How will sustainability at your hotel benefit your business?
Photo by Soneva
The hospitality industry is no stranger to competition. A staple of the industry is the constant need to adapt and take on new ways to appeal to target markets and encourage returning guests, while optimizing efficiency. In order to adjust to changing consumer demands, managing directors look to trends for direction on how to grow their business.
Sustainability is currently the hottest trend in the hospitality and tourism industries, backed up by findings that 75% of Millennials and Gen Zers prefer sustainable businesses and are willing to pay more for it. Sustainability is here to stay. Not only will this future-proof your business, but also help you gain a competitive edge.
What can sustainability do for your hotel?
From our research, we discovered the biggest producers of CO2 in the hospitality industry by looking into the practices of three leading resorts in the world of sustainability: Soneva, Bucuti & Tara and Banyan Tree. The three hotels featured in this blog were strategically chosen to reflect how sustainability can be put into practice in tropical, year-round destinations that cater to the luxury market. This blog will take a deeper look into measuring operational and activity-based carbon emissions, best practices and the business potential that has been gained by these hotels as a result of making green transitions.
The biggest difficulty for hotels looking to use sustainability as a selling point is often where to begin. Taking a close look at stocklists and collecting data on your operations such as fuel and energy consumption, water usage and employee transportation is a basic, yet essential first step. This can further be broken down by scope, which will differ based on factors such as the size, geographical location and amenities of the hotel. This can be used later on to determine where to cut down the calculated footprint and where the liability-divide lies between businesses and guests’ environmental responsibility. Once calculated, data can be used as a baseline for footprint elimination and mitigation strategies based on the hotel’s desired milestones including CO2 neutrality and becoming plastic free.
If you’re a Hotel Manager, you’re probably wondering “this sounds great, but what can these milestones do for my hotel’s business prospects like guest bookings and increased name recognition?”. This is where your team’s creativity comes in. For example, the hotels represented in this case study used their environmental management practices for many different aspects of their business from PR campaigns to community outreach and guest engagement, which boosted their brand and made them a house-hold name.
The Benefit of Measuring Your Carbon Footprint
First, it is important to know that the most CO2-intensive impacts for the hospitality industry are overwhelmingly: energy, freight, land and air transport, water consumption and food and drinks, according to our research into the featured hotel’s sustainability reports and environmental impact assessments. The amount of CO2 produced from operations can vary depending on the scale of the hotel and the type of technologies used, the location of the target markets and where products are being sourced from. Understanding the impact that operations, such as using generators, are having on the local environment is another important aspect of measuring a hotel’s impact. Once the impacts are understood, then strategies can be put into place to generate the largest impact possible.
Although, in some cases, operations alone are dwarfed by the footprint that the guests themselves have. For example, in the sustainability report from Banyan Tree, it was cited that only 20% of carbon emissions came from resort operations alone; guests’ footprints become inflated when their transport to and from the destination is taken into account as air travel carries a heavy footprint. Luckily, guests are willing to take environmental responsibility and, in fact many of them prefer to, which is easily achieved by an environmental levy on their stay. Soneva to date has raised over 6.2 million USD as a part of their 2% environmental levy, which has funded many carbon mitigation projects in the surrounding rainforests and created 9 million USD worth of social value. Hotels that have an established environmental program, like Bucuti & Tara have seen consistent guest satisfaction reflected in their consistent 90%+ occupancy rate. Ingraining sustainability into the interactions that guests have with their accommodation will ensure they are not only conscious of your environmental awareness, but proud to support your business.
Investing in Sustainability
If you’re questioning, “how can I afford to invest in sustainability?”, the answer can come in many forms. Investments can come in the form of outsourcing an environmental impact assessment, buying solar panels, installing a water filtration system or switching over to reusable plastic alternatives, which could be financed by an environmental levy of 2%, for instance, in combination with a direct investment and/or government subsidies. Choosing long-term investments such as these can cut costs in the short term and lead to year on year savings on electricity, water and other costs.
Calculating your footprint to form a strategy is the conclusive first step to ensure that your baseline is accurate and strategies meet practical goals within plausible time-frames. While doing it on your own is possible, it is extremely time-consuming and likely to be inaccurate and if not verified by a specialist will make offsetting your footprint difficult down the road. Keeping in mind that sustainability is a long-term solution, with some quick and significant gains along the way, spending up front will quickly pay off with improved efficiency and increased interest in your hotel.
How Hotels Have Made Changes
Fortunately, making environmentally-friendly changes within the hospitality industry has never been easier. Sustainability has made its way into the tech world, inspiring many new innovative solutions to reduce operations that rely on energy, water usage and waste processing.
Water Innovation and Self-Sufficiency
Soneva pivoted away from traditional energy sources to a combination of using solar panels and a linear generator, which cut down diesel consumption by 10-15%, saving them up to 30% on their energy bill. In turn, excess heat from generators was used to desalinate water, a fundamental switch for a resort located in a remote area. Bucuti & Tara has been able, over the past three years, to reduce water consumption by 20% simply by installing water-saving faucets, fixtures, and expanding their grey water system. Where fresh water is scarce, such as in small island developing states or other remote locations, the commodity of fresh water is precious and a necessary step in becoming resilient in the face of a natural disaster or a shortage. Having desalination capabilities also provides cost-saving opportunities and can reduce plastic usage in operations.
Green Energy Savings
Choosing alternative energy sources including solar panels and strategizing how to cut down your reliance on diesel or “traditional” means of electricity can help cut energy usage by at least 5% per year as was done by Banyan Tree. The Bucuti & Tara resort produces 20% of their own electricity from solar panels and another 25% via wind energy not to mention a natural cooling system that was designed as a part of their environmental program. Having a natural cooling system built into your infrastructure can also cut down or eliminate the need for energy-intensive air-conditioning systems, especially for hotels located in warm climates where AC is normally required year-round. Producing your own energy and limiting energy-intensive operations is a great way to cut down your reliance on one of your most polluting aspects, while investing in green energy. In support of helping hotels and tourism operators switch to renewable energy, governments around the world are providing subsidies and tax incentives for the purchase of solar panels and other green energy technologies, which offset the initial costs needed to make the switch.
Circular Waste Processing and Art
Circularity (repurposing raw materials into something else) integrated into waste processing is an innovative way to create revenue-raising or saving supplies. Soneva was able to recycle 73% of waste, which generated 265,249 USD in cost savings. Parallel initiatives included turning all of their glass waste (12,000 bottles) into in-house art pieces for the resort and unique gifts for guests. Not only is this a visible way to show guests your sustainable waste processing and overall plastic reduction, but this also offers a local and interactive experience for guests by inviting community-based artisans to do live workshops and demonstrations. Offering these types of demonstrations can also indirectly expand your hotel’s exposure online by encouraging guests to share the experience on their own social media and use a location tag. Upcycled art can also be a great souvenir for guests to take home and remember their time at your hotel. In this way, their stay is more than just an accomodation, but also an experience.
CO2 Neutrality
CO2 neutrality is the holy grail for resorts in terms of sustainability milestones. Bucuti & Tara Resort in Aruba is one of the most famous examples of how reaching a sustainability milestone can boost your brand. The resort attained CO2 neutrality in 2018, making it one of the first in the world, and the first in the Caribbean (Certified CarbonNeutral®) to do so. Emissions are calculated and reduced operationally and the rest is offset via carbon credits issued by the Natural Capital Partners group to support local initiatives that promote community-building and projects to reduce greenhouse gasses. Hotels around the world who have reached CO2 neutrality have made headlines and have been featured by international press and publications bringing in new target markets.
The Payoff
Awards and Accolades: Setting Yourself Apart
As a result of becoming CO2 neutral, Bucuti & Tara has been recognized for various awards including: World Travel & Tourism Climate Action Award - winner 2019, National Energy Globe Winner - 2019, Encore Award and the Caribbean Hotel and Tourism Association 2019, not to mention the Hall of Fame Award for Best Practice for Environmental Sustainability. Receiving sustainability awards is more than just a badge for your website, it is a way for prospective guests to differentiate your hotel from your competitors. Awards such as these help your brand to reach a higher level of international recognition and therefore more website clicks and bookings, which leads to increased revenue. Now in 2020, 2 years after Bucuti & Tara became CO2 neutral, the hotels that have reached this milestone are far and few between, therefore achieving this goal will put you at the lead of the pack for years to come.
Environmental & Community Impact: Brand Elevation
Supporting projects that provide opportunities for the local community and the conservation of the surrounding environment is crucial for your brand when promoting the environment. This can be done in many ways including CO2 offsetting, starting an internal foundation or showcasing local heritage as a part of guests’ stay. Being able to quantify your impact through metrics or KPIs is an important PR tool to show past and prospective guests what you’ve already accomplished and what you’re working towards. Even better than statistics, is using visual examples, like Soneva, in your communications to quantify how many trees were planted as a part of your environmental program or how many local jobs were created by your strategy. Making human connections when communicating your impact can be a key part of your branding strategy.
Guest Engagement and Responsible Contributions
By involving guests in the process of integrating sustainability into your business, it can empower them by helping support the local community and biodiversity. This can be done directly, by having them take part in sustainable activities, for example Banyan Tree provided a diving experience to engage guests to take part in restoring surrounding corals. Offering a tour of the hotel grounds can also be a simple, yet effective way to show guests the sustainable operations that you have adopted. To support this, guest contributions via direct donations to your foundation or through an environmental levy can offset the costs associated with providing these activities not to mention supporting your future sustainability strategies and technologies. The short-term cost of sustainability therefore is greatly outweighed by the long-term impact of the initial investment, which as you’ve seen in this blog, quickly pays for itself.
*All figures mentioned in this blog were taken from each of the resorts’ sustainability reports and our interview with Bucuti & Tara’s CEO, Ewald Biemans.
Sustainability reports for Soneva and Banyan Tree .
Is your hotel looking to reach any of the milestones mentioned in this blog?