Hotels eager to
satisfy the growing desire of business travellers for eco-friendly lodging are
finding that their environmental ambitions have run headlong into the harsh
realities of the recession.
When the economy was
thriving, developers were promoting environmental flourishes like roof gardens,
floors of reclaimed wood, and solar panels. When the Orchard Garden Hotel
opened in San Francisco in 2006, it featured furniture made from sustainably
Now, with reduced
operating budgets, hotel owners are putting off the kind of sweeping projects
that were common during the bull market and instead focusing on smaller
environmental initiatives that don’t cost as much and may even save money at
the same time.
that have long-term return on investment have definitely been put on the back
burner,” said Steve Faulstick, general manager of the Doubletree Hotel in
Portland, Oregon, and a board member of the Green Meeting Industry Council.
“We’d love to be completely green and sustainable, but we’re not going to do
that at the expense of laying people off.”
The lodging industry
is still working its way through a prolonged slump. Hotel occupancy rates have
recovered a bit from the trough of 2009, especially at business hotels in big
cities. But they remain depressed overall, and average occupancy for all domestic
hotels in the second quarter was 60.7 percent, compared with the 69.3 percent
the industry enjoyed in the third quarter of 2000, according to STR Global.
This makes it extraordinarily difficult for hotels to pay for big-ticket green
renovations, especially with a tight credit market.
sources of that financing, which are local and regional banks, are stressed by
their commercial real estate exposure,” said David Loeb, senior research
analyst at the investment firm Robert W. Baird & Co.
This curb on green
projects comes even as a growing number of corporations are reviewing a hotel’s
green credentials when they solicit bids for contracts. In a business climate
where trips and meetings are subject to greater scrutiny, companies are “really
trying to look like good corporate citizens,” said Nancy J. Wilson, principal
of MeetGreen, a company that plans events along eco-friendly guidelines.
company Cisco asks hotels about several areas of environmental awareness, like
recycling protocol, the use of eco-friendly housecleaning products and water
conservation. Those with programs addressing at least five categories are
identified on the company’s in-house travel booking tool with a green leaf
symbol, said Pam Honeycutt, Cisco’s travel manager for the Americas and Europe.
Evaluating a hotel’s
operational impact on the environment is difficult given the lack of an
industry standard, she said. “There’s not one definition of what a green hotel
would be,” she said. “They all get there by doing multiple things.”
To address this
demand without going into the red, hotels are looking at what Faulstick calls
“low-hanging fruit.” Lacking the capital to sink into big expensive retrofits,
hotels are turning to small-scale conservation programs that will satisfy
corporate buyers. As a bonus, many of these programs also reduce their energy
and water bills.
practices such as training staff to switch off lights and televisions,
encouraging guests to embrace less-frequent sheet and towel changes and
installing lower-cost fixtures like water-conserving showerheads and compact
fluorescent light bulbs. “Low-flow faucets and toilets can bring an immediate
savings of 10 to 20 percent,” Faulstick said.
Starwood Hotels &
Resorts is among those exploring ways to save both money and resources. At its
Element brand hotel in Lexington, Massachusetts, energy- and water-efficient
products like compact fluorescent light bulbs, Energy Star-rated appliances and
low-flow plumbing fixtures in guest rooms save the company about $52,000
annually, according to Brian McGuinness, a senior vice president at Starwood.
Since energy use is
the second-largest expense a hotel incurs after salary and benefit costs,
practices that reduce this are widely embraced. David Jerome, a corporate
responsibility executive with the InterContinental Hotels Group, says the
economic downturn accelerated the company’s green plans. One program intended
only as a pilot is being expanded to the InterContinental’s entire portfolio
because of the potential cost savings.
Hotels have had to
strike a balance, though. They need to simultaneously keep their green
initiatives unobtrusive so that guests don’t feel inconvenienced, but make them
visible enough to satisfy environmentally-conscious travelers.
Bjorn Hanson, dean of
the Tisch Center for Hospitality, Tourism and Sports Management at New York
University, said research shows that even guests who say they are
environmentally aware won’t pay more or accept inconvenience. If bottles of
shampoo, conditioner or other items are replaced with wall dispensers, guests
complain, he said.
Jerome said the
InterContinental is trying to focus on environmental steps that guests either
won’t notice or won’t mind. “We don’t want the guest to feel like it’s all up
to them,” he said. “We have to balance the guest experience versus the
International is using unobtrusive green elements in a pair of new properties
near Atlanta’s Hartsfield-Jackson airport. The properties, the SpringHill
Suites Atlanta Airport Gateway and the Atlanta Airport Marriott Gateway,
incorporate low-flow plumbing, water-conserving landscaping and
energy-efficient lighting, with an emphasis on natural light.