Energy consumption reductions are the key to hotel ESG targets

While the hospitality sector faces huge challenges in reducing its energy consumption and meeting long-term sustainable targets, energy consumption is a key element and hoteliers need to have a handle on how efficient, or otherwise, their hotels are.

That is the view of Zeal Hotels Managing Director Tim Wheeldon, who is at the helm of a business founded in 2012 to design more sustainable and energy efficient hotel buildings. The company is currently developing its latest iteration of Zeal Hotels and has signed an exclusivity agreement with IHG Hotels & Resorts for Exeter Science Park.

The hotel will be both companies’ first lifecycle net zero carbon hotel and is set to open in late 2024. The group recently obtained detailed planning permission for the 142-bedroom hotel and construction is due to begin in July.

“It’s a whole new challenge to build sustainably and we have been working on for the best part of four or five years. Historically you are working on a brand spec, trying to do as much as possible for as little possible. Now you have to take into account carbon and energy intensity usage, so you are balancing four factors,” says Wheeldon.

“You have to create something financially viable and repeatable,” he adds.

Wheeldon stresses that EUI (energy use intensity) ratings will be key to this. EUI basically measures the efficiency of heating and cooling a hotel building and once measurements have been taken – effectively the total energy use divided by the square metres of the establishment – and then plot the result on the CRREM Pathway.

This Carbon Risk Real Estate Monitor plots energy usage against the carbon reduction timeline, so operators can determine whether their hotels are above or below the line.

“Generally, in hotels at the moment some EUIs are coming out at 500-600, but the requirement for 2023 is 211,” warns Wheeldon. “We currently have an Ibis at about 200 and an Express at about 168. That’s fine for the next two or three years but we still have to work on that, because the curve carries on going towards the longer term targets.”

By contrast he says the design for the new hotel measures just 54.7.

“That means we are hitting 2044 targets two decades early, which is down to design such as adopting Passive Haus concepts and which means not using as much energy as normal hotels. Something we’re very pleased about,” he adds.

Energy consumption and greener power

Radisson Hotel Group Vice President of Business Development Matt Gross says the company is also focusing on energy consumption, both in terms of potential reductions and also in terms of sourcing.

“The target for the group is to be net zero by 2050, and at 50% by 2030. As part of that we need to develop projects that are green and certified,” he adds.

“Our key target is energy consumption and we will only achieve this target by moving away from fossil fuels. We are going away from gas as a heating tool, and are now based on electricity.”

Gross says that the company has traditionally had some flexibility around brand standards as it evolves its hotels and sustainability, which has meant that attempts to make its hotels more efficient has not been hamstring by strict corporate restrictions.

However, he says it is too early for the industry to say that developing more sustainable buildings will have a premium effect on either guests or investors.

“Increased costs are a big issue because sustainability increases costs,” he concedes. “We also need to ensure that our real estate is tradeable and liquid. We cannot yet assess whether there is a premium on sustainable buildings, or even a value deficit.”

Stakeholder involvement vital

One of those organisations instrumental in helping to set new standards is BRE Group with its BREEAM certification and Key Account Manager Andy Cotter-Stone says that his advice to any hotel group looking to develop a new, more sustainable hotel building would be to involve BRE and key stakeholders as early as possible.

“Stakeholder alignment is vital, everyone needs to be in the same playing field. We always recommend BREAM are involved from the start, the earlier the better,” he says. “In addition, everyone needs a long term plan.”

Cotter-Stone says that the organisation is seeing a lot of innovation in the supply chain.

“We do a lot of product testing and many manufacturers are coming to us for accreditation for products,” he adds.

Wheeldon agrees and says that the materials and techniques available are changing and improving all the time and recommends that long term partners are brought on board.“We had a local construction company on board from the start along with the engineers. It has helped throughout the process, which has been a little bit longer than normal. We spent about six months looking at cross laminated timber but UK building regulations restrict its use. We have gone for concrete instead, which is using 60% slag waste from steel manufacturing,” he says of the design and construction approach at Zeal.

New technologies and materials

In fact, the embodied carbon has proven to be less than for the CLT and he says that more alternative materials are coming along, although costs are increased for sustainable options, while planning restrictions can also have an impact.

UK regulations are pretty strict and pretty archaic. It is going to take a long time to get Building Regulations sorted out, which is quite frustrating. They and we are going through learning all the time,” he admits.

Wheeldon says that one of the key things in terms of driving change is education, and teaching people “what we are trying to do because a lot of people don’t understand”.

That constant evolution and the costs involved are undoubtedly going to create an ongoing challenge for investors and developers still grappling with just how green their hotels need to be, and whether future transactions will recognise a green premium in the prices at which more sustainable hotels trade.

All those quoted in the article appeared on stage at the International Hospitality Investment Forum (IHIF) held in Berlin between May 15 and 17, in a session called - Greenprint: Building Environmentally Efficient Hospitality Properties