Responsibility around sustainability
Positive press aside, sustainability can help hoteliers boost their bottom line, gain a competitive edge and keep the socially aware guests coming back.
By Vinita Bhatia
Sustainability is the green elephant in the room that perplexes hoteliers, owners and developers. The metaphorical pachyderm has been around for a while now, and many hotel chains felt they had done a good job by conserving water (remember those cute cards asking guests not to send the hotels and linen for laundry daily) and installing a sewage treatment plant, using LED lights throughout the property.
However, the green movement that started more to placate environmentalists and guests has gained fiscal ramifications, forcing all stakeholders in the hospitality business to sit up and take notice. After all, cost is always a driving factor to reduce overall spends in any hotel project, and if the adoption of sustainable design solutions and practices can bring these costs down, then who would want to turn down the offer.
If truth be told, sustainability is at the core of all projects, not just hotels, as it calls for efficient use of resources, right from the construction phase to the time of operations. Keshav Baljee, MD of Spree Hospitality pointed out that as resources are finite and commodities and energy costs typically rise over time, it is best to control these. “Sometimes, you may have to incur a higher capital expenditure, but it typically pays off in terms of lower operating costs. The up side is that sustainable products typically attract a socially-conscious guests, who are willing to pay a premium for properties that don’t damage the environment! This leads to higher revenue too!”
FROM GROUND UP
While the chief goal of green buildings is to reduce environmental impact, hotels built with sustainable methods and materials use lesser energy, water, and sometimes produce, all of which have a cost attached to their installation, use, management and upkeep. By opting for sustainable practices, hotels can secure the investments made during the design phase to achieve better ROI.
According to Nandivardhan Jain, founder and CEO, Noesis Capital Advisors, an upfront investment in sustainable methods and materials might increase a project’s cost by 1.5% to 2%. However, lower utility cost and better hotel environment with natural light and quality air gives the same property the leverage to charge the guest a little more. “It also helps to build occupancy faster as compared to non-green hotels, subject to other market variables. We have observed the performance of green hotels F&B outlets and banqueting space is better than its competitive set,” he noted.
Leading hotel chains have already been pursuing sustainable hotel management practices to protect the environment and as well as their profitability. AccorHotels, for one, has been actively following a sustainable development programme for two decades. As a part of this Planet 21 initiative, all its existing and new properties are built with the aim to control carbon emissions to ultimately reduce its carbon footprint. For example, hotels are equipped with solar or wind energy equipment to heat water. This simple measure leads to saving of operational energy consumption and costs thus, reducing carbon emissions.
Even indigenous companies like Ambuja Neotia Group have adopted environment friendly initiatives across all its projects. The company’s senior general manager, Vijay Shankar Dwivedi, said, “For almost a decade, we have been using LED fixtures, building management systems, low-flow plumbing fixtures, using heat pumps for hot water, low-e glasses and measures for low heat gain facade elements. Energy modelling is done and measures are undertaken to plan the orientation and fenestration, etc., to minimise the passive heat gain. These are some of the energy-efficient techniques that we follow in our hotel projects.”
juSTa Hotels & Resorts, which is a chain of 14 properties, has undertaken similar initiatives, which includes recycling of water, using solar and bio water heaters, using LED light bulbs and upgrading its software and hardware to reduce usage of energy resource as well as ensure efficient manpower management.
YOU REAP WHAT YOU SOW
While there is plenty of data available to demonstrate that sustainability offers good payback, it’s not always possible to justify the investment by looking at Excel spreadsheets or PowerPoint projections. The proof of the pudding, like they say, is in the eating.
Hence, we asked some of the industry leaders about the sustainability systems or processes that they have installed to monitor and control energy performance and the value it has offered them.
IHG has an all-encompassing programme called Green Engage. “Building on the progress we have made in recent years, we have set new targets to deliver our three year ambitions that is, to further reduce carbon footprint per occupied room by 6% to 7% and launch six water stewardship projects between 2018 to 2020,” Bhalla optimistically claimed.
Spree Hospitality is evaluating some IoT-based devices currently, but has nothing major to announce as of now. It is also using various contemporary tools and technologies to ensure that the energy performance is optimal at its hotels.
Leisure Hotels Group has adopted a MIS for power, fuel and water consumption, and has a process to control the same in place at its properties. Solar Water Systems are placed across all properties to avoid fossil fuel consumptions for heating gas heaters and gas tandoors in cold locations, which otherwise use wood or coal. “We have graduated to membrane-installed STPs for better waste water management. Composters are used in the forest zone properties and food waste is recycled for landscape development and fertilising,” Mehan added.
As a developer, Brigade Group, too, has become an environmentally conscious company. Arindam Mukherjee, COO, Brigade Group said, “We use LED lights for all areas without exception and also use motion sensors to save on energy. Dimmers are used in all public areas and solar panels are used to share utility loads. For HVAC systems we use VFD drives to save on energy and all our chillers are of high efficiency. All our hotels have rainwater harvesting (storage apart from ground water recharge). We carefully select energy-efficient motors to save on energy in the long run.”
Dwivedi too added that Ambuja Neotia Group has been taking small steps in energy optimisation initiatives at its upcoming hotels. This includes opting for virtualisation to reduce server storage space, which saves energy. “While renovating properties, we use microprocessor-based panels and ensure that the windows are air-tight and double glazed. These technologies are 10% to 30% more expensive, but with increasing adoption they will become more viable. Considering the capex and opex cost, we presume the payback period to be anything between three to eight years,” he added.
MAINTAINING A FINE BALANCE
While many understand and prioritize sustainability as their brand’s mission, often they have to deal with archaic mindsets that focus more on the budget and investment involved managing resource-efficient hotels. Talking about the main challenges that arise in sustainability in hospitality, Shiv Mehan, COO of Leisure Hotels Group said that some key areas in such cases include the availability of materials at certain locations, thereby leading to increased logistics and time taken to complete a project. “Finding experienced labour tends to get difficult, which means manpower has to be hired from distant markets. Similarly, if certain sustainable equipment is unavailable then it has to be procured from another region. In such scenarios, the initial capital investment is higher and this can have a bigger impact on the build time in leisure destinations than in cities,” he explained.
At time like these it helps to have tools that can measure the ROI on sustainable solutions, something that international brands have realised and have already invested in. Vivek Bhalla, regional VP, South West Asia of the InterContinental Hotel Group (IHG) explained that during the building or converting process, IHG involves the owner into its ‘green’ thinking. However, it cannot deploy sustainable solutions during this phase as the responsibility rests solely with the owner/builder.
“Once operational, we deploy a group-wide, innovative online environmental sustainability system that gives our hotels the means to measure and manage their impact on the environment. This tool is used by IHG hotels across the globe to manage and report their use of energy, carbon, water and minimise their waste, overall utility costs and environmental impact. Participation in the IHG Green Engage system is a global standard for all our hotels and the programme recognises their progress through four escalating levels of certification. Level 1 is a mandatory requirement for all IHG hotels. Hotels can achieve energy cost savings from up to 16% on average if they attain Level 3 certification within the programme,” he added. The system recommends over 200 green solutions and provides implementation plans to reduce the impact our hotels have on the environment. It also supports hotels in creating environmental action plans and targets and demonstrates the cost savings that can be achieved by hotels when they implement the action plans.
AccorHotels, too, has a measurable metrics where each sustainable initiative implemented is evaluated on multiple factors. “Some of these include Return on Investment (ROI), but more importantly the effectiveness of the initiative and also whether they result in any long-term savings,” said Darashbir Singh, director, engineering Services, AccorHotels. “They are backed by theoretical calculations and once installed are measured on site understand actual savings through various metering and biometric devices. One can calculate the actual returns while considering the costs, savings and consumption experience prior to and post implementing the initiative.”
THE ENTIRE ECOSYSTEM
The sustainability discussion requires a long-term investment mentality, which takes into account the building’s complete lifecycle from siting to design, construction, operation, maintenance, renovation and deconstruction. Most hotels have a building management system installed as part of the initial design process, which has eco-friendly modules built in. These monitor the energy efficiency processes incorporated at various build stages and also monitors consumption of resources like water and heat at key areas.
Elucidating about this, Mukherjee said, “All Brigade Group hotels have a BMS system installed that monitors various elements like heat pumps, which helps generate chill water as a by-product and thus reduces the load on chillers. The STP is designed to generate zero discharge into the municipal waste and electrostatic scrubbers save the air from pollution. Also energy audits are conducted and steps taken to further reduce if the need be after a problem has been identified. At Brigade we try to use local material as much as possible. Products are chosen after careful comparison of energy efficiency and which are low in maintenance. Monitoring of power consumption is a daily habit during operations.”
When it comes to conversion properties, especially of older building, embracing sustainability can be a bit of a challenge, as Ashish Vohra of juSTa Hotels & Resorts has realised. However, his team has been thoughtful enough to replace all the electrical and plumbing equipment, change all the lined to use more natural materials, better and eco-friendly furnishings, energy-saving electronic items in rooms and facilities as well as technological upgrades to the systems.
“The hotels launched in the recent years are involved from the project planning phase, so that we are able to collaborate with the builder and ensure strict adherence in using all the right materials that go into the building right from the stones, tiles, waterproofing materials, electrical equipment, plumbing, planning and designing of the space usage in the facility, placement of equipment and many other. We have a complete SOP document and customize it as per the project requirements,” Vohra claimed.
THINKING LONG TERM
Saying the green buildings offer better return on investment is over-simplifying sustainability. The fact of the matter is that these are the future. Keshav Baljee, MD of Spree Hospitality puts it more succinctly, “Green buildings will be future proof as the world is moving that way. If you’re constructing a hotel right now, and it is not future proof, you’re going to be in trouble in a few years when customer preferences and regulations will provide significant headwinds for conventional hotels.”
Talking about the long-term benefits of sustainable buildings, Singh from AccorHotels stated, “Green buildings are designed to minimise the overall impact on the environment through the efficient use of energy and water and the use of environmentally friendly practices during construction of the structure. However, in the long run, these buildings essentially enable cost savings, controlled emissions and overall reduce the carbon footprint.”
Bhalla too noted that the primary purpose is to reduce environmental impact; including reduction of carbon footprint, reduced greenhouse gas emissions, water conservation. However, implementing sustainable methods during development and then within the operations can lead to considerable cost savings through the hotel lifecycle. Talking about regulations giving sustainability a push, he noted, “Regulations can encourage more companies to build and grow their business in a sustainable way. Having said that, as global companies we believe that it is our duty as corporate citizens to proactively work to reduce the environmental impact of the industry.”
Regulations to adopt the Energy Conservation Building Code (ECBC) recommendations will compel more hotels construct green buildings. And once they do so, they are apt to realise the minimal efforts involved in adopting practices to save energy and, but which can help them reduce operational costs in addition to their carbon footprint.
Baljee emphasised that rules about STP plants, solar heating, garbage composting and the like have helped nudge the industry towards becoming more eco-friendly. “However, over regulating the industry isn’t the answer as smaller hotels are being rendered unviable due to regulations and poor civic services. Take the case of water – hotels have to soften it, filter it, then supply, treat and re-use it. How many plants can a hotel install and maintain these machines? We should call upon the civic bodies to also shoulder their load to ensure not just hotels but entire cities are green,” he suggested.
While waiting for the government to do its bit, Ambuja Neotia Group has set up the Neotec Hub, where it is encouraging innovators to come up with technologies and concepts that it can use in its projects. Dwivedi said, “We not only supports startups but also provide them a platform within the group to test the performance of their product.”
The crux of the sustainability discourse is that the conversation has to go beyond the bottom line. The stakeholders in the hospitality industry have to realise that it is a priority to their operational and development goals rather than an absent-minded post-script to be added to their balance sheet to placate folks in the know.