.

Concurrently, as strategic advisors, we would next recruit a specialist, screening for someone who understands the municipal, regional and national laws along with any additional credentials like being a LEED Green Associate. Not only would this individual help to identify the low-hanging fruit – in this case, the relatively low-cost projects with easy implementation – but they can also conduct a waste audit to assess any property’s total greenhouse gas emissions so that there’s a firm goalpost in mind for achieving 100% sustainability.

As they say, you can’t manage what you don’t measure, and this principle applies to any eco-conscious roadmap you develop. A critical part of this management, however, is not just aligning the finances and ordering new capital assets but ensuring that your ‘human capital’ isn’t overloaded. Your engineering team will undoubtedly have a hand in every single sustainability initiative, and unless you are building a new hotel you are dealing with a live product, meaning that on any given day there are urgent maintenance tasks and regular system checks that must be performed. Hence, any eco-friendly task scheduling must also be friendly to your engineers’ time in order to be realistic as well as not risk turnover in this department due to workplace stress.

Going Green to be Seen

No guest will ever see the shiny new water-efficient laundry equipment you install that will add thousands of dollars to your bottom line each year; nor will they care to read about these specific upgrades in a press release or in the fine print on your website. What they will see is a stamp of approval from a recognized authority like getting a B Corp Certification or working with an affiliate of the Global Sustainable Tourism Council.

While you may rightfully argue that the primary booking decision for most hotel guests is still one of location, price or brand amenities ahead of sustainability, we argue that any eco-friendly measures you take – as represented by being able to promote said certifications on every consumer channel – will afford your hotel sizeable marketing cachet to both appease this (currently niche) climatarian customer profile and also command higher rates in the process.

Besides the hard work to get some eco-approved logos attached to your brand, there are other ways to use sustainability to drive bookings. Think climate-conscious restaurant concepts as a ‘reason to visit’, incorporating biophilic design into the public spaces and guestrooms or going further like 1Hotels where sustainability reverberates through every aspect of the physical structure and operations.

Then, of course, once guests are onsite you visibility reinforce this belief system by going paperless in favor of apps or in-room tablets, eliminating all single-use plastics (dispensers versus bathroom amenities, for instance), installing more recycling bins to encourage guest waste reduction and looking at ways to reduce food waste by highlighting your food scrap composting or local food bank partnership.

Overall, the customer-facing enhancements you implement should fit a brand narrative that exudes compassion and renewability. For rural properties, for instance, the herb garden that guests walk past may not provide a tenth of the ingredients used in the restaurant, and yet it tells a great story. The same applies for having all meal components locally sourced to drastically curb food miles. The lesson here is that you can and should promote your sustainability efforts.

The Beginning Is the End of the Beginning

To double down on what was stated in the introduction so that it’s crystal clear, climate change policies are only going to get more and more draconian, thus requiring ongoing vigilance. All it will take is one or two symbolic (like footage of a polar bear wasting away on ever-thinning arctic ice) or catastrophic events (like the German towns in the Ahr Valley that were literally swept away overnight by flooding in the summer of 2021) to galvanize entire populations into more militant actions.

These proverbial bullets may come in the form of fines, steep carbon taxes for non-net-zero buildings or huge drains on your capex budgets as you are compelled to get caught up, so you must be consummately proactive. Sustainability will be front and center for at least the rest of the decade, but as we’ve shown there are ways to make this green revolution work in your favor so that you are driving cost savings while also pivoting to attract this new eco-conscious customer mindset.

Larry Mogelonsky, MBA, P. Eng. - Hotel Strategist, Industry Pundit, Veteran Marketer, and Public Speaker. Adam Mogelonsky, is the chief technologist of the company, Adam has a broad understanding of the complexities of the hotel tech stack as well as the vendors who are paving the way for increased labor efficiencies and new revenue growth opportunities.

Leveraging over 40 years working in hospitality, Hotel Mogel Consulting helps both hotel owners maximize property performance and technology vendors navigate the industry's entry barriers to realize financial success. Visit our contact page to start the conversation.

www.hotelmogel.com

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