Ms. Millar

Eco-Friendly Practices

Five Important Benefits of Green Certification

By Michelle Millar, Assistant Professor Hospitality Management, University of San Francisco

Green Certification?

Green certification helps consumers identify green hotels, and the practices they incorporate. A certification program also provides hoteliers the opportunity to have their hotel rated and labeled based on predetermined environmental practices and policies. Ratings will vary depending on the organization selected to certify the hotel. In some instances, the hotel self-reports which environmental practices they participate in and in other instances the certifying organization inspects the hotel. Standards that most certification programs use incorporate those areas of the hotel that relate to energy management, waste management, water use reduction, and education. Although the number of companies that certify appears to be growing, a few of the more well known organizations are Green Seal, Green Globe, Green Key, and the United States Green Building Council’s Leadership in Energy and Environmental Design Program.

When traveling today, consumers are presented with a wide range of hotels from which to choose. There are mega-resorts, bed and breakfasts, economy and mid-scale hotels that offer more and more amenities as those of full service hotels, and the increasingly popular lifestyle and boutique hotels of all sizes. The growing supply of so many different types of hotels makes it all the more important for hoteliers to create a product that will stand out and be different from its competitors. Green certification is a tool that hoteliers may use to distinguish themselves from others, and it can be applied to all of the previously mentioned hotel types. It can also be used to increase profits, enhance image, expand marketing opportunities, and provide clarity.

Why seek any sort of green certification?

There are five primary reasons why a lodging company might consider green certification.

1. Increased Profitability

The process of becoming green certified, while it may incur initial costs, produces cost savings in the long run, which, in turn, may lead to increased profits. For example, one key aspect of any green certification program is energy management. As part of energy management, hotel managers change all incandescent light bulbs to compact fluorescent (CFL). The initial cost to purchase the new bulbs may be significant, but the long-term savings will quickly offset those costs. The Crowne Plaza in New York spent almost $27,000 for CFL’s to replace 3300 incandescent blubs in an outdoor sign. The new bulbs use less energy, and less labor due to the fact that the CFL’s have a longer life span and thus do not need to be changed often. The hotel expects to save more than $120,000 per year in electrical costs and $20,000 per year in labor. Yes, there is more involved in the green certification process than simply changing light bulbs, but this is just one straightforward example of the savings a hotel might incur. There are many other examples that apply here, not only in terms of energy savings, but also in terms of water savings. As the old adage goes “you must spend money to make money”.

Another avenue for increased revenue for a green certified hotel is that green can demand a price premium. Organic products typically command a price premium, and demand for such products continues to rise. Consumers are willing to pay a higher price for organic products because of the perception that they are healthier, and are better for the environment. The same could be said of green certified hotels. They are also healthier for consumers, and are friendlier to the environment than traditional hotels. If consumers were willing to pay a premium for organic products, in theory they would also be willing to pay a premium for green hotels. In fact, there is already research that supports this notion. Travelers have indicated that they are willing to pay more for green certified hotels.

2. Enhanced brand image, reputation, and community involvement

Being a green hotel is good business. One of the stipulations in most green certification programs is that the hotel company must give back to and be involved in the local community, or provide support to charities either locally and/or abroad. In addition, hotel management must provide some form of education to both employees and guests about protecting the environment. An example of educating guests about “being green” would include information in hotel rooms about local green activities, or details about the company’s environmental policies and how guests can help with the process of protecting the environment during their stay. A towel-linen re-use policy is a classic means to educating guests about saving water.

To educate employees, employers will often have fund-raisers for environmental charities, or take employees off-site to participate in, for example, tree planting ceremonies or events that raise money for local charities.

We hear much about companies already educating employees and guests in such ways under the umbrella term of corporate social responsibility. Any sort of educational activity such as the examples mentioned here, and green certification, are activities that go above and beyond simply doing business. When employees, guests, and citizens within the hotel’s local community see this activity, they respond favorably. Instead of being seen as a large corporation, the hotel will be seen as a good neighbor and one that cares about and gives back to guests, employees, and the community.

3. Differentiation from other hotels

Hoteliers around the country are trying to create properties that distinguish themselves from others, thus we see the popularity of boutique and lifestyle hotels, and hoteliers partnering with celebrities to develop such properties. We see evidence of some hotel brands doing this on the green front with Starwood Hotel’s Element brand. Element is an eco-friendly brand with nine properties currently open. Element is just one example that stands out from it’s competition.

When searching for a hotel in the Orlando area on any given weekend, the results will include almost 500 lodging properties. New York City? Even more options. As a hotelier, what can be done to make your hotel stand out among all of those hotels? Green certification. Narrowing the search to green/sustainable hotels in NYC drops the available hotels down to 12 properties on Expedia. In Orlando, the number drops from almost 500 facilities, down to 42. Even if your hotel is one of 85 LEED certified hotels in the U.S., you are among a much smaller group than if you were simply one of the 51,000 hotels that are located in the United States. AAA also has an ECO icon for all AAA-rated hotels that are green certified by organizations such as Green Globe, LEED, state organizations and others. All of these certification labels help travelers narrow down their hotel options, and make your hotel their prominent choice.

4. Expanded marketing opportunities

Using green certification as a distinguishing factor for a hotel opens up opportunities to market the hotel to a different type of traveler. As the hotel market becomes increasingly competitive, management must not only try to differentiate its product, as mentioned above, but also try to attract new and different segments of the traveling population. Building a green hotel, or incorporating green practices into existing operations with green certification, is one way a hotel can do so. Identifying different segments, in turn, enables specific targeted marketing strategies.

Hoteliers may use this type of segmentation to focus on guests they believe will find their product most suitable, and then create appropriate marketing campaigns to attract them. With increasing competition in the hotel marketplace in terms of creating products that cater to specific hotel guests (e.g., lifestyle hotels, boutique hotels), and with more hotels online to receive green certifications such as LEED, it becomes increasingly important for hoteliers to identify the segment of travelers that will be most attracted to their product versus other’s products.

5. Provides clarity

There are many types of eco-labels on various products and services today. For example, online banking is now commonly referred to as green banking, as if it were a new phenomenon. In fact, online banking has been around for years. In the grocery store, consumers are presented with eco-labels such as “all natural”, “organic”, “green”, “sustainable”, etc. With such labels everywhere, consumers tend to be skeptical of them and become concerned about greenwashing. If not handled properly, this same skepticism can carry over into the hospitality industry. We are on the right track, though, with reputable organizations providing the certification. A green certification label provides guests with a base-line idea of what a green hotel offers, and of what to expect when staying at one. The labels communicate to guests, and, at the same time, educate them about the green hotel industry. This is a great benefit for the hotel and, most importantly, the guest. The labels educate the guests, who, in turn carry the green message to other potential guests. We all know how important that word-of-mouth chain is!

Michelle Millar is an Assistant Professor in the Department of Hospitality Management at the University of San Francisco. She received her undergraduate degree from UC Davis, her Masters of Tourism and Hospitality Management degree from Temple University in Philadelphia, and her doctoral degree in Hospitality Administration from the University of Nevada, Las Vegas. Ms. Millar has worked as a travel consultant in various types of travel agency settings for many years, and from 1998 until 2005 operated her own travel agency. She has extensive knowledge in vacation planning, meeting planning, corporate travel planning, and general business operations. In addition, she has worked in a small hotel, which provided her the opportunity to work in all departments of the operation. Her work experience has proven invaluable when teaching at the University of San Francisco. Ms. Millar can be contacted at 415-422-2498 or mmillar@usfca.edu Extended Bio...

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