Why Tourism Businesses Should Invest in Renewable Energy

Jun 6

The tourism and hospitality industry has increasingly grown interested in where their energy is being sourced from. Fluctuations in energy costs due to political, economic, environmental and social contexts have made the energy market volatile with impacts for business’ bottom line. The reliance on non-renewable energy sources has limited the industry’s resilience to external factors, making coastal and island-based tourism businesses particularly more vulnerable to climate challenges.

As an alternative, renewable energy, otherwise known as “green energy” is not only more sustainable, but also cost efficient and in-demand compared with non-renewable energy sources. As a result, wind, solar and other forms of renewable energy are being sought after by tourism operators and accommodation providers looking to diversify their energy sources and pivot towards environmentally-friendly forms of tourism.

The benefits are plentiful. The switch to renewables often pays for itself in savings, while yielding other countless benefits such as branding opportunities, which enables tourism businesses to set themselves apart from competitors.

Here are some reasons why tourism businesses should consider investments in renewable energy and other types of green energy projects such as environmental sustainability and urban planning.

Lowered Energy Costs

Lowered energy costs may be one of the biggest arguments for making an investment in sustainable energy sources, but there is a reason behind this logic: it simply works.

Fossil fuels, as opposed to renewable energy sources, are limited in supply and unpredictable in terms of price consistency. This makes it particularly difficult for resorts, hotels or chains, who could spend tens of thousands (or more) a month on energy costs when prices rise, causing a serious blow to the bottom line. Not only does this lead to large dips in quarterly earnings, a rise in energy costs often is reflected in the price that customers or tourists have to pay. Higher prices typically means the obvious: less business.

But luckily, unpredictable energy costs can be avoided by choosing renewable energy sources.

The other good news is that advancements in renewable energy technology and infrastructure have made sustainable energy practices increasingly more affordable, efficient and effective. Therefore, by choosing green energy sources, it will help your tourism business maintain lower costs, while allowing you to keep prices consistently lower. This makes customers happier too, since reduced spending on accommodations and tour packages correlates to spending being redirected towards purchasing additional goods and services.

Better Branding

Investing in green energy also presents the opportunity to distinguish your brand from competitors. Sustainability has taken center stage in the tourism industry, moving from being a niche to becoming an expectation especially among certain demographics like Millennials and Gen Zers. Millennials are more than twice as likely (between 75%-34%) than Baby Boomers to change their spending habits when there is a sustainable option involved. They are also willing to pay more money for services that are marketed as sustainable, forgoing brands that have an unsustainable reputation. The same trend rings true when choosing an accommodation or tour operator. By investing in renewable energy and promoting your sustainability efforts, you’ll be able to future proof your business and ensure that consumers continue to prefer your brand. In doing so, it’ll build customer loyalty and attract repeat visitors to your tourism business.

However, without the inclusion of a mission statement or transparency around green sustainability reporting, any tourism business, regardless of their sustainability efforts, would be at a disadvantage to their competitors. Communication is just as important as the act itself. Transparent, informative and truthful messaging about sustainability, your environmental performance and inclusion of renewable energy technology, will be the key to getting the most out of your investment.

Sea Going Green is a sustainable tourism consultancy that is focused on providing green energy strategies to hotels, resorts and tourism operators to lower operational costs, improve efficiency and enhance resilience. Interested? Schedule a discovery call with one of our experts.