The United Nations Charter The Millennium Declaration identified various principles for sustainable development. These included three key principles of economic development, social development and environmental protection.
Although there is not a specific definition for a sustainable hotel, we believe that hotels that achieve the bottom line of the above-mentioned three elements should be called a sustainable hotel.
Over the past few years individual hotels and chains have taken the first steps towards greening the accommodation industry. Therefore, incorporating environmental requirements into the overall business goals is seen to be the right thing to do from a business and sustainability perspective. However, in terms of the three key principles identified by the UN, economic development is well addressed. The focus is how to ensure a hotel’s, environmental and social investments are truly sustainable. By ensuring these closely linked investments that draw a high cost, gain not only moral, but actual economic return.
How does a hotel achieve its sustainable goal with economic rewards?
True sustainability means effectively managing all areas that contribute to the whole sustainability equation. Hotels are continually improving their contribution to the key elements of economic, social and some areas of the environment. Hotels to an extent hold considerable control over their impact economically and socially but this is the case in only certain areas of the environment. For example energy usage, supply chain management, internal policies, processes and systems.
For sustainability in the context of the environment the real challenge is reduce the environmental impacts they cannot control only influence – a key impact here is that of customer choice. Choice in terms of hotel selection, buying decisions and guest stay behaviour. It is here that carbon management is the hotels best ally and I will now go on to explain why.
According to the research conducted by Cornell University, the eco-certificate in isolation does not help hotels to increase bookings from the average customer only the few already converted green customers. The average customer needs more to compel them to buy from you and adopt green behaviours. This compulsion comes by combining economic reward with environmental initiatives. Without reward the eco-certificate, will provide some qualitative business benefits but far less quantifiable ones and, predominantly, those associated with doing the right thing. Most current business practices cannot connect green efforts to economic growth (increased business), only the reduction of cost. This makes going green a weak marketing tool.
What is required is a platform to connect the environmental and social efforts to economic benefits. Something like a Carbon Club that brings together hotels customers and provides the choices and information that will compel customers to choose particular hotels, and adopt green behaviours. Existing loyalty programs could then be the vehicle to offer economic reward for green choices, and I will explain this in more detail later.
Why start with carbon?
It can be measured to an international standard, therefore managed effectively. The carbon footprint provides an all encompassing benchmark that incorporates and measures all other environmental impacts, such as water, energy, air quality. Carbon management is the core of environmental management. It is the only impact that can be traded, through carbon credits and its management has a global impact.
Whether you believe carbon emissions enhance climate change and global warming, the fact is they have impacts on all three of the key elements – economic, social and environmental. It is something everyone can relate to and understand provided the information is given in the correct manner.
For example if I say in Australia for the accommodation industry the average carbon emission is about 8kgCO2e per guest night, according to carbon zero’s online calculator. For the average person, and potential customer, what does this mean and would they even take an interest. However, if you say this equals 106km of carbon emissions from driving a standard car, they would get it, relate to it and I would suggest take notice. This is compelling information.
You now have their attention. It is what you offer next that will compel a buying choice. So now, you could offset this, their impact for them (carbon credits) plus offer economic reward for choosing your hotel. Offer further rewards for adopting green behaviours (maybe for the first time) and you have begun converting the average customer into a green customer for life and maybe your customer for life and at the same time, increasing the bottom line. Economic, social, and environmental development achieved!
Carbon management supports hoteliers achieving sustainability and increasing profitability simply and easily. This is because compared to other environmental themes, such as energy, water, waste and biodiversity, carbon emission reductions are the only tradable commodities existing in the market now. In Europe and California, and even in China, carbon emission reductions, also known as carbon credits, are tradable in the market.
This trading to offset carbon emissions supports social and economic development at local and international levels. More and more hotels are involved in local communities’ events, from providing venues to participating in the events. Environmental protection is a good way to show the local and business community that the hotel does care for the local environment. This could start by providing carbon neutral event venues (offset through carbon credits) or launching tree-planting projects. Meanwhile, at the international level, hotels can buy carbon credits from developing countries to offset their carbon emissions. These will contribute to social and economic developments in those countries.
Imagine being able to trade carbon credits within your own chain. For example a hotel from your chain in a developing country, say China, through their carbon project, reduces its emissions and generates carbon credits. These are then traded with hotels within the chain in the developed world. They can be used to offset guest stays, offer carbon neutral events, even to become a carbon neutral hotel. Let’s not forget the impact it will have corporate social responsibility objectives. If you are not part of an international chain hotels in developed countries could ‘twin’ with hotels in developing countries! What a great story to share.
Why carbon? It is the common denominator.
• Energy: one of main carbon emission sources is fossil fuel combustion, especially for the purpose of power generation. It is worth noting that, for accommodation industry, energy consumption weights about 50 per cent or even more of operational costs. Meanwhile, natural gas used in kitchens contributes to the hotel’s direct emissions. Managing energy-related carbon emissions will help hoteliers reduce costs.
• Water: Water supply and wastewater treatment will consume energy and, moreover, the wastewater will release methane that is one of the main greenhouse gases. Carbon management leads to the reduction of wastewater generation and water consumption at the hotel.
• Air quality: Indoor air quality is one of the most important factors of hospitality service quality. Therefore, most accommodation facilities install the HVAC (heating, ventilation, and air-conditioning) system. However, a HVAC system is another carbon emission source not only because of energy consumption, but also due to refrigerant leakage. Refrigerants usually have high global warming potential.
• Supply chain: Considering the lifecycle of any accommodation service, many emissions are from their own supply chain. For example, local food supply generates less emission than international suppliers because the longer the transportation distance is the more carbon emissions that are produced.
A platform to connect green to economic rewards for people and business.
Earlier we mentioned a Carbon Club concept. We have developed a unique solution for the accommodation industry to achieve the sustainable goal with economic rewards. We established the Carbon Club to connect hotel greening efforts and guests. Through carbon management, hotels will not only reduce costs but also reduce environmental impacts. Such reductions are then turned into reduction dollars under the Carbon Club mechanism. The reduction dollars, the green money, could be allocated to individual Carbon Club members who stay at hotel and then the green money can be used during hotel stays, potentially through the hotels ‘greened’ loyalty program. Reduction dollars could also be sent to the local community or all guests has a dividend they can redeem when using the hotel.
Therefore, the environmental reductions, as green assets, are developed as a new marketing tool to attract more guests who stay again and again. On the guests’ side, they can enjoy spending their reduction dollars on more hotel products or services, such as a bottle of sustainable wine. And on the hotel side, more products and services will be sold and more revenues will flow into the business.
Carbon management is the key to sustainability. It can compel people’s choices and converts average customers into green customers; helps and rewards local and international communities; reduces costs but, moreover, generates more profit from increased business. It is a comprehensive approach to sustainability.
Where will a hotel start?
No data, no management. Thus, measuring your carbon footprint is the first step for the accommodation industry to manage their emissions and optionally generate reduction dollars that can be the media between economic returns and green investments.
We recommend hoteliers start from a simplified standard, The Hotel Carbon Measurement Initiative developed by World Travel & Tourism Council and International Tourism Partnership. This is very limited and, for hotels, who want to know more about their carbon emission for whole not part operations, the following methodology is your best choice: Greenhouse Gas Protocol published by World Business Council for Sustainable Development and World Resource Institute.
Although initiatives such as the eco-certificate does not greatly contribute to bookings, certification adds brand value and is a good way to communicate with guests. Therefore, we recommend hotels gain third party certification domestically and/or internationally. Internationally, we suggest ISO 14064-1 Specification with guidance at the organisation level for quantification and reporting of greenhouse gas emissions and removals.
Measuring in isolation without action is pointless. We are happy to share its unique MAGIC principle. A guide for hoteliers to realise economic benefits through environmental reductions. MAGIC is shown as below:
• Measuring carbon footprint;
• Assigning carbon management target and tasks;
• mitiGating environmental impacts;
• Integrating other environmental management (e.g. energy, water and waste) to carbon;
• Connecting green to economic awards for both people and business – the Carbon Club.
Sustainability is achievable within the accommodation industry, the key message is that you must address all contributing factors and the most difficult are those you cannot control only influence.