The 3Ms of Sustainable Hotels: The Challenges of Measurement, Management and Monetization

By Deborah Popely Assistant Professor, School of Hospitality Management , Kendall College | April 26, 2015

Sustainability is well-established in the hotel industry. As sustainability as a business discipline continues to mature, the question for hotel executives has changed from "should we do this?" to "how do we manage this?" and more specifically, "how do we evaluate, document and justify investments in sustainability and assess whether they add value to bottomline?"

In conversations with hotel sustainability leaders, practitioners and academics, three ongoing issues stand out, which I refer to as the 3M's of sustainable hotel management. The first M is measurement, and the many challenges of capturing, analyzing and maintaining meaningful data about various aspects of sustainable performance. The second M relates to managerial decision-making, in particular evaluating strategic alternatives in terms of their contribution to operational and marketing goals, and then communicating those decisions with different stakeholder groups. The third and perhaps most important "M" is the ability to translate sustainability outcomes into financial benefits that reflect their real business value, giving the hotel executive the tools to make better investment decisions.

Measurement

The old adage that you can't manage what you can't measure is especially true when it comes to environmental and social sustainability. Without baselines and accurate progress reports, it is impossible to know whether your efforts are worth the investment of time, effort and money. That is why nearly every major hotel brand has established measurable sustainability goals that require properties to report energy consumption, water consumption, waste management and other relevant indicators on a regular basis. Although these programs provide greater clarity and standardization within the brand family, they do not alleviate many other problems experienced by hotel executives at the property or regional level. These include:

  • Staff Expertise - Executives report that many hotel employees lack the basic data analysis and report preparation skills needed to set up and maintain sustainability programs. Outside of the facilities engineering arena, many lack experience working with numbers and tracking information through different parts of the operation. According to one recent study, hotel general managers remarked that young professionals are bringing great respect for the environment with them to the workplace. However, these young recruits needed greater understanding of the operational, data management and financial skills to bring their ideas to fruition (1).
  • Tools and Systems - Hoteliers can be overwhelmed by the many different tools and systems available for measuring sustainability. Some are primarily designed to promote a vendor's products and services. Few are hotel-specific. Determining which tools are most credible, unbiased and applicable to a property's specific needs can be time-consuming. Executives note that managing and maintaining these systems over time also can be difficult in light of shifting priorities, budgetary constraints and staff turnover.
  • Standardization - When it comes to sustainability, there continues to be a lack of general consensus about what should be measured and how. Dashboards vary from brand to brand, among different certifying agencies and between different reporting platforms and indices (GRI, CDP, Dow Jones, FTSE4Good, Climate Counts, etc.). Fortunately, the industry has coalesced behind the Hotel Carbon Measurement Index (HCMI), with more than 15,000 hotels around the world using the methodology to calculate and communicate the carbon footprint of hotel stays and meetings(2). Nonetheless, hospitality sustainability is still quite a ways away from achieving the level standardization that could align the performance of properties, groups and brands. For instance, as of 2011, only about 10,000 hotels tracked energy using the USEPA's Portfolio Manager and of these, only 500 benchmark their performance against other hotels using the tool(3).

Management

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Mobile Technology: The Future is Now

Mobile Technology continues to advance at a relentless pace and the hotel industry continues to adapt. Hotel guests have shown a strong preference for mobile self-service - from checking-in/out at a hotel kiosk, to ordering room service, making dinner reservations, booking spa treatments, and managing laundry/dry cleaning services. And they also enjoy the convenience of paying for these services with smart phone mobile payments. In addition, some hotels have adopted a “concierge in your pocket” concept. Through a proprietary hotel app, guests can access useful information such as local entertainment venues, tourist attractions, event calendars, and medical facilities and services. In-room entertainment continues to be a key factor, as guests insist on the capacity to plug in their own mobile devices to customize their entertainment choices. Mobile technology also allows for greater marketing opportunities. For example, many hotels have adopted the use of “push notifications” - sending promotions, discounts and special event messages to guests based on their property location, purchase history, profiles, etc. Near field communication (NFC) technology is also being utilized to support applications such as opening room doors, earning loyalty points, renting a bike, accessing a rental car, and more. Finally, some hotels have adopted more futuristic technology. Robots are in use that have the ability to move between floors to deliver room service requests for all kinds of items - food, beverages, towels, toothbrushes, chargers and snacks. And infrared scanners are being used by housekeeping staff that can detect body heat within a room, alerting staff that the room is occupied and they should come back at a later time. The January Hotel Business Review will report on what some hotels are doing to maximize their opportunities in this exciting mobile technology space.