Hotel sustainability has become a focal point for companies everywhere and the hospitality industry is no exception. Across the board, hospitality companies – and more specifically hotels - are seeking ways to be more ‘sustainable’. Yet this murky umbrella term is being used liberally these days to mean everything – and nothing.
We are shedding some light on how hotel sustainability is permeating the day-to-day operations of the hospitality industry and what is in store for the future of sustainable hospitality.
Sustainability, company culture and financial health
Sustainability conjures up images of preserving the planet and attacking pollution trends. This, of course, is a central tenet of sustainability, yet increasingly this notion is also being used as a business tool in two distinct ways: first, to reflect upon company culture; and second, to project long-term financial/company health.
According to Inge Hujibrechts, Global Vice President of Carlson Rezidor, when it comes to company culture, sustainability is really about creating “responsible business.” In this context, responsibility involves implementing practices that affect all aspects of the business: everything from operations to finance and HR. Hujibrechts firmly believes that having a business with a focus on sustainability is a business which actively seeks out “engagement with people, community and planet”.
This kind of thinking implies, in a way, that sustainability is no longer really a choice for many businesses. Peter Lofgren, Head of Engineering Operations at the Mandarin Oriental Hotel Group, explains that it’s imperative for hoteliers to engage in any discussion on sustainability, since today “colleagues and guests are aware […] so you need to increase your awareness as an operator.”
This kind of socially-driven demand is a powerful vehicle for implementing change in order to retain customers and remain relevant. This idea of corporate consciousness of sustainability is central and Hujibrechts raises the fact that sustainability is increasingly seeping into hospitality businesses as “shareholders are buying into [it] in terms of following the environmental and social performance.” We can certainly see a positive trend in terms of corporate engagement with regard to issues of sustainability.
Where are energies being focused in the hospitality industry?
Today, efforts are concentrated on energy and water policies – these are the principal ways in which hotels today, as Lofgren of the Mandarin Oriental affirms, “can do good for the world”.
Of course, implementing sustainability raises new challenges for the hospitality industry. Hujibrecht stresses that one of the great challenges in committing to sustainability is about “setting long-term science-based targets” and achieving these goals in terms of reducing waste, energy expenditure and labor costs in all aspects of the business.
What’s more, to be able to do so on a scale that is unprecedented: today Carlson Rezidor has managed to reduce energy and water expenditure by 24 percent across the board, and such reduction targets will continue to increase exponentially as technological advances and awareness of sustainability play a bigger and bigger role in social, as well as corporate, consciousness – Carlson Rezidor targets 25-30 percent in the near future.
Another long-term challenge highlighted by Lofgren is that of thinking “not only of energy efficiency, but shifting over to renewable energy”.
Ultimately, Bernhard Bohnenberger, President of Six Senses sums up the sustainability discussion by weighing the risks of not adopting sustainable practices.
“What is the risk of climate change, water scarcity, human rights issues? We need to be proactive on the environmental and human rights side”.
The emphasis, thus, must be on making sustainability a key business value in order for it to be implemented properly
Sustainability to measure financial health
This brings us back to sustainability as a method of measuring overall company/financial health: while we may think of sustainability more traditionally as a purely ecological endeavor – improving water and energy policies to preserve the planet – Bohnenberger underscores how being “sustainable also means being smart about money”.
But when is it financially justifiable to implement sustainable practices? When will the costs involved in sustainability pay off? The unanimous answer among hospitality experts relates to long-term and big picture thinking for lasting business health and rigorously relying on metrics to quantify change.
The timeline is crucial here. Eric Ricaurte, Founder and CEO of Greenview, states that given “the challenges of climate change, resource depletion and inequality, we really have about 15 years to put our plan on the right path, which means we need to accelerate all of the innovations and all of the solutions across every industry and across every country”. According to Greenview, we need to “catalyze the uptake” and accelerate our sustainable efforts across the board. Thanks to metrics, it is possible to have an in-depth appreciation of the changes occurring.
Sustainable practices are clearly the future of the hospitality industry.
Bohnenberger, seemingly with his crystal ball, shows us the way to the future with what is currently occurring at Six Senses. The brand has been at the forefront of both luxury and sustainability since its inception 20 years ago, with the man known simply as ‘BB’ at its helm.
Six Senses was a pioneer in introducing the idea that luxury and sustainability could go hand in hand. It’s not only an important value in their offering, but is also a central tenet in their business model as a whole: “We […] demand in our management agreements that an owner has to dedicate half a percent of all revenues to sustainability: to local, ecological, and social causes”. Sustainability is so important that the electricity at the new Fiji Six Senses property will be only solar and powered by Tesla batteries.
At the end of the day, sustainability is hugely aspirational – it conjures up images of a better world.
As Bohnenberger bemoans, the way we live today is “disconnected from the true meaning of life”. From a business, ethical, and environmental perspective, it might very much be true that sustainability is that wake-up call and a hugely relevant key aspect in our attempt to “reconnect” with ourselves and the world around us. We can’t wait to see what’s in store for hospitality and sustainability – the possibilities are boundless.
Dr. Peter Varga, a professor of sustainable hospitality culture at EHL, writes:
Hotel companies have been mainly emphasizing two pillars of sustainability development advocate John Elkington’s classical ‘triple bottom line approach’: the environmental and financial. Today, a third pillar, the social dimension, has emerged because companies have started to adopt the credo of J. Willard (‘Bill’) Marriott, the founder of Marriott: "You’ve got to make your employees happy. If the employees are happy, they are going to make the customers happy".
Marriott’s concept of keeping employees and customers happy even indirectly predicted the emergence of a fourth bottom line concept of compassion/culture that questions the overall purpose of the company and its growing altruistic actions towards the general wellbeing of the business and its stakeholders.
As a result, a growing number of international hotel companies have developed sustainability and corporate social responsibility strategies in line with the United Nations Sustainable Development Goals. These initiatives can be perceived as the beginning of a paradigm shift toward a positive form of hospitality as Sébastien Bazin, the Chairman and CEO of Accor, believes. Consequently, these long-term and sustainable goals will probably influence the management of supply chains at hotel companies, too. Let’s hope these initiatives become certainties in the near future.