As we enter a decisive decade for sustainability, is the window of opportunity for hotels closing?
Following a decade of growth which brought jobs and fostered local and regional development, the tourism and hotel industry has repeatedly outperformed the global economy.
More than 3,000 new hotels will open their doors in 2020 alone. However, the industry is also responsible for nearly one-tenth of all carbon emissions globally, with the hotel sector accounting for almost a quarter of all tourism emissions.
Under the Paris Agreement on Climate Change, the hotel sector must reduce its greenhouse gas emissions per room per year by 66 percent by 2030 and 90 percent by 2050 compared to 2010 (ITP, 2017). The technology required to decarbonize the industry is available now.
How do you see the calls for more sustainability within your organization and, in particular, our responsibility to bring about a carbon-neutral future?
As an active member of the International Tourism Partnership and in alignment with the UN Sustainable Development Goals, Radisson Hotel Group (RHG) has taken a global commitment to focus on carbon, water, youth employment and human rights. We recognize the hotel industry must reduce its absolute carbon emissions by 66% by 2030 and 90% by 2050 to ensure that growth in the sector is sustainable.
RHG actively strives to reduce our hotels' carbon footprint by reducing demand for energy from CO2-intensive sources and increasingly making use of renewable energy sources. That's why we partner with innovative companies that strive to provide clean, renewable energy from alternative sources. In 2018, 34 hotels in the Group operated on 100 percent renewable energy, including all hotels in the Nordics and France. On average, 17.2 percent of the energy used in our hotels in EMEA comes from renewable sources.
Radisson Hotel Group is committed to operating our worldwide hotel portfolio with the lowest possible energy and carbon footprints. We achieve this by implementing Think Planet efficiency principles in our standards, and through close cooperation with property owners, builders, and architects. We also use eco-modeling tools and certifications such as EDGE, BREEAM and LEED both in mature and emerging markets. Best practices and innovations such as the hydrogen fuel cell in our Radisson Blu Hotel, Frankfurt and first large-scale commercial Hybrid Voltaic project at the Park Inn by Radisson Foreshore in Cape Town, are hugely important to drive sustainable change in the industry further.
Additionally, we bring Carbon Neutrality to our guests. Radisson Meetings represents our commitment to deliver a personal, professional and memorable service to guests, and to respond to changing market trends and expectations. But what's more all Radisson Meetings are 100% carbon neutral. RHG is the only hotel group worldwide to automatically offset any carbon footprint at no cost to our customers. To do this, we have teamed up with First Climate, one of the largest carbon offsetting organizations in the world. For each meeting, the carbon footprint is calculated and then offset through First Climate by supporting certified projects that invest in renewables in Turkey and the USA or have a positive sustainable development impact in Peru, Kenya, and India.
In the tourism & travel industry we are already making SDG 17 a reality in organizations such as WTTC and ITP. I believe that cross-sectoral partnerships combining asset owners, finance, renewable energy providers and hotels in a location-based approach can be a powerful force for good towards building a better future for all with a net-zero carbon future in sight by 2050.
As leaders in the hospitality industry, we all have a responsibility to act now for the future.
Considering the collective impact the hospitality industry has on the environment, especially in terms of resource consumption and waste, going green is no longer a debate – it's a priority – and we believe that every effort, by every hotel company, counts towards bringing a carbon-neutral future.
At Dusit, we take our role as community stewards seriously, and we are constantly seeking ways to reduce waste, conserve energy, and promote eco-friendly practices across our entire operations. In 2018, we established our Sustainability Committee to help drive sustainability performance in our hotels. We also established our Sustainability Policy and 2020 Environmental Goals for energy, GHGs, water and food waste to further lessen our impact on the environment. This includes striving to reduce single use plastic in our hotels, and finding innovative ways to reduce carbon emissions such as using solar energy and sourcing ingredients from local organic farmers to limit transportation and support sustainable farming practices.
A shining example in this regard is Dusit Thani Maldives. Since its inception, the resort has been a sustainability leader in our hotel group. The whole team strongly adheres to sustainable operations, which go far beyond the scope of any normal hotel's standards. From recycling waste water and plastic onsite to producing its own electricity through solar energy, Dusit Thani Maldives is showing the world that sustainability is an essential way of life, and providing a template for all of our hotels to follow.
The hospitality industry is in the midst of what I call a Golden Age of Travel. As middle classes expand around the world, more people are traveling than ever, and they are craving unique, authentic experiences. That's an incredible business opportunity that we are rising to meet. The flip side of that opportunity is the critical responsibility we have to protect our communities and environment, so we can ensure destinations remain vibrant and resilient for generations of travelers to come.
At Hilton, we're doubling down on our Travel with Purpose commitment to cut our environmental impact in half and to double our social investment by 2030. We are taking the threat of global climate change seriously, and we were proud to be the first major hotel brand to set science-based carbon reduction targets in line with the Paris Climate Agreement.
In my role as chairman of the World Travel and Tourism Council (WTTC), we're also calling on our members to accelerate toward a carbon-neutral future with our new sustainability action plan, unveiled at the first-ever WTTC Climate and Environment Action Forum in New York this September.
Ultimately, our industry has a responsibility to the communities where we live, work and travel. And while we may compete in many ways, I feel strongly that sustainability should not be one of them.
The call for sustainability is becoming louder and louder and is totally justified. It is our individual and collective responsibility to bring our environmental footprint down and aim for a more carbon-neutral future.
As mentioned in my observations about “how will you weather the next economic downturn”, the answer to this question is difficult to ask universally to our hospitality industry. Asset light or fully owned companies will have a completely different focus.
Asset light hotel groups will be fully focused on B2C through their brands and direct guest approach. Certifications of all sorts symbolizing the ESG (Environmental, Social and Governance) will provide a quick fix towards the guest with yes, a positive impact on savings, but far from making the dial really move. Led lighting, use of plastic water bottles and other low hanging fruit are being addressed.
Our industry however is asset-heavy and the real impact on ESG sits way earlier in the design and execution of the hotel developments or major capital improvements.
Building methodologies like modular, materials, tech, mechanical and engineering are all making the true impacts on our environmental footprint and aim for a more carbon-neutral future.
At citizenM we focus heavily on ESG, actually from the very inception and have our ESG Director involved throughout the organization. We wanted to have a true hard measure instead of quick and relatively shallow certifications and have chosen for GRESB.
GRESB (Global Real Estate Sustainability Benchmark) was launched in 2009 by a group of large pension funds who wanted to have access to comparable and reliable data on the ESG performance of their investments and thus way more building focused.
Measuring is knowing and although our results are very encouraging, not having measured in the past still scurs our today results.
In year 3 now we should start to see a true measure and compare to the hospitality and other industries. Through the many and variety of measured touchpoints we learn also how-to better impact and steer our ESG effort.
If anything, I hope that our collective thoughts are seen as a call to action for all…
The reach of sustainability in the hospitality industry is appropriately growing in response to changing guest expectations. We have our work cut out for us to make progress toward a carbon-neutral future. There is no single solution, but rather a network of strategies, systems, and efforts to chip away at our energy demands and reduce our material usage. Our consumers are demanding and forcing the shift to occur and the hospitality industry must holistically embrace the challenge.
In the past, sustainability meant installing LED lights and reusing towels, but now we are seeing sustainability's reach bridging beyond the measures we make at the property level and into the relationships with our communities. With better coordination between owners, investors, developers, brands & operators, we can achieve a shift away from short term financial gains for long term sustainable ambitions. Our destinations rely on our ability to be custodians of the environment and to work together with our neighbors to develop a shared vision to preserve and protect the environment.
In pursuit of sustainable solutions and a carbon-neutral target in 2030, we are seeing more community collaborations with local town councils, community leaders and business owners which is ultimately necessary to develop long term goals and create a collective voice in addressing the challenges of climate change. If we can put our efforts into working together to develop best practices, energy efficiency, and waste reduction strategies along with developing educational programs we can see lasting change in pursuit of a carbon-neutral objective.
We are entering into a new chapter for all businesses that demand a sense of urgency and the attainment of meaningful results on the sustainability front. Accor has long taken the view that we're stewards of our incredible locales, and mitigating our impact is a key priority for Accor, and a responsibility the Group has fully embraced. Our key stakeholders are educated and aware, seeking an authentic connection between our sustainability programs, and our other CSR initiatives, and the results we drive to mitigate our impact.
Since 1994, Accor has led with a well-researched Planet 21 platform with an incredibly detailed action plan that demonstrates the Group's ambitious goals. The program is based around four strategic priorities: involve our employees, engage our guests, innovate with our partners and work with local communities, along with two key focus areas: sustainable food and carbon-neutral buildings.
Each hotel owns its sustainability efforts based on our solid platform and adhesion to the metrics the program demands. We have deep integration into our internal processes including design and construction, procurement, innovation, talent & culture, and food & beverage, with the understanding that these efforts are core to our DNA and second nature to our operations.
Accor's pioneering initiatives in the industry and beyond continue to minimize our impact and benefit those around us while creating key differentiation for our brand. We are always looking for continuous improvement as it is a company imperative.
I hope the window of opportunity for hotels isn't closing. At Dream Hotel Group, we are great supporters of sustainability and see a need for it in our industry. As a company, we're already taking the necessary steps to start making a difference in our world, such as offering guests the choice to reuse their towels, sheets and other linens versus washing daily. These are small things that make a big impact.
We also recently announced plans to open our first Eco Resort in Belgium next year. I can't reveal too many details, but sustainability is the guiding principle for this property – from the interior/exterior design, food & beverage, recreational activities and more. We hope to announce more on that project soon.
We also have plans to remove all plastic amenity bottles from our hotels by 2021, starting with our pipeline projects in Atlanta, Memphis and Valle de Guadalupe – all are currently under development, with Dream Valle slated to open first in 2021. A large format, mounted dispenser solution is in our most recent design and construction standards. Phasing out single-use plastic at hotels that are already open and operating will take longer. It will be a process to install the dispensers and wait until existing stock has diminished. That will ensure we're not dumping additional stock because that's wasteful both financially and environmentally.
And while these are all great things, my opinion is that this is too big for us to figure out on our own and it will need to be government-mandated to really have an impact. We need the government to set guidelines that need to be followed. A mandate that leaves zero room for interpretation and will actually help us reach our goals by a certain date/time. New industries will be built around these initiatives, creating new opportunities for our global economy. I think Dream Hotel Group and many other hospitality brands will take the initiative, but it needs to be planned. Someone needs to take the lead. And if it's done right, there are many other institutional organizations that can benefit too, like the restaurant industry, school systems, hospitals, etc.
More and more, guests, institutions and employees are demanding that companies pay more attention to environmental aspects as a key part of their decision-making and business strategy, clearly showing a shift in the general perception of the importance of climate change and responsible behavior.
Luckily, at NH Hotel Group we'd had this responsibility with our planet clear for some time now. Between 2007 and 2018, we have approved, deployed and invested in various sustainability plans that have allowed us to reduce our global energy consumption in 31%, our water consumption in 27% and our carbon footprint in 67%. These results have garnered international recognition and clearly demonstrate our solid commitment to leading the hotel industry towards a carbon-neutral future. For example, in the latest CDP Climate Change assessment of 2018, our Company obtained an A- assessment in the Climate Change Index. This places us among the leading companies in taking measures to effectively reduce emissions, indicating an advanced environmental management of which we are extremely proud.
But we do not intend to stop there. In 2019 we have publicly committed to a new and ambitious target: to reduce our carbon emissions of scopes 1, 2 and 3 by yet another 20% by 2030 (using 2018 as base year). NH has also been the first Spanish hotel company and the 5th in the world, to have this objective validated by the Science Based Target initiative, which means that it is in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement – to limit global warming to well-below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C.
I am sure that meeting this commitment will require the full collaboration and in some cases accelerated transformation of our organization, but we are willing to take up the challenge and look forward to continuing to be a benchmark when it comes to environmental responsibility within the sector.
For us, sustainability aligns with the innovation introduced by the future generation of hoteliers, such as the thought-provoking ideas presented at #GENIO2019 which so inspired a large hospitality leadership team last month.
Historically, the hospitality industry's emphasis has been on waste, conservation and recycling. Today, times have changed and unless we really hear what the New Generation has to say and how they apply technology to push the sustainability agenda forward, we will become irrelevant.
That is why Kerten Hospitality has gathered a team of GenZ-ers to drive our sustainability programme. They are intensifying our collaboration with hotel schools, developing case studies and looking at how we can really make a difference in everything from waste management to re-using rainwater and maximising the use of solar.
Significantly, this team has grown up with smartphones, maintains a focus on health/wellness and prefers authentic experiences, shopping at bio farms and drinking vegan smoothies. Their lifestyle preferences have shifted the sustainability agenda in a meaningful way. For instance, our projects empower guests to contribute to the wellbeing of local eco-friendly farms and communities, engage in volunteer travel or bee and turtle saving expeditions, along with the implementation of savings for sustainable-related initiatives.
These initiatives give voice to the New Generation and this is what we believe will set us on the right path to sustainable solutions.
The decade that is about to start is going to be a decisive one for sustainability. A shift in priorities seems therefore unavoidable, firstly for ethical reasons but also because it is going to be demanded both by stakeholders and consumers. On the other hand, I don't see the fact that tourism is responsible for a large share of carbon emissions as a deterrent to traveling itself. Instead, statistics show that Millenials are the generation driving growth in the hotel industry and that Gen Z isn't far behind (source: Expedia).
People are traveling and will continue to do so, but we can already see that they are becoming more and more mindful about their choices and more aware of their footprint as travelers. Sustainability will also be high on the agenda of political leaders and, as a matter of fact, will also play a big role in the choices regarding urban development, driving decisions of municipalities and investors. As a hotel brand, sustainability needs to be top of mind both on a development and an operational level.
What we notice at CityHub is that modern generations tend to have large travel experience and are generally aware of their environment and feel responsible for the footprint they leave behind. We try to facilitate these travelers to meet their needs by developing hotels that include environmentally conscious choices and a positive social impact as main values. One of our core principles is to enhance existing buildings in our target cities in a smart and effective way. Thanks to the space-efficient design of our sleeping units (Hubs), we manage to repurpose vacant buildings for which there is no other function. In this way, we can develop hotels with relatively low energy consumption and maximise the use of limited free space in the city. Additionally, we make sure to use the most updated technologies in terms of energy efficiency and to reduce waste to a minimum, for example, in case of need, our Hub can be disassembled and reassembled, making it fully recyclable.
We are aware that there are still many opportunities in the field of sustainability and that, as a brand that wants to be future-proof, the pressure on making impactful changes it's high. Therefore, CityHub is committed to improving its sustainability strategy and making it a driving factor in decision making for both our development and operational strategy.