Analyzing the Cost Benefits of Green Hotels

By Michael Haynie, SR. President, Parkway Hospitality Management | September 11, 2011

As hotel managers, we see firsthand the costly and wasteful use of resources our properties generate on a daily basis. Striving to be more environmentally friendly through the efficient use of energy, water, and materials can help to eliminate some of this waste while also providing cost benefits for your business. Green hotels have seen benefits such as increased profits and reduced costs and liabilities. By choosing to be a leader in sustainability, you can enhance your business's reputation, brand and market value, and gain many other intangible benefits. You can also reap federal and state tax benefits for your efforts. The bottom line is that "going green makes green."

The use of eco-friendly practices can actually reduce your operating costs. Lighting is a large energy-using system and is an easy area for reducing energy costs. Fluorescent lights produce more light than incandescent lights and last 8-10 times longer. A compact fluorescent light will pay for itself in less than one year. Solar power is also being used more commonly. It is a limitless natural resource with economic and environmental benefits. Hotels are using solar power in systems to provide thermal and light power. For example, hotels can use photovoltaic panels to harness solar power for heating the pool and sauna, decreasing utility costs and reducing vulnerability to fluctuations in energy prices.

Water Consumption is another area where hotels have a great ability to save resources and money. Lowering the temperature of the washing machine water by 20 degrees can save a great deal of money for your business, and the linens come out just as clean. Low-flow shower heads and faucet aerators are good options for conservation as well, and pay for themselves within 3-4 years. The use of placards that encourage guests to re-use their towels is a practice that is becoming more widespread and can help save energy costs. Some businesses are also starting to use dual flush toilets, which alters the amount of water used to flush depending on the type of waste. These toilets are very efficient and can greatly reduce the amount of water used.

Many hotels are hesitant to establish green programs in solid waste management, such as recycling or composting programs, because of the large amount of cooperation needed among staff and guests. However, recycling and composting of solid waste material can provide large cost benefits for businesses. Hotels produce a large amount of paper, aluminum and plastics that can be recycled at a cost savings. By placing recycling bins next to trashcans throughout your hotel, staff and guests will be more inclined to recycle. A large portion of the solid waste produced in hotels is food. Spoiled food and leftover food scraps can be composted and used to enhance the soil in the hotel's gardens.

There are many other ways to save resources and money. Buying local food cuts out the middle man, puts more money into the local economy, and reduces transportation costs and energy-wasting long hauls. You can also build a garden and grow your own herbs or vegetables to use in your hotel's restaurant or food service. Green roofs, roofs covered with plants and vegetation, are another option. These eco-friendly roofs help with storm water management, can improve air quality, help to lower air temperature, and can provide insulation for your building. All three of these options not only help to improve your business, but also help to improve the area and community around your hotel.

Going green can also help your property attract the 43 million self-proclaimed "eco-tourists." Surveys have found that these travelers are willing to pay 8.5% more to environmentally sensitive travel providers. Over 90 percent of U.S. travelers surveyed by the travel publisher Travel Zoo said they would choose a green, environmentally conscious hotel over a non-sustainable, non-green hotel if it was comparable in price. In my opinion, analyzing the cost benefit of a green hotel is still relative to the market conditions and real estate. While the cost of building a green hotel or LEED certified hotel is still more expensive than a traditional building, the cost has come down considerably. There are many advantages of a LEED certified hotel. There are still many federal and state programs with tax incentive programs, making LEED certification a good business decision as well as the right thing to do environmentally.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.