Top Government Incentives for Greening Your Hotel

By Arthur Weissman President and CEO, Green Seal, Inc. | September 02, 2010

Tax(1) incentives that are currently offered by state and local governments fall primarily into two categories: "hard" incentives such as grants, loans, tax breaks, or rebates that are given to developers and their clients by an agency; and "soft" incentives which include expedited plan review, permitting, and training or marketing assistance. The main difference between the two types of incentives is that hard incentives tend to focus more on building new relationships with prospective businesses to ensure resource-efficient facilities, and soft incentives tend to focus more on strengthening existing business relationships with a community to increase public awareness of environmental accountability. One example of a very common soft incentive that many state governments have already adopted is marketing to and encouraging their employees to use facilities for business travel and meetings that are managed in an environmentally responsible manner.

In comparison, hard incentives also tend to be very short-term and performance-based, which means they are awarded only after a developer completes the required design, construction, or operational requirement specified by the program. The extensive adoption of the US Green Building Council's LEED criteria by local agencies as metrics for grants or tax rebates is an example of incentives that are offered for energy, water, and resource-efficient planning and design by developers. The rebate programs from Southern California Edison1 and Pacific Gas & Electric(2) are examples of more long-term hard incentives for environmentally responsible operations and management.

A very thorough and updated listing for Energy Efficiency Incentive Programs available throughout the United States can be found in the North Carolina Solar Center's Database of State Incentives for Renewables and Efficiency (DSIRE)(3). Cities are also starting to offer carbon reduction benchmarking grants to businesses which voluntarily participate in third-party certification programs or other performance-based operational monitoring programs. Additional environmental planning, design, finance, and construction resources for developers can be found on the Green Building Finance Consortium(4) website.

Surprisingly, however, studies by both the American Institute of Architects (AIA) and the National Association of Industrial and Office Properties (NAIOP) have found that developers would rather see more soft than hard incentives offered by agencies. Since many environmental efficiency calculations now require specialized training and assistance from agency staff for businesses(5) and LEED criteria for building design and construction are becoming more popular for new real-estate development projects in the United States, developers are now asking how using environmental incentives will affect the speed at which any given property can come online and begin generating revenue(6). In response to this need by the development sector and to improve their ongoing support for existing businesses, many cities are now streamlining and consolidating their environmental incentives into green business programs.

Green Business Programs of Chicago, Los Angeles, and New York - Examples of Consolidated Government Assistance

In 2008, both the City of Chicago and the City of Los Angeles launched green lodging recognition programs as components of their larger green business engagement efforts; in early 2009, New York City and State have also begun discussions with their lodging associations regarding the benefits of green recognition programs. These cities, like many others which are working to develop city-wide climate action plans, are interested in developing green business programs as a means to re-engage with the local business sector and realize their commitments to the U.S. Conference of Mayors Climate Protection Agreement(7). In addition to recognizing local lodging facilities which are making efforts to adopt environmentally responsible practices, other business sectors covered by the green business programs of Chicago, Los Angeles, and New York also include restaurants, museums, office and retail spaces, and automotive services.

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.