Linking Greenhouse Gas Reporting by Hotels to ROIs

By Rani Bhattacharyya Community Economics Extension Educator , University of Minnesota Extension- Center for Community Vitality | April 23, 2010

Greenhouse gas emissions (GHG) reporting in the hospitality industry can be difficult due to the current relationships between brands, franchises, and management companies. It is possible and more pressing however for individual property managers to incorporate GHG reporting and monitoring principles into their operations due to federal, state and local legislation coming into effect over the next eight months.

In this article I will try to provide a few reasons for why is GHG reporting is important for your property; a strategy for how to identify, and benchmark aspects of your operations where GHG metrics can be monitored; and examples of energy, water consumption, and waste diversion ROIs that hotels have already achieved through improving the environmental performance of their facilities.

GHG Legislation and Programs

While the GHG reporting can appear daunting and complex, properties located in the United States have a variety of reporting model options to use for monitoring GHG missions. Examples include: the National Guidelines from the International Panel on Climate Change (IPCC), the U.S. EPA Emission Inventory Improvement Program (EIIP), Regional and State defined GHG Inventories and registries; and the Cites for Climate Protection Project (CCP). Each of these programs serve as data aggregating and reporting tools concerning facility and building environmental performance by both the private and public sector organizations. While all of the programs do report on carbon dioxide emissions, it's important to note that the National Guidelines and framework outlined by the IPCC report on the broadest range of emission gases including: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. Amendments to the Clean Air Act (CAA) in September of last year now requires any company emitting 25,000 tons per year or more of GHG's to submit their first emissions report to the U.S. EPA beginning in 2011. In addition to this federal mandate, 19 states have adopted mandatory reporting requirements for companies operating within their jurisdictions and 22 other states manage or endorse voluntary reporting programs.

Once you've determined if your property is required to comply with the CAA or with any local program; it's also important to keep in mind your market position when making your GHG reporting model decision. First, identify where your primary competitors are located; are they within your city, state, region or global? The second step is to then identify where your stakeholders and target markets are located; are they in the same geographic regions as your competitors or in a different geographic area? Answering these questions can help identify what geographic scope of reporting works best with your current business model and market positioning.

After identifying the geographic scope of your intended market, choose a GHG reporting program that is based on the same geographic area of your target market. This will help make your benchmarking and reporting more accurate, and comparable to your competitors. The third step (if the option is open to you); is then to decide if your management team would like to work with a GHG inventory program or registry. GHG Inventories function operate on accounting practices outlined by the IPCC and EIIP guidelines and are used to generate statistical reports on GHG performance for specific geographical regions over specific time periods. GHG Registries differ in that they are designed to allow for reporting on a project or company level by members and they can also require voluntary or mandatory participation depending on the registry's mission.

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Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.