Pressure is growing on the hotel sector at large to demonstrate a greater commitment to environmental issues, as industry more broadly faces calls to head for zero carbon targets.
The momentum is currently building ahead of the next COP26 global summit of world leaders, scheduled to discuss climate change in Glasgow in early November.
More commitments, and more robust methods for measuring and benchmarking, are coming to the fore; while more major hotel groups are making public commitments to work towards carbon reduction targets. And, acknowledging that consumers are asking more questions, Google has introduced a green ranking for hotels via its searches.
Ufi Ibrahim, founder and CEO of the Energy & Environment Alliance, warned on a recent webinar with DLA Piper that all businesses are facing increasing regulation around reporting and disclosure; in Germany, for example, business will need to record due diligence when checking their supply chains. “There’s a lot of regulation that’s coming – today it affects big businesses, but it’s going to trickle down.”
Ibrahim said that as well as operations, assets will also need to be assessed for their green credentials and energy efficiency: “The investment community have already responded. Assets are undergoing a due diligence audit.” Investors will be marking down assets, where they see substantial costs to bring an asset up to standard. “If you don’t act now, it will have a significant impact on your access to capital.”
She warned of the impact from consumers, and from hiring staff: “If you’re not able to put your ESG credentials into a value story that is understandable, then your occupancy is going to suffer.” And she added that younger people are more concerned about environmental issues, making a judgement about potential employers.
The UNWTO has got in ahead of the Glasgow event, preparing a declaration that will be launched there to draw in commitments from across the global tourism space. It states: “A just transition to Net Zero before 2050 will only be possible if tourism’s recovery accelerates the adoption of sustainable consumption and production, and redefines our future success to consider not only economic value but rather the regeneration of ecosystems, biodiversity and communities.”
UNWTO secretary-general Zurab Pololikashvili commented: “No one organisation can tackle this alone. That’s why we need to work urgently together within a consistent sector-wide approach to accelerate change.”
Major hotel groups are also lining up to make commitments. Accor has joined the Sustainable Hospitality Alliance, linking with other major hotel groups in a bid to improve the sector’s sustainability credentials.
“Sustainability and social responsibility are essential to our business,” said Accor CEO Sebastien Bazin. ”As a global hospitality group, we have a responsibility that goes far beyond our own impacts and it’s our role to shape the future of travel and take care of our planet and the communities in which we operate.”
Marriott has also just announced its commitment to go net zero on carbon by no later than 2050. The company has officially signed up to the Race to Zero campaign, with CEO Tony Capuano acknowledging: “This rigorous climate commitment to reach net-zero emissions is a needed step for us to do our part.”
Marriott notes it will need the support of property owners and franchisees to get towards the targets. Initially, it has said it will focus on reducing single use plastics, reducing food waste, and working towards more sustainable sourcing. The company has also committed to support a tree planting programme, and to helping environmental projects including working with The Ocean Foundation.
At Google, the search giant has introduced a new “eco-certified” tag for hotels it lists in search results. Consumers will be able to click through for property-specific information supporting the claim, drawing on certified information from 29 accreditation programmes, that the hotel itself will need to upload. According to the search engine’s statistics, searches for the term “green hotel” have quadrupled since March 2020. It is working with the big hotel brands to access the information, and will encourage individual properties to add relevant material to their listing profiles. Google has also said it will join Travalyst, a sustainable travel coalition launched in 2019 with sponsorship from UK royal Prince Harry.
Finding meaningful ways to measure progress is key. Cornell University’s hotel sustainability benchmarking index is an established route, albeit rather US-oriented, and has just delivered good and bad news around the hotel sector in its latest annual summary. The study gathers data from 26 international hotel chains, and from more than 21,000 hotels. While almost two thirds of the sample was drawn from properties located in the USA, the study is continually improving its international reach, with data from 57 countries in total. It has found that over the most recent three years of data, covering 2016-19, there has been a 3.3% reduction in energy use, while water use fell by 3.73% per occupied room.
However, the picture was less positive when coming to full-service resort properties, which registered a slight increase in resource consumption.
With the most recent year’s data substantially disrupted by the pandemic, the annual study will take a necessary break in gathering data, meaning it will not publish next year. Data will, however, continue to be gathered, with the study resuming publication in 2023.
Also working on benchmarks, the Energy & Environment Alliance has teamed up with BRE Group, to deliver a standardised way to measure sustainability in the hotel space. Building on BRE’s now global BREEAM system, which measures the sustainability of newly constructed buildings, the pair are aiming to deliver standardised measures that everyone can utilise.
“We haven’t as an industry set some standards,” said Ibrahim, noting different ways of measuring floorspace. “There are standards we need to set as an industry – we have to work together, so that adoption can take place internationally. Investors want to have the reassurance that there is consistency so they can effectively measure a portfolio.”
James Fisher, key account manager for real estate at BRE Group said that investors are already on board: “Just recently we’ve seen a study using BREEAM data, showing that for office buildings, higher ranked assets can attract higher rentals. An ESG story is important in making it easier to obtain funding. We’ve seen very large investment funds demanding a BREEAM specification, because they want uniformity.”
Fisher said while data can appear overwhelming, that is no excuse for failing to start measuring: “Don’t wait to start the journey, before you know what net zero means – it’s about capturing data that’s relevant.”
And demonstrating that going green is not just the preserve of big business, serviced apartment group Lamington is one of the first in that niche to set out its target of zero net carbon over the life of its future developments. The company has published its 2030 Net Zero Carbon Roadmap, and will adhere to the UK GBC Whole Life Net Zero framework, in the design, construction and operation of all future builds. Measures will include the use of low carbon construction methods and materials, purchasing 100% renewable energy during construction and in-use, with offsets where emissions are unavoidable.
It will also trial a rewards scheme, to encourage guests to act more sustainably.
Lamington MD Robert Godwin says the move “reflects our strong belief that the real estate sector should be taking a lead on climate change to protect our planet for future generations. Despite buildings accounting for 40% of greenhouse gas emissions, the hospitality sector in particular has been left behind within the real estate industry.”
HA Perspective [by Andrew Sangster]: Climate change is one of those topics like Brexit where moderates get shot at by both sides. Coming under fire from all directions does not prove that your viewpoint is wrong but it is distinctly uncomfortable. So tin hat at the ready, here goes.
The first thing to say is that the likes of Extinction Rebellion and their new, even more annoying cousins Insulate Britain who are currently imitating hedgehogs across British roads are just plain wrong. They are wrong to forecast the imminent collapse of civilisation and they are wrong with their methods. If there is to be change, it has to be through democratic channels.
Climate science is mind boggling. I’m probably in the top few percent of the population in my numeracy (A levels in Maths, Further Maths and Physics plus a quantitative first degree) but I am bamboozled by the science.
But there is a process for reaching consensus and, in my view, us civilians should stick to interpreting the consensus rather than dallying with the extremes at either side. The main organisation for this process is the Intergovernmental Panel on Climate Change, a United Nations body.
Even here, there is a tendency to go off piste. Recent media reports have focused on a draft report that has not yet been through the process of becoming the established version. The next report, the Sixth, is due out in September 2022 and will, when it is finalised, update us on the current scientific consensus.
In the meantime, the IPCC put out a press statement in August that should give pause for even the biggest climate change sceptic. This was based on the first instalment of the big report out in September next year.
The 195 member governments standing behind the instalment, recognised that human activities were responsible for around 1.1 degrees of warming since 1850 to 1900 and that over the next 20 years, global temperature is expected to reach or exceed 1.5 degrees of warming.
Once we get to two degrees of warming, “heat extremes would more often reach critical tolerance thresholds for agriculture and health”, said the report.
One interesting detail was that extreme sea level events that previously happened once in 100 years could happen every year by the end of this century.
This bit of the big report just looked at the physical science basis, examining all available evidence and reaching consensus among what has been the biggest ever group of scientists and government representatives.
Coming up in February and March next year are reports on what the impacts are going to be and what mitigations are available. The IPCC is not conducting its own research but rather examining contributions from a broad range of sources.
All this detail matters to investors because this is not coming from a few fringe groups. It is the considered view of what is effectively the global establishment. And this means governments are going to be using it as the basis for their policies.
These policies are going to be punishing on industries that are perceived to be contributing to climate change. As is usual, those industries with good government relations – think agriculture and manufacturing – are going to get an easier ride.
The travel, tourism and hospitality sector, if it cannot make its voice heard better than it historically has been, is going to be battered.
As a small example of the sort of things heading our way, look at the travel sector’s treatment during the Covid lockdowns. In particular, why do international travellers have to pay for Covid tests while everybody else gets them for free? This GBP100 or more extra burden per individual traveller – a meaningful deterrent to travel especially with the extra hassle and uncertainty the tests and additional border regulations create – shows how easily governments are prepared to impose penalties on our sector.
Unless travel, tourism and hospitality raises its lobbying game, it is going to be lumbered with a disproportionate share of the costs of mitigating and adapting to climate change.