Guest expectations during a hotel stay are changing. In a competitive business that works to fill an entire building every night, sustainability is emerging as one way to stay ahead of the competition. While those in the industry do not currently see the ability to charge a premium rate for green hotel assets, positive feedback on their patrons’ comment cards indicates the value of including hotel guests when forming a hotel’s sustainability initiatives.
According to a survey of 72,000 Hilton guests, about 33 percent said they prefer hotels with environmental and social programs. Among guests younger than 25, that number jumped to 44 percent.
To meet guest expectations about sustainability and attract younger and more environmentally aware customers, hotels must go beyond basic efficiency measures like installing light-emitting diode (LED) lighting and in-room climate control. Sustainability and efficiency measures that reduce utility costs and boost net operating income create easy opportunities to add value to a hotel—and unlike other types of real estate assets, hotels can reap those benefits directly without having to share the savings with tenants.
However, utilities represent only a small percentage of a hotel’s overall expenses, so sustainability initiatives that also provide a unique guest experience can help set a property apart from its competition.
Guests Notice Materials
If hotels want guests to truly feel the value of their choice to stay in a sustainable hotel, it is important for the property’s management to successfully communicate to them what sustainable choices were made around the property and how the guests can participate in creating a more efficient experience.
In contrast with other asset classes, the transient nature of hotel guests means that achieving green building certifications is not necessarily the best way for hotels to showcase sustainability to individual guests. But various choices or items that a guest can see or use, like a recycling bin or locally sourced materials, are more likely to be noticed by guests than a certification, as laudable as that certification may be. Material choices can help with placemaking, tying guests to the local environment and creating a more community-focused experience.
Because hotels renovate guest rooms every five to seven years, many opportunities exist to incorporate more sustainable options, from fixtures to furniture. These choices not only improve sustainability, but also can support guest health and wellness by reducing the off-gassing of volatile organic compounds (VOCs).
RATIO Architects is a multidisciplinary design practice with studios in Indianapolis; Champaign, Illinois; Raleigh, North Carolina; and Chicago that partners with clients on a wide range of asset types. RATIO’s Ironworks Hotel project in Indianapolis features repurposed industrial cranes from a defunct ammunition factory in a new 120-room boutique hotel to highlight the area’s manufacturing heritage. Continuing with the industrial theme, the design features natural concrete wall finishes. Repurposing industrial materials and replacing drywall and paint with concrete not only added to an authentic industrial design and guest experience, but also reduces embodied carbon (greenhouse gas emissions from materials throughout their life cycle) invested in the hotel.
The hotel’s design and material selections also resulted in improved conditions for guest health and wellness. By reducing the amount of drywall and paint used throughout the property, the hotel improves indoor air quality. The hotel also features the largest windows ever used in a RATIO project, resulting in expansive outdoor views and natural lighting, which reduces the energy required for lighting. Finally, an open and industrial-looking stairwell, complemented with local art, entices guests to take the stairs to the property’s restaurants instead of using the elevator.
Recognizing the high-quality design and guest experience, AAA recently awarded the Ironworks Hotel a prestigious AAA Four Diamond rating.
“The boutique, five-story Ironworks Hotel is inspired by 19th-century architecture, blending industrial character with a highly curated, first-class hotel experience,” says Jeff Milliken, principal at RATIO. “To achieve authenticity in a brand-new building, the design concept incorporates materials and relics of America’s industrial heritage while also promoting a sustainable and healthy guest environment.”
Balancing Efficiency and Comfort
While hotels aim to provide the best possible experience for guests during their stays, selecting the sustainable choice while doing so can be a challenge. Sustainable materials do not always hold up well to constant use, and complicated water or heating, ventilation, and air-conditioning fixtures can frustrate guests looking for comfort and convenience while away from home. Careful consideration of fixtures is key to ensuring balance between guest expectations and sustainability. Clarion Partners is a U.S. real estate investment manager with about $50 billion in total assets under management, including 55 hotel properties comprising more than 8,000 guest rooms across 25 states. During a renovation program over the past five years, the company undertook replacement of bathroom fixtures across its hotel portfolio. Because water is such a significant expense at hotels, these replacements saved water and reduced costs:
Toilet replacements reduced water use from as much as three gallons per flush (GPF) to 0.8 GPF (11 to 3 li), resulting in an average annual savings of $9,000 per hotel. Today, more than 90 percent of the hotels in the Clarion portfolio have low-flow toilets.
- Faucet aerators reduced annual water consumption by an estimated 91,000 gallons (345,000 li), resulting in average annual savings of $1,000.
- Showerheads were replaced across 95 percent of the hotel portfolio, with fixtures reducing water consumption from 2.5 gallons of water per minute (GPM) to 1.75 GPM (9.5 to 6.6 li).
The team in charge of these upgrades at Clarion worked hard to ensure that their hotels perform efficiently while maintaining a luxurious environment for guests. Showerheads play an important part of the guest experience in hotels, so when undertaking this replacement, Clarion partnered with Kohler to compare two of its leading water-efficient products, one using 2 GPM and another using 1.75 GPM (7.6 vs. 6.6 li). Several asset managers and hotel managers tested both products at their homes, and surprisingly, the water coming from the lower-flow showerhead felt stronger than the higher-volume choice. In addition to ensuring a high-quality guest experience, this replacement achieved an average annual savings exceeding 500,000 gallons (1.9 million li) of hot water, which represents $5,550 of water savings and $1,700 of natural-gas savings for a total of $7,250 of annual savings per hotel.
“Implementing sustainable practices that help our environment while ensuring guest comfort shouldn’t have to be mutually exclusive,” says Chuck Lathem, managing director at Clarion Partners.
“Hotels host millions of travelers annually, so we have a real opportunity to not only demonstrate that we are taking quantifiable action to improve our planet, but we are doing so in ways that complement the guest experience.”
Making a Positive Impact
Beyond sustainable design choices, hotel guests appreciate opportunities to get involved in the local community and have a positive social impact. As the definition of sustainability broadens to include social responsibility, hotels are paying attention.
Hersha Hospitality Trust is a U.S. real estate investment trust that owns and operates 48 upscale, lifestyle, and luxury hotels totaling 7,644 rooms in urban gateway markets and coastal destinations including New York City, Washington, D.C., Boston, Philadelphia, South Florida, and select markets on the West Coast. Hersha Hospitality Trust’s sustainability initiatives, administered through its signature EarthView program, help develop offerings that potential guests appreciate and seek, like using responsibly sourced products that are better for a guest’s health or engaging with local communities to provide memorable amenities that elevate a guest’s stay. Numerous sustainable amenities provided at Hersha hotels improve the guest experience, including these options:
- Smart thermostat technology in guest rooms that increases guest comfort while reducing energy use;
- In-room recycling programs that allow guests to continue the environmental habits they perform at home;
- Locally sourced food and materials that support the local economy while providing hotel guests a unique offering;
- Complimentary bike rentals, which allow guests to explore cities and neighborhoods; and
- Electric vehicle–charging stations that offer drivers the convenience of charging their vehicles while they are on site.
To support guests who want to participate in programs that have an impact, Hersha turned to a common hotel room feature: the water bottle. With hotel operator brand standards often requiring water bottles to be provided in guest rooms, Hersha’s EarthView Water program was started in 2014 to help guests participate in a social impact initiative. EarthView Water is a private-label water bottle made of 100 percent recycled material and sold in the majority of Hersha’s hotels. Since implementing the EarthView Water program, hotels have increased sales of water and are supporting charities worldwide.
To help address a lack of access to clean, safe water, Hersha partners with nonprofit organizations around the world to ensure that for each bottle sold, $1 is donated to support clean water programs. To date, Hersha has raised more than $200,000 to provide clean water to communities in need, even recently starting a water campaign with Chris Long, a Super Bowl–winning Philadelphia Eagles player, to launch a campaign called #LetsDoGood, which brings together guests, Hersha associates, and National Football League players to help bring clean and accessible drinking water to rural communities in East Africa. This initiative is already funding a well in Tanzania that will provide access to water for 7,500 people, which can lead to increased educational, economic, and agricultural opportunities and lengthen residents’ life expectancies.
“Through the efforts of EarthView and their hotels, from 2010 to 2018, Hersha has achieved a 15 percent reduction in energy usage per square foot, a 41 percent reduction in greenhouse gas emissions per square foot, and diverted 25 percent of waste from landfills, saving $11 million across our portfolio since 2010,” says Matthew Lobach, director of sustainability at Hersha Hospitality Trust. “In short, hotels that participate in EarthView demonstrate to guests that they take a holistic approach to all aspects of the hotel experience. And as guest sentiments continue to trend toward favoring experiences and businesses that reflect their own values of doing good, our hotels are uniquely differentiated to capture this growing demographic.”
Upcoming Greenprint Report
For hotel owners and operators, the guest experience is just one aspect of sustainability to consider. To expand on how ULI members in the hospitality sector are thinking about sustainability, the ULI Greenprint Center conducted a series of interviews to inform a report, scheduled for release this summer, on opportunities in hotel sustainability. The report aims to assess the major obstacles to implementing sustainability in hotels and strategies for overcoming them; identify best practices in energy efficiency, water conservation, and waste reduction; and highlight industry trends to watch. The report will feature project profiles from hotel industry leaders, including key savings statistics, both financial and environmental, to accelerate the market’s move toward a more sustainable and high-impact future. The report is now available to members through ULI’s Knowledge Finder online tool, knowledge.uli.org.
The ULI Greenprint Center for Building Performance is a worldwide alliance of real estate owners, investors, and strategic partners committed to improving the environmental performance of the global real estate industry through value-enhancing strategies. Through measurement, benchmarking, knowledge sharing, and the implementation of best practices, Greenprint and its members strive to reduce their collective greenhouse gas emissions by 50 percent by 2030. Greenprint is a research center within the ULI Center for Sustainability and Economic Performance, which also oversees the Institute’s Urban Resilience Program and the Building Healthy Places Initiative. To learn more about ULI Greenprint, visit uli.org/greenprint.