Top 5 Environmental Management Strategies Affecting Your Hotel's Bottom Line

By Bill Meade Director, Tetra Tech | May 06, 2010

Why go green?

The environmental movement is not new to the hotel industry. The major hotel chains have adopted environmental programs, including corporate-wide targets to reduce energy use, water use, waste generation, and more recently greenhouse gas emissions. Federal, State, and utility resource efficiency programs target hotels and other commercial buildings to reduce electricity consumption. Many independent hotels have put in place customer-focused initiatives such as towel and linen reuse programs. The major motivation for the industry is cost controls in the face of rising utility rates. Utilities account for 5-15% of total operating costs for hotels, and cost-effective environmental management strategies can cut property-wide consumption up to 30% without major investments in physical plant, and up to 75% in targeted use areas.

However, most hoteliers have stopped short in their environmental programs with the misconception that guests equate quality with excess and that technologies guests will rebel against the poor quality lighting of compact fluorescent bulbs or low flow rates of efficient shower heads. Those trying to demonstrate their corporate commitment to sustainability have felt that a linen or towel reuse tent card on the nightstand proves the hotel management's commitment to "save the environment".

The reality is that guests are becoming increasingly environmentally-conscious and have a much better appreciation for technologies and practices in hotels that share their interests. At the same time, they have become intolerant of "green washing", with the most common complaint that housekeepers replaced the towel they intentionally hung to use again. Becoming recognized for your environmental programs in today's marketplace is more difficult today than it has been in the past. The early adopters have reaped the marketing benefits of being leaders in their industry. However, given public policy, government incentives, and rising utility costs, never before has the dual objectives of customer relations management and profitability been more aligned.

Understand Your Environmental Footprint

No two hotel properties are alike. They vary in terms of size, layout, facilities, amenities and services offered. They also vary in terms of utility rates, government incentives, and local environmental issues. Finally, there are differences in investment horizon and whether hotel owners or operators are responsible for improving a property's environmental performance. In other words, there is no "one size fits all" for hotels.

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Eco-Friendly Practices: The Greening of Your Bottom Line

There are strong moral and ethical reasons why a hotel should incorporate eco-friendly practices into their business but it is also becoming abundantly clear that “going green” can dramatically improve a hotel's bottom line. When energy-saving measures are introduced - fluorescent bulbs, ceiling fans, linen cards, lights out cards, motion sensors for all public spaces, and energy management systems - energy bills are substantially reduced. When water-saving equipment is introduced - low-flow showerheads, low-flow toilets, waterless urinals, and serving water only on request in restaurants - water bills are also considerably reduced. Waste hauling is another major expense which can be lowered through recycling efforts and by avoiding wastefully-packaged products. Vendors can be asked to deliver products in minimal wrapping, and to deliver products one day, and pick up the packaging materials the next day - generating substantial savings. In addition, renewable sources of energy (solar, geothermal, wind, etc.) have substantially improved the economics of using alternative energies at the property level. There are other compelling reasons to initiate sustainability practices in their operation. Being green means guests and staff are healthier, which can lead to an increase in staff retention, as well as increased business from health conscious guests. Also, sooner or later, all properties will be sold, and green hotels will command a higher price due to its energy efficiencies. Finally, some hotels qualify for tax credits, subsidies and rebates from local, regional and federal governments for the eco-friendly investments they've made in their hotels. The May issue of the Hotel Business Review will document how some hotels are integrating sustainable practices into their operations and how their hotels are benefiting from them.