Hospitality Supply Chains: Massive footprint or a force of good?

Question

Slowly but surely, supply chains and procurement practices are taking their rightful place on hospitality's sustainability agendas. For too long, the negative environmental and socio-economic impacts linked to the industry's procurement practices have remained unnoticed, overlooked and, ultimately, accepted. Whether food and beverages (F&B), furniture, fixture and equipment (FF&E), operational supply and equipment (OS&E), utilities or services, there is room for improvement in every stage and in every area. In a highly competitive market such as the hotel industry, decision are often driven by cost efficiency. As a consequence, supply chains are often oriented towards the lowest wages and cheapest materials, especially in regards to OS&E and FF&E. What are the key objectives steering procurement practices in hotels today and tomorrow? Which measures have shown great results and how can improvements be tracked? What does a sustainable supply chain management mean to you and your organisation? And, what role do guests play in supporting sustainable procurement practices?

Franziska Altenrath · Answer

It is exciting to see first attempts of hospitality procurement moving away from a mere risk-driven CYA approach to more holistic, impact-driven initiatives. Procurement strategies should be aligned with company sustainability strategies. Procurement can contribute to sustainability KPIs and improve the guest experience along the way. Supplier dialogues usually show great results and longterm, trustful relationships help amplify a partners sustainability commitment. However, sourcing has to become smarter and more daring as well. Tests with new, innovative suppliers should be conducted. Certificates can give orientation, especially in complex supply chains such as textiles, paper/wood or building materials. Capacity building plays a major role to enable procurement professionals to understand suppliers, products and their impact and, ultimately, make informed decisions based on the usual criteria as well as sustainability.

Randy Durband · Answer

Buyers of hotel space and land transport services, whether for corporate travel or leisure travel, seeking sustainable suppliers can either conduct massive analysis of the self-made claims of individual suppliers or they can turn to external verification programs of sustainability claims. No such scheme matches the rigor and global reach of the framework GSTC has in place to rigorously accredit Certification Bodies for credible auditing and certification-decision procedures. Major brands in both the corporate travel and leisure travel space that have studied the framework are now making firm plans to implement the framework. The approach works for any scale of operation, whether contracting a few or hundreds or even thousands of hotels and land transport providers.

Xenia zu Hohenlohe · Answer

Supply chain management allows a hotel to have a much wider impact than through its operations alone, since it links to many other key topics such as waste management, human rights or carbon emissions. Furthermore, hotels can address many of the SDG's through responsible purchasing. Therefore procurement is always one of the core topics in the sustainability strategies we develop for our clients. To address sustainability with hotel suppliers (or as well their service companies or partners), the focus should lie on creating a dialogue between suppliers and hotels. Both existing and new suppliers should align with the hotel's sustainability efforts and working towards this together with them has proven fruitful. For example, one hotel group was listed to give feedback in a crucial stage of the development of a new product from a worldwide known coffee supplier. Which shows that communicating your sustainability goals to your suppliers, helps them in turn focus on developing innovative sustainable solutions, In several instances we also witnessed a push for a wider market introduction of existing eco-products.However, having a concise strategy for sustainable procurement is vital. Procurement choices are to be made among a variety of product categories such as F&B, soft furnishings, technical installations to name just a few. Furthermore, in the case of refurbishments and new openings, a hight number of procurement choices need to be made in a restricted timeframe. The procurement teams therefore need to have the right tools and processes in place to assess suppliers and need guidance on how to make the right decisions.Making progress on sustainable procurement can take time but is often very rewarding, once the efforts are done. Firstly, many procurement choices are directly visible to the hotel clients and products which are for example made locally or from sustainable materials provide a great basis for story-telling. Thus, procurement choices can also change how a hotel is perceived. Secondly hotels can celebrate progress alongside their suppliers. And last but not least, sustainable procurement will influence the hotel's sustainability credentials in the long run, through minimization of waste and reduction of the annual green house gas emissions.

Arjan van Rheede · Answer

Garbage in = Garbage outGlobal supply chains are causing a disconnect between producer and consumer, resulting in an environmental and social disbalance. Analyzing the material flow in a hotel makes you realize that carefully assessing what materials go in is very much defining the sustainability impact of a hotel. Creating such an input – output balance is helpful to assess which products are creating a negative or positive impact. Although this is easier said than done.Deciding what aspects need to be improved is complicated, because how to measure its impact? And what aspect of sustainability or circularity is most crucial or most valued by the company or guest? Hotels might not have access to the Life Cycle Assessment (LCA) of the product. Suppliers can be a crucial 'man in the middle' in this respect. They can help and show alternative solutions (or rethink a service). Currently the exchange between these two groups is limited, but it does have great potential. Active exchange between hotels and suppliers shows that both parties are willing to act.If hotels have clear procurement processes and rules, sustainable decision can be better secured in the organization for instance by defining requirement on local sourcing, use of primary, secondary and tertiary packaging. Or a ban on some certain packaging!The saying: 'Garbage in - garbage out' is also true in this context and obviously not fitting our notions on Circularity.

JoAnna Abrams · Answer

The Hospitality supply chain is a force for good when there is collaboration, clear goals, transparency, and an ROI for all. The Power of Measurable Performance Ten years ago, Marriott International CEO Arne Sorenson set forth the goal of “greening the global supply chain” - a carefully chosen method to foster continuous improvement and collaboration. Led by MindClick, almost 30 organizations including FF&E suppliers, design firms, purchasing companies, the U.S. Green Building Council, sustainability consultants, and Marriott came together to develop and implement a standardized framework and rating system. Based on globally recognized standards, the resulting MindClick Sustainability Assessment Program (MSAP) measures every aspect of a product's lifecycle through the lens of environmental and social responsibility. Today almost two hundred FF&E and Architectural Building products vendors and their products are rated through MSAP. Covering materials, chemicals of concern, carbon emissions, circularity, fair labor and more, MSAP ratings are driving product innovation, efficiencies, cost savings, and a positive impact. As part of their CSR goals, Marriott is striving for 95% of the FF&E products specified for their brands to reach the highest level of rating in MSAP by 2025 - a goal supported by Marriott's vendors, design teams and franchisees.. The Power of Ratings Ratings serve as a powerful information tool. Data is presented in ways that fit easily into business processes - creating design standards or bespoke designs, specifying and purchasing products, and renovation and new construction practices. Designers and purchasers have an efficient way to consider sustainably sourced materials, carbon reduction, waste reduction, circularity, fair labor and human rights, and more in the decision process. Just as price, quality, lead times, and design aesthetics can be compared, so too can environmental and social impact. Adding impact measures to the decision process creates a competitive environment, encouraging innovation, and limiting cost increases. PVC free vinyl wallcovering, use of blanket wrap in place of packaging, take back programs to eliminate waste, and flooring that sequesters carbon are just a few of the many examples of innovation, efficiency, and positive impact. The Power of Impact Purchasing Brands and their franchisees are facing stakeholder pressure to demonstrate ESG (environmental, social, and governance) leadership with credible data from their supply chains. As a result, design and purchasing decisions are no longer solely based on aesthetics, price, quality, and lead times. Shared stories of product impact and innovation are proving to be powerful and effective marketing messages for attracting and retaining guests, and the supporting data and analytics are satisfying investor expectations. The transformation occurring in the supply chain is a force for good business.

Maribel Esparcia Pérez · Answer

As the travel industry blossoms from the COVID pandemic, we have a unique opportunity to establish relationships with other like-minded businesses and leaders (such as Bcorp certified companies). Hospitality supply chains should not encroach on ecosystems or communities, locals health and safety is prioritized, companies pay the right taxes in the right place at the right time, employees salary is at least a living wage, and they are subject to fair employment terms, any form of discrimination is eradicated, stakeholders concerns are actively solicited and transparently addressed, local biodiversity is protected, and the activity supports local communities to thrive (local businesses, population have access to food, water, energy, housing, education, and healthcare). We can reduce risks and incorporate a regenerative approach in Hospitality by creating alliances (e.g WBA, ACT), establishing strategic partnerships, and implementing technology. A great example is blockchain technology to improve product traceability, smart contracts, employment conditions (e.g Vechain, SustainChain), environmental protection, human rights risks due diligence verification, and third-party certification The aim is to have operations that generate net-zero GHG emissions, hospitality activity restores ecosystems, and ensures an inclusive, safe, and fair livelihood for communities, employees, and society.

Andreas Koch · Answer

Indeed, supply chains and procurement practices were under der radar for very long. Interestingly, this pandemic showed how interconnected we are: Any major event on the other side of the world is influencing our business/destination and the other way round. The more local, the more human, the more sustainable supply chains are, the more resilient. This is one main learning from this crisis. But there is so much more in it: Supply chains and procurement policies are - from my perspective - the most underestimated strategic business field in any tourism development. A systematic sustainable and conscious choice of suppliers not only minimises risks and increases resilience, but also inherit a fully underestimated potential to create unique marketing themes, unique employer branding and training opportunities and unique authentic experiences. We need a new quality definition in tourism: Quality should be defined as relational quality with all important tourism stakeholders, not only tourists. These should include the positive relationship with employees, residents and most important also suppliers. THIS is true sustainability, when we co-create the future of our tourism business and our destination with all these actors...and those, who have done this already, are the ones, who were least affected by this crisis. As such it is the best way to become successful and commonly create the future we all want to live in.

Lucy Brialey · Answer

Speaking from the point of view of wellness first destinations, resorts and residences, we are seeing a shift in and perusing a shift in attitude into what luxury means. This is being driven from the outside, by the consumer as well as from within the business through procurement policies, leaving little room for the old attitudes of cheap materials at the lowest cost.Wellness may be viewed as a niche area of the overall and larger hospitality industry, but it is also becoming one of the foremost reasons for travel.Objectives steering procurement must meet and satisfy both the consumer and the values of a brand. This invites the question, what are your brand values and who do you want to attract?The interpretation of luxury has also shifted. Seasoned wellness travellers are seeing less value in the linear make, take and waste approach. Opulence and waste are widely recognised by guests, which is bringing procurement and measurement of waste into sharp focus. This leads to a quality rather quantity approach.Lean procurement is then allowed to take place and can be communicated back as a 'well meant' policy of the destination that is respected and even admired by the guest.One of the most simple but effective measures that has been employed by wellness resorts is embedding local culture and community offerings into the guest experience rather than uniform and expected corporate values. This means that it has been seen more valuable to support local trade, even if it means a transference of the cost of this to the guest. Part of the wellness experience is authenticity, so this blends seamlessly and effortlessly into the business values.In some cases, meeting the guest needs and desire for unique experiences, even at extra cost to the business initially, brings profitable rewards in the way that a guest feels trust for the brand, relaxes and spends more time invested in the brand during their stay and will certainly return and refer due to aligned values.When an organisation reconciles the guest experience with the supply chain it simply becomes best practice.In any situation if a person understands the 'why' behind a decision it brings meaning and value to their experience, nothing is lost, everything is gained.Thanks to the acceptance and wider understanding wasteful business, sustainable values are inviting innovative business models into the hospitality space. We are soon to launch two pilot examples of circularity into the spa and wellness sector. Working with two Dutch companies on a circular model for hospitality furniture and linen. In both cases the items are made from re-blended and reused textiles such as cotton and mixed blends, ocean clean-ups, reclaimed wood and metal.Virgin materials are not used in any of the manufacture. Furniture and towels are not bought, used and discarded, but instead, reclaimed materials are used to make designer furniture and re-blended textiles and are then leased for an amount of time until they can be or need to be returned and reused again, replacing that which has been returned. This continues and is a great circular model which is cost effective and brings a story as well as upholding a genuine circular and sustainable economy model for hospitality.

Inge Huijbrechts · Answer

Management of a sustainable supply chain goes beyond suppliers recognizing a supplier code of conduct (minimum requirements). Supply chain visibility can be considered a challenge, perhaps not for tier 1 and tier 2 suppliers, but beyond further down the chain. Supply chain risk mapping analysis is required to understand your supplier's performance. For RHG criteria of assessment to include environmental sustainability, human rights, health and safety, community action, business ethics and sustainable innovation, research and development.Risk mapping i.e. with CSR platform providers such as EcoVadis allow a structured approach for supplier due diligence and allowing dialogues with new and existing suppliers to improve their sustainable performance, leveraging the influence of global supply chains. On the other end, RHG is assessed on its sustainability performance and supply chain management too, as supplier. Hence the importance not only from a sustainability point of view, but general business development of view.

Willy Legrand · Answer

There is disagreement amongst researchers on the overall share of embodied carbon over the hotel building's total lifecycle emissions, and estimates range between 30% and 70%1,2. The remaining emissions are the so-called operational carbon from the daily operations. Considering the ever faster cycles of hotel refurbishment, embodied energy (and carbon) in material and equipment results in a substantial carbon emission share of the overall building life cycle. And carbon is only a very small component of the socio-economic and environmental impacts linked to supply chain.The hospitality supply chain is complex and multifaceted, however, we see an increase in ratings of environmental and social impacts throughout the lifecycle of products. A greater transparency facilitates the decision-making process for hoteliers (beyond price, design, delivery schedule…) on the path to net zero carbon. Much of our hospitality infrastructure which was built for the Holocene that now needs to adapt to the Anthropocene.(1) ARUP (2021). Transforming Existing Hotels to Net Zero Carbon. Arup, Gleeds, IHG Hotels & Resorts and Schneider Electric. https://www.arup.com/perspectives/publications/research/section/transforming-existing-hotels-to-net-zero-carbon(2) Filimonau, V., Dickinson, J., Robbins, D. & Huijbregts, M. A.J. (2011). Reviewing the carbon footprint analysis of hotels: Life Cycle Energy Analysis (LCEA) as a holistic method for carbon impact appraisal of tourist accommodation, Journal of Cleaner Production, 1-14. https://doi.org/10.1016/j.jclepro.2011.07.002

Lucienne Mosquera · Answer

Buildings are responsible for 38% of global energy-related carbon emissions and 50% of all extracted materials.By 2050, the world's building stock will double, increasing the impact of our sector significantly. With a fixed and rapidly depleting carbon budget, every hotel – new, existing, small or large – will be challenged to meet drastic decarbonisation targets and rapidly tightening legislation to prevent global warming exceeding 1.5oC.The World Green Building Council strongly recommends that by 2030 all buildings operate at net zero carbon and all new buildings create at least 40% less embodied carbon – which will demand significantly higher levels of minimum compliance, comparable to EPC-B & A ratings for all stock (new or existing), or a BREEAM Excellent rating for all new stock. To close the environmental, social and economic gaps and protect our planet, people and economies, we must embrace a holistic systems approach to building design, supply chain and procurement practises and develop an efficient circular and regenerative construction and operating process. Life Cycle Assessment (LCA) measures a building's lifetime impacts and, at the same time, can quantify the impact of a single material in the building and operating process. It can significantly reduce the environmental impact of a building, especially if implemented at the beginning of the building project. LCA evaluates all building site design and procurement options to select the lowest impact choices and further identifies environmental hotspots, so that preventative action can be taken to reduce them. One-Click LCA has developed very practical and (cost) effective approaches to reduce the environmental impact of (hotel) buildings. Here are some of the most impactful ones:Do not build for the short term – anything less than a 60-year span is not worthwhile and sustainable. For example, if the service life is 25 years, the annualised materials-driven carbon impacts are 120% higher – potential carbon savings: 40-50%Avoid sites requiring soil stabilisation and deep foundations – potential carbon savings: 30%Choose a lighter or timber framework if requirements allow for it – potential carbon savings: 30%Choose low-carbon products: set clear requirements and select the right suppliers – LCA and BIM technology greatly simplifies and automate this procurement process – potential carbon savings: 10%Use thinner floor slabs and reduce both slab and envelope material use – potential carbon savings: 6%Do not build separate parking structures – potential carbon savings: 5%Avoid elements with limited value, providing mainly an aesthetic function, e.g. in floorings, ceilings or cladding – potential carbon savings: 4%Invest in durable solutions and materials, which means fewer replacements, waste and renovations/disruptions – potential carbon savings: 3%Incorporate design for disassembly and other circular economy principles - potential carbon savings: variableBuy local materials, wherever possible to reduce transport- potential carbon savings: variableReduce waste through careful specification and buying with takeback agreements- potential carbon savings: variableThese are some of the most impactful measures, but there are many more – which demonstrates that through good procurement and design - which has a knock-on effect on supply chains and procurement – a new hotel building can optimise its procurement costs and bring down its environmental footprint by as much as 75%.

Jonathon Day · Answer

The power of the choices we make when we purchase things has never been more evident. The pandemic has helped us all realize that where we spend our money makes a big difference – and “buy local” campaigns have helped ensure local businesses survive. Of course, hoteliers have even more ability than you and I to achieve sustainability goals through their influence on the supply chain. Hotel companies have long recognized their purchasing power and have managed supply chains to support corporate social responsibility goals. Several major brands have programs to ensure women-owned or minority-owned companies are significant contributors to the supply chain. Carbon reduction creates a new challenge for hoteliers. Many hoteliers have already committed to reduce carbon and increase energy efficiency in their daily business. Yet, these operational changes can only take us so far. Hoteliers must use their influence to stimulate system change. How do we change the system? From a broad perspective, three of the major producers of carbon are energy production, buildings, and transportation. To encourage systematic change, we must use the influence of our industry to change the way things are done. Hoteliers must encourage their energy suppliers to use renewables. We can encourage owners to adopt construction methods and architecture that ensure our hotels are built with sustainability “baked in”. We can support infrastructure initiatives that transition our transportation sector to green and renewable energy sources. At the same time, our industry must recognize the important role we play in our client's supply chains. Corporations, the drivers of business travel, seek to understand our contribution to their carbon footprint. There has never been more pressure on hoteliers to provide detailed information on our sustainability efforts. As supply chain partners, we must step up and improve our performance and report it transparently. Fortunately, as the marketplace demands this information, many of the largest brands are working hard to address these needs.

Marloes Knippenberg · Answer

The current tumultuous hospitality environment that has shaken up the industry has limelight-ed the fact that it is not mandatory to choose growth over sustainable value propositions and ESG-focused initiatives since a business can achieve both. The key to establishing a sustainable supply chain is to focus on Locality and the empowerment of the Local supply chain across the whole Ecosystem, verticals and engaged professionals. Firstly, the key is to do a company mindset reset starting from the ups-killing programmes for teams, to furniture orders, locally-produced amenities and sourced food. And secondly, address the mindset as a core pillar, a business need that requires full dedication by all divisions that would then trickle down to guests and their contributions.For instance, hospitality is dubbed as one of the largest food waste Ecosystems and on this front we have a lot of rethinking to do. Gone are the days of tireless buffet experiences, abundance of food waste and over-the-top varieties per meal. Now, the focus has shifted towards quality on the go with quantity taking backseat. Buffets are seated experiences, meals are ordered and tailored to palates to avoid waste and over indulgence. Farm to fork fresh produce from the local farmers markets not only support a healthier diet, but also contributes to the local business growth. This s how we make a difference – by showing we care for the people we work with, the suppliers we buy from locally and the Community of visitors, residents and guests who see how much we care. Then, they care in return.

Hospitality Supply Chains: Massive footprint or a force of good?

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