Maximizing Sustainability in Hotel, Resort, and Casino Properties

By Marc Stephen Shuster Partner, Berger Singerman | November 23, 2014

Co-authored by Jeremy L. Susac, Partner, Tallahassee Office, Berger Singerman

The United States Green Building Council estimates that buildings account for approximately (“~”) 38% of carbon emissions, ~14% of potable water consumption, ~30% of waste output, ~40% of raw materials, and a significant portion of our energy consumption. In California, roughly 19% of all energy consumed is for water treatment and pumping for human consumption. These numbers hold true for hotels, resorts, and casinos in warm climates. Maximizing sustainability in a hotel, resort, or casino property takes time and a considerable upfront capital investment. Detailed, below, are some reasons why sustainable measures are a “must” in the nation’s hospitality market.

Take hotels, for example. The U.S. Environmental Protection Agency estimates that hotels spend more than $2,000 per guestroom on energy. That’s an enormous estimate when multiplied by the number of hotels in our nation. In fact, National Grid estimates that lighting, space heating, and water heating represent close to 60 percent of total energy use, making those systems the best targets for energy savings. For a full-service hotel, these energy costs are usually between 4 and 6 percent of the hotel revenue, but historic and luxury properties may see energy costs closer to 10 percent or more. These cost estimates grow when multiplied by the number of hotels in our nation. According to the American Hotels and Lodging Association, the U.S. has more than 50,000 hotels, with over 4.9M guestrooms. The energy intensity of hotels varies widely based on location, climate, on-site amenities, size, and number of guestrooms; however, one common denominator is that cooling and lighting alone account for half of the building’s electricity consumption.

As for water consumption, the U.S. Green Building Council estimates that 30-70% all water not used for agriculture is used for irrigating landscapes, and hotels, resorts, and casino properties are likely leading the way. Smart water use must be tied with smart, cost-effective reductions and strategic planning. For example, do we really need 1.6 gallons of drinkable water to flush each toilet? No, and today there are waterless urinals that can save upwards of 55% in some instances, or otherwise stated, a savings of 15,000 and 45,000 gallons of water per year. Further cost-effective reductions can also be achieved by using native plants, efficient irrigation technologies, and smart re-use policies. These strategies are particularly important to warm climate states like Florida, with its record-breaking 94 million tourists per year.

Take Miami as an example. Miami is the second “hottest” hospitality market in America, and is also one of the hottest cities, in terms of climate. Its economy is bustling and outpacing most cities in terms of development. In fact, some local officials claim the new state bird is the “industrial crane.” But with great growth comes great environment impacts. And, in an effort to promote environmentally sensitive design and construction, the Miami-Dade County Commissioners passed an ordinance to expedite the permitting process for “green” buildings certified by a recognized environmental rating agency. Commercial, industrial, and residential projects are all eligible as long as they are located in unincorporated Miami-Dade County and the City of West Miami. In addition, renewable technologies - such as solar water heating and solar photovoltaic projects - are included in the "fast track" for permitting review. These renewable technologies also receive generous incentives under Florida law, and promoted by the State of Florida’s Office of Energy – which is key to energy reduction by significant users.

Large energy users, such as hotels, often miss opportunities to significantly reduce start-up costs by failing to implement rate-reduction strategies available in a state like Florida. These sectors are large, and have great energy needs. These hotels and motels operate non-stop, and are constantly consuming energy, hosting guests, running restaurants, and maintaining key services such as heating/cooling, running water, and functioning swimming pools. This energy cost is a considerable expense in a recovering business climate. To help grow these businesses, utilities are now providing positive programs that reduce the initial cost of electricity, and free up capital to facilitate business growth. These programs are a product of a true public-private partnership with industry and state regulators.

Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.