Climate Emergency and the Hospitality Industry

Beyond plastics, carbon pricing initiatives are in place or planned in more than 45 countries. The EU’s Energy Performance of Buildings Directive requires all new buildings to be nearly zero-energy (NZEB) by the end of 2020 and existing buildings to transition towards NZEB by 2050. Considering the current growth (with roughly 3000 energy-guzzling hotels joining the supply this year alone), how many of those new properties have joined the ranks of carbon-neutral hotels?

Hotel companies are, like any other businesses, trying to run as efficiently as possible. And any bigger, large-scale change, such as retrofitting a building to be more energy-efficient translates in directing capital away from shareholders’ short-term gains and growth plans and is thus may not be particularly popular. Additionally, structural changes often require the approval of multiple parties. In fact, the industry requires investors, developers, brands, architects and operators to act in unison when it comes down to developing or transforming our current supply towards carbon neutral properties.

The myriads of sustainability measures implemented over the past two decades are certainly good when assessed in isolation. But in fact, the sum of those measures is by far not enough to reach any climate goals of greenhouse gas (GHG) emissions reduction per room per year of 66% by 2030, and 90% by 2050 (see ITP, 2017). The argument here is that our industry cannot wait to start in 2030 to shape the hotel sector of 2050. The 90% reduction in emissions by 2050 needs actions today. And one action is to set bold, transparent and solid goals, and then to move on with your Plan-Do-Act-Check cycle.

What can we do Better and How?

In order to keep pace with international efforts to limit global mean temperature (below 2°C and to avoid a 1.5°C) as set by the Paris Agreement, our industry must consider a partial decarbonisation by 2030 and a close-to-complete decarbonisation by 2050. Since a large portion of our carbon emissions are linked to the way we design, develop, construct, refurbish, retrofit as well as heat, cool and ventilate our buildings; the larger picture involves our current supply of hotel properties (see below: existing properties) as well as the construction pipeline (see below: new properties). The topic is relatively complicated in the hotel world due to the many parties involved in creating the ‘hotel’ experience. This includes investors, owners, architects, designers, developers, brands, operators that may all be different entities.  To keep it simple, here are a few practical points to consider:

Existing hotel properties (independent owner-operator)

1. Gathering data & creating a Baseline: The owner and operator of an existing hotel property should have a clear understanding of the property in terms of energy usage. This is about assessing current performance which includes conducting an energy audit with some key performance indicators such as kilowatt-hours per square meter per year (kWh/m2/year), kWh per guest-night and kilograms (or tons) of Carbon Dioxide equivalent emissions per year (tCO2e). For smaller properties, online auditing tools are available to get a start. This can then be the baseline from which to measure progress.2.Benchmarking: Hotel owners and operators must continue monitoring performance monthly throughout the year to understand how energy data behave and fluctuate. Benchmarking between properties or within a similar segment or geographical location can facilitate decision making on where or what to improve. Here too, online benchmarking tools can help.
   
2. Assessment, operationalization & evaluation: Once a clear snapshot of the property’s energy performance has been made, decisions must be made about improvement potential along with return on investment calculations. Since three-quarters of energy consumed in hotels is used towards heating, cooling, ventilating, lighting and providing hot water, those are the areas to tackle. From low-hanging fruits with quick payback period such as installing lighting control systems or replacing lightbulbs to heat recovery systems, isolation improvement and boiler improvement, calculations on the investment required alongside the savings per year in terms of (1) Megawatt-hour, (2) tCO2e and (3) financial should be undertaken and priorities set for the next 5 to 10 years.
   
   
3. Consider Nearly Zero Energy Hotel (neZEH): The EU’s Energy Performance of Buildings Directive requires all new buildings to be nearly zero-energy (NZEB) by the end of 2020 and existing buildings to transition towards NZEB by 2050. There are many initiatives helping current hotels towards a transition to neZEH. This is the inevitable future, which needs planning today. In setting priorities and drafting a plan, the hotel owners and managers should consider both investments in energy efficiency and renewable energy towards reaching a positive energy balance.

 New hotel properties (hotel brands)

1. Since much of the construction pipeline (globally more than 3000 hotels opened their doors last year) involves the large hotel brands, when looking at new property development one critical aspect is the commitment of all partners in creating a carbon-neutral hotel industry. The operators of hotels are not necessarily well placed in influencing any decisions being made during the hotel development stages. As such, the key issue here is to foster better coordination between investors, developers, brands and operators so that sustainability has a chance to be enacted from the very first planning stages such as the initial feasibility. The Hotel for Owners of Tomorrow (HOT) is an example of how such coordination can take place.
   
   
2. Once the parties are at the table, then a carbon-neutral hotel or positive energy balance properties can be planned – they already exist and have made the case for a sound return on investment.
   
   

HospitalityNet World Panel on Sustainability

The idea behind the HospitalityNet World Panel on Sustainability is to gather leading experts and thought- leaders from around the world in the field of hospitality management to respond to controversial ideas or questions facing the hospitality industry. With this in mind, and due to the multiple environmental and societal challenges, invited experts represent various sectors including industry professionals, consultants, governmental and non-governmental experts, researchers and academics. Together, it is possible to explore ideas, solutions and strategies required by the hospitality industry in the 21^st century.

It is of particular importance to involve stakeholders, which are at the core of the many possible solutions in tackling the climate emergency in particular. Those stakeholders comprise investors, owners, developers, asset managers and consultants to the hospitality industry. The brands and hotel operators are often at the end of the pipeline in terms of environmental impact mitigation tactics. In principle, decisions made at the concept development and feasibility study stages are key to what will happen later during the operations. If a clear strategy is made for carbon neutrality, there and then -at the planning stages- the industry can lead the transformation required by society.

About the Author:  Dr Willy Legrand, Professor of Hospitality Management at the IUBH International University, Bad Honnef – Bonn

Prof. Legrand holds undergraduate and graduate courses on sustainable development and business management, sustainable hospitality and tourism in Germany but also as a visiting professor at universities in China, Dubai, France, India, Peru and the United States.

He is the lead author of Sustainability in the Hospitality Industry: Principles of Sustainable Operations, a leading textbook on sustainability principles, strategy and operations in hospitality now in its 3rd edition.

 Prof. Legrand will also be speaking at the International Hotel Investment & Design Club conference taking place on 7th November 2019 at the Andaz Hotel, Vienna.  He will be joining the panel discussion titled  ’Sustainability Matters - to green or not to green? Establishing the economic value of green initiatives in hotel investments.’