Carrots and sticks
Will hotel operators be pushed or pulled into integrating sustainability across all business practices?
As we move firmly into the second decade of the 21st century, the issue of sustainability is no longer just for university campuses and futurologists. It has become a core driver in determining how we manage our hotel businesses. As every country and company is taking a different approach, in this article I'd like to share where the UK is now in terms of encouraging sustainability.
So to look at the UK's approach. The CRC Energy Efficiency Scheme is a mandatory scheme to improve energy efficiency and therefore cut CO2 emissions. It impacts large tourism and hospitality businesses and many companies have registered already. Organisations who fail to comply will be subject to enforcement action. Qualification for the scheme is based on half-hourly metered electricity usage. A hotel or hotel company qualified if during the 2008 calendar year it:
- had at least one half-hourly electricity meter (HHM) settled on the half-hourly market across the whole organisation.
- had a total half-hourly electricity consumption over 6,000 megawatt-hours (MWh)
The first compliance year starts in April 2011. As Charles Hansard of First Carbon Solutions says, "Boards and directors are gearing up, with their professional advisors, to minimise the risk of non-compliance, benchmark plans for compliance and learn how others are approaching the issue."
And whilst the UK Government has some sticks in place, it also has some carrots. The tax advantages of sustainable hotel design are also worth considering. The availability of Capital Allowances on hotel purchases, construction, or refurbishment can provide useful tax savings and often a tax rebate. Its imperative to obtain specialist advice as early as possible on hotel design so as to optimise the full range of tax reliefs. Alun Oliver of E³ Consulting says "We saved a UK hotelier over €1.2m though fully optimising the available reliefs – claimed on over 55% of the total project spend. Enhanced Capital Allowances, available on certain energy efficient or water conservation assets, give 100% relief and so are particularly valuable provided the assets incorporated into the design meet the tax criteria."
My colleague Ian Graham, principal of Hotel Solutions Partnership, has for many years been a Visiting Fellow at Oxford Brookes University where Dr Rebecca Hawkins is the Research and Consulting Fellow at the Centre for Environmental Studies in the Hospitality Industry. Their work on the inclusion of sustainable food in workplace catering (2009) concluded, "...while there is a latent level of interest in sustainable foods among those using catering outlets in the work place - it is nothing more than latent interest."
Many of the most significant changes in buyer behaviour over the last three decades (favouring energy efficient products, recycling, etc) have not grown organically out of a deregulated market. They are invariably kick started by Government regulation, taxation, incentives, or, very occasionally, shifts in market preferences as a result of a health or similar scare. Who can say when the tipping point will arrive in your country? But for some of us, minimising the carbon footprint is now as much a part of building and running a hotel as the quality of the bed linen, the contracts with travel agents, or the food costs.
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