While the hospitality industry is committed to sustainability objectives, the task can seem overwhelming. What makes a property sustainable? How do you find a way to wow guests whilst also driving the sustainability agenda? What are the KPIs, what are the easy wins, is there a payback? Will leisure be as quick to demand ESG measures relative to corporate travel bookers?
Government and regulation of course have a role to play, for example Portugal’s tourism development strategy has social, economic and environmental sustainability at its core, says Rita Marques, the country’s secretary of state for tourism. The government is trying to incentivise investors to follow its sustainability roadmap while also financing projects with a positive impact – and not forgetting that sustainability needs people to drive it, too.
“We might have a vision, but if we don’t have people of the sector with us, then we might have a problem,” explains Marques. “If you want to build a new hotel in Portugal, we are giving you the tools to be more sustainable, meaning the hotel will have more support from the government if you have energy efficiency systems or if you have a local community engagement programme.”
The organisation is working with 80 companies, which will report on certain ESG KPIs, information which will be published to a dashboard which Marques says will be public “very soon”, allowing companies to compare with their peers as well as the wider tourism and travel sector.
A natural transition
Alexander Haas, COO of Aethos Hotels and Limestone Capital, feels that there are market forces driving change much quicker than government regulation – staff shortages are forcing businesses to treat and pay their staff better, while energy prices are forcing hotels to be more energy-efficient, for example.
“Capital will be decided based on ESG, your employees and your customers will decide based on ESG – the right drivers are there and obviously it makes sense to be at the forefront rather than catching up,” he says.
“When we talk about conscious travellers, we’re not only talking about sustainability. These are travellers that know that their doing has an impact and also know what’s happening at a local level. They don’t want to go into a box that’s secluded from the local community, they want to engage with the local community. That happens through F&B that locals also go to and experiences with local businesses. That also means watching the environment.”
Limestone Capital, a property investment firm targeting the real estate and hospitality sectors in the European Union, runs its five hotels through Aethos and acquired the former Mar Y Pins hotel in Mallorca last year with plans to relaunch it under Aethos. The company has been retrofitting the property to make it more sustainable, with the next step improving operations in the long-term. Haas says this is made easier by being an owner-operator that can control the carbon output of construction, which often makes up a huge majority of a building’s carbon emissions.
Embedding a culture of sustainability
The Portuguese government has also launched the ‘hotel of the future’ project, allowing start-ups to use a working hotel to test technology, giving them the means to showcase their products and how they can support hotels’ sustainability journey in a real-world test bed.
However, investors focus too much on technology and not enough on behaviours and culture at their own peril.
Sustainability, says Ramón Aragonés Marín, chief executive officer of NH Hotel Group, is a matter of philosophy: “It goes beyond the numbers, it’s the whole business.”
Miquel Ramis Munar, development manager of Garden Hotels, agrees. For everyone in a business to buy in and contribute to its sustainability journey, he says, that motivation must come from the very top.
“Sometimes it’s not about more investment or capex, it’s about the philosophy in wanting to change things,” he suggests. “Even though we haven’t invested tons of money into sustainability, we’re doing important projects, processes and the whole company being focused on making a change.”
Garden Hotels received Aenor certification for its circular economy strategy last year. Projects have included composting organic waste, compost which is sold to local farmers and exchanged for their ingredients, which are then used in the F&B operations. The group has also removed in-room, single-use plastic toiletries and replaced them with refillable organic toiletries produced by a local company.
The business continues to measure its organic, paper and plastic waste and seeks to reduce this year-on-year – it is even in the early stages of using IoT to measure this – while also focusing on local sourcing of products to reduce mileage and support local businesses.
Marques agrees that cost pressures need not be a hindrance to hotels’ sustainable goals because ESG includes people and culture, while Aragonés Marín says that sustainable investments NH Hotels have made have also made the group more efficient.
Haas adds that sustainability-geared capex makes sense if you’re an investor with a long-term perspective. “Because we look at the 30-year window, it’s very easy for us to make that decision,” he explains.
Aragonés Marín says there has been “huge change” since NH Hotel Group was acquired by Minor International “because they are really committed to sustainability”. The group, which reported a full-year revenue increase of 54.6% to €834 million in 2021, is aiming for a 20% cut in its carbon emissions by 2030 and has a sustainability committee that reports to the company’s board.
“It’s more than a commitment, it’s like a KPI in our organisation that everybody has to respect,” says Aragonés Marín. NH Hotels was also a member of the working group supporting the World Travel & Tourism Council’s hotel sustainability basics criteria.
Providing a standout but sustainable guest experience
How sustainability then translates to the guest experience can be a double-sided challenge. “Our clients are looking for a sustainable experience, and if you don’t have that, you lose competitiveness,” points out Aragonés Marín. An enjoyable stay “should be compatible with a sustainable strategy”, he adds.
However, Haas suggests it remains to be seen whether the consumer “really, really cares” about the environment enough to not be put off if a hotel’s sustainable policies impact their comfort in any way.
All those quoted in the article appeared on stage at the Resort & Residential Hospitality Forum held in Portugal between October 17 and 19, in a session called: Sustainability and Governance: Setting, Measuring and Tracking KPIs for Sustainable Leisure.