Sustainability is regarded as the key to a successful business in the 21st century. It is fast becoming a top concern for public and private sectors alike. The hospitality industry is no exception. 2020 was set to be a year of collective action on climate change until COVID-19 brought many unknowns, including how future travel behavior will develop and whether sustainable initiatives will be forgotten or gain priority. While travel will remain limited in the short-term and the industry will continue to suffer from excess capacity, the ability to offer the right experience to these fewer travelers will be crucial in attracting them. The question thus becomes whether, in the post-COVID-19 world, ethical and sustainable experiences matter more or less to customers than before.
But what does the term "sustainability" really mean?
Put simply, sustainability means natural ecosystems can continue to support life and provide the resources that meet the needs of the present and future generations. Clearly, the tourism and hospitality sector puts increased pressure on these resources. However, sustainability is more than environmental management; it is also about economic progress and social development.
Is this the right time to implement a sustainable strategy for your hotel?
Experts have different opinions on this question, but what they do agree on is that the COVID-19 crisis is emphasizing two takeaways. First, we are all interconnected, and we can all work together to protect our future. Second is the importance of future-proofing businesses for growth and resilience.
We compiled six guidelines for owners, asset managers and operators worldwide to develop sustainable strategies that are not just a "green marketing" effort, but a long-term competitive advantage and cost-saving opportunity.
Guideline 1: Lay the foundation
Before implementing any specific operational practices or certifications, you need to ask yourself how they can be integrated into a strategic framework. To be able to develop such a framework, you need to gather your stakeholders, from senior management to employees, to reflect on your mission and vision. Now, define why you care and how you can work towards your goal.
Where to begin?
The 17 Sustainable Development Goals (SDGs), developed by the UN, are a good way to start this discussion. However, your top management needs to determine which SDGs to focus on to fulfill all their sustainability objectives and align with their business. This includes three steps:
- Segment the SDGs into a "story". Organize those most relevant to you into three main focus areas: people, planet, and policy principles. To do so, define the end stated goal and structure it into intermediate goals.
Identify where the operation fits. Where do these goals already intersect with some parts of the company or your value chain?
- Make the business case. Identify the business case factors that can establish a commercial argument for where to play and why.
With a clear set of guidelines, the challenge of integrating authentic, sustainable development into your operation can be broken down into manageable pieces. For organizations that already have environmental policies in place, now is the ideal time to reconsider them from the ground up and collaborate with all stakeholders to improve and sustain them.
We might not have the money right now, but we have the time. Hotel asset managers suggest that even if the financial side of the business doesn't allow acting upon such actions right now, it is the time to set the foundation and develop a clear structural framework. Only then can you move to the next steps.
Guideline 2: Human sustainability at the core
People are central to hospitality, and environmental sustainability is only possible with human sustainability in place. A team of hotel asset managers and operators could have the best framework prepared, but it will only show success once it has cascaded down to every layer of the organization. Bringing everyone on board can only happen through collaborative support and education. To promote this awareness, you could hire external professionals, train managers to run sessions internally, or set up modules to be completed virtually. Staff responsible for environmental management should be properly qualified and trained. As covered in Guideline 6, it is possible to support your internal managers by offering training programs, such as the ISO 14001 or the CIEH Environmental Management Certificate.
Asset Managers recommend operators to also start considering more work from home options for their teams. Businesses now realize that they can trust employees to work remotely, savings on rental and utility costs from the offices are just an added plus.
Guideline 3: Evaluate Your Supplier Relationships
Now is the time to map and evaluate your supplier network before and after COVID-19. Ask yourself, how did your network change? What issues did you experience with each supplier, and how did they respond? After analyzing each relationship, look further into their location and sourcing. The pandemic, amongst other impacts, shook the world's supply chains, and many businesses have been forced to rely more on local suppliers. Even once the pandemic retreats, hotels will be left with the realization of the vulnerability of global sourcing. As part of your risk management, you should be considering the threat of trade wars or other unprecedented pauses in international transport, and therefore, place a larger focus on local sourcing. Think about how you can support your local businesses and how they can support you. Together with this newly found cluster, your hotel can recover sustainably and better face future risks.
Guideline 4: Re-engineer Your F&B Menus
After developing a new supplier network, evaluate which ingredients you will lose access to during certain times of the year. Operators should challenge chefs to be innovative, and make local, seasonal foods the cornerstone of their menus. Ask them to consider the foods they commonly have leftover and test their creativity of reusing them to reduce waste and save costs. Consider changing a few of your daily specials to be vegetarian, which has benefits for both the environment and your profit margin. Finally, make sure that all the changes made are well communicated to guests. For example, place a notice on your menus if not all usual dishes are available due to their lack of local availability, or why plastic water bottles are no longer in the minibar.
Guideline 5: Consult your HAM
With investor approval and owner commitment, the hotel asset managers (HAM) have a significant role to play in the execution of sustainability initiatives. First, the HAM should take a fresh, in-depth look at the asset and its maintenance plans. 'Sustain' and 'maintain' are connected not only by their similar definitions but in asset management as well. Preventive and predictive maintenance is a core component of a sustainable investment strategy. All too often, hotels rely on deferred or routine maintenance, which either leads to damaged physical capital or unnecessary time and money spent on maintenance. Instead, predictive maintenance first determines the condition of equipment to then estimate when maintenance should be performed. Companies that have predictive maintenance systems experience lower maintenance, energy and disposal costs. Employee and customer safety are also increased, along with public perceptions of quality. Ultimately, properly maintaining your assets produces less waste by reducing how much and how often you dispose of them, which reduces your negative environmental impacts.
Next, when considering CAPEX needs, the HAM should prioritize actions that have a positive environmental impact and align with the strategic framework set in Guideline 1). While some investments, like rainwater collection and treatment, are on the costlier side, there have been many exciting developments in waste management systems. For example, "Winnow" is a food waste technology that uses Artificial Intelligence. Food waste is a massive issue in hospitality, and it is not just food that is being wasted; hotels are losing the water, labor, energy, and other inputs to the preparation. Winnow can automatically track what is being thrown away and how much, while requiring almost no staff training or data entry. Then, the team can analyze produced metrics to detect the core of the issue, whether it is over-production, incorrect portion sizes, unpopular food choices, storage issues, etc. to devise improvement strategies. Its intuitive reporting feature helps the finance department and procurement teams report cost savings to further garner investor and owner commitment.
Guideline 6: Consider Pursuing a Certification
Finally, after completing Guideline 1, the HAM should consider the benefits of obtaining an official certification for sustainability. For example, the MICE segment will take the longest to recover from the pandemic but are a target for whom certifications are a big draw. After researching which would make the most sense for the property, the HAM should look at what competitors are offering and what MICE associations, incentive houses, and organizations are requesting. Certifications to consider are:
ISO 14001 Environmental Management System: Will help you to correctly identify, manage, monitor, and control your environmental issues while gaining a competitive and financial advantage through improved efficiencies and reduced costs. This is the standard followed by the European Commission's Eco-Management and Audit Scheme. Furthermore, the standard has recently been revised to reflect what we recommended in Guideline 1. It requires more prominence of sustainability within the organization's strategic planning processes and greater input and commitment from leadership.
- ISO 21401 Sustainability Management System for Accommodation Establishments: These are aligned with the 2030 Agenda for Sustainable Development of the United Nations. The environmental dimension would link to the systems explored in Guideline 5, the social dimension encompasses the development of the local community as recommended in Guideline 3, and the economic dimension includes prevention of accidents, which could result from proper maintenance in Guideline 5.
- ISO 50001 Energy Management: Used by Hilton, who was the first global hospitality company to achieve portfolio-wide certification of ISO 50001. These standards cover developing and implementing energy policy, setting achievable targets for energy use, and designing action plans to reach them and measure progress.
While safety is central to sustainability, it is essential never to offer a "COVID-Free" seal after re-opening, as you open yourself up to issues. Instead, if you would like to go the extra mile, the HAM and owners can consider establishing an alliance with a reputable certification body to guarantee high levels of hygiene. For example, NH Hotel Group and SGS recently announced their collaboration on a global disinfection scheme.
When following these guidelines, keep in mind that like with any other innovation, the approach taken needs to be aligned with the way your business behaves. Furthermore, these approaches can't be globalized, because at the end of the day, being sustainable varies depending on where in the world you are located. Hotels should be asking themselves how they want to be remembered after this crisis. Will you be proactive and generate new ideas to reach ever-higher levels of cleanliness, safety, and sustainability? Or will you follow the tried and tested actions of others? We encourage you to think critically about the benefits of a real, top-down commitment to sustainability in your business. Please contact us at [email protected]; we would be delighted to help guide your company through a sustainable recovery.
A special thank you to these experts, who kindly shared their insights with us:
- Carlos Martin-Rios, Associate Professor of Management, Ecole Hôtelière de Lausanne
- Cipriano Ferreiro Rachon, Global Project Manager, Travel & Hospitality Solutions, SGS
- Johanna Wagner, Founder, Upside Up
- Zeina Abdo, Sustainability Consultant, Meraki Services
Sources of Information
- Green Hotelier (n.d.) Retrieved from: https://www.greenhotelier.org/our-themes/community-communication-engagement/environmental-awareness-and-training/
- Harvard Business Review. (2017). Retrieved from: https://hbr.org/2017/03/how-companies-can-champion-sustainable-development
- International Organization for Standardization. (2015). ISO 14001 Key Benefits. Retrieved from: https://www.iso.org/files/live/sites/isoorg/files/store/en/PUB100372.pdf
- International Organization for Standardization. (2018). ISO 50001. Retrieved from: https://www.iso.org/files/live/sites/isoorg/files/store/en/PUB100400.pdf
- International Organization for Standardization. (2019). ISO 21401 - A modern vision for management of accommodation establishments. Retrieved from: https://committee.iso.org/sites/tc228/home/news/content-left-area/news-and-updates/iso-214012018—a-modern-vision.html
- European Commission. (2017). EMAS User's Guide. Retrieved from: https://ec.europa.eu/environment/emas/emas_publications/guidance_tools_en.htm
- NH Hotel Group. (2020). NH Hotel Group And SGS Announce Collaboration On A Global Disinfection Assessment Seal. Retrieved from:
- Wilson, Curtis. (2015). Maintenance Practices Enable Sustainability. Retrieved from: Maintenance Practices Enable Sustainability
- Winnow Solutions. (n.d.) Winnow Vision. Retrieved from: https://www.winnowsolutions.com/vision