The race to decarbonise old hotels

While ensuring new hotels are built sustainably, investors must also consider the carbon emissions of their existing properties if they are to hit their net zero targets.

80% of the buildings that will exist in 2050 already exist, including hotels, meaning decarbonising existing properties is just as critical as creating low-carbon new builds.

“The footprint of the likes of restaurants and pubs, upwards of 80% is in the supply chain. Those are also important for hotels. But what we’ve seen for hotels is that a substantially higher proportion of the footprint is their Scope 1 and 2 emissions,” said Bob Gordon, director at UK-based Zero Carbon Forum, whose members include IHG Hotels & Resorts, PPHE Group and the Lowry hotel in Manchester.

He said the narrative has shifted in recent years with the largest contributor to hotels’ carbon footprint also the second-largest operating cost for hotels: energy, prices for which have skyrocketed this year. He said a recent refurbishment of a 20-year-old property with inefficient gas-fired heating and cooling systems was set to see a five-year payback from the installation of an electric system, but following the price increases in electricity, this is now set to pay for itself in just two-and-a-half years.

Accor’s emissions target

Hotel group Accor has 5,300 hotels worldwide, most of which are owned by third parties under management or franchise contracts, and the business is targeting a 46% reduction in emissions by 2030 and net zero by 2050.

Initiatives to reduce emissions have seen its Novotel Lausanne Bussigny in Switzerland install a system that recovers lost heat, for example from cold storage, which meets 70% of the property’s hot water requirements in the summer and 20% in the winter.

Meanwhile, its Pullman London St Pancras property has implemented a smart building management control system which adapts the air conditioning and heating according to the occupancy of the hotel and the flow of people in certain areas, monitored through movement detectors. Accor has estimated that heating, ventilation and air conditioning (HVAC) accounts for anything from 27% up to 50% of a hotel’s energy usage.

Both Accor and IHG Hotels & Resorts – which is targeting a 46% reduction in emissions from the energy used across its owned, managed, leased and franchised estate by 2030 – have established audit partnerships for hotel owners to make use of.

“They have a feeling that we are adding layers of cost increases, so we just need to tell them that what we are asking them to do is not that much more money, very little, but it will impact their energy big time,” says Accor’s Antoine Bourrissoux, design and technology services senior vice-president for multibrands (midscale, eco and premium) Northern Europe.

Asset value should be another consideration, with investors at the International Hospitality Investment Forum (IHIF) in Berlin earlier this year warning of assets becoming stranded due to poor sustainability ratings.

“As a hotel group, one of the key things you will be focused on in your strategic thinking is the value of your asset,” said Gordon. “A really inefficient hotel is a less valuable asset. Not only is there that simple ROI calculation of ‘how much energy am I using, if I make those changes, how much will I save on my bills?’ you’ve also got, ‘what will the value of my asset be as a result?’”

Financial support

IHG is establishing third-party partnerships to support its hotels to secure financing to make energy-saving alterations, and a spokesperson said this and working with governments to provide incentives such as tax breaks for measures with longer payback periods were “key”.

However, owners can of course also be limited by regulations, said Gordon, highlighting that some walls can be difficult to insulate depending on when they were built, while rules for heritage properties are extremely stringent. In this instance, he said, the focus needs to be on behavioural change – encouraging guests and staff to minimise energy usage.

IHG has developed training for general managers on how energy is typically used at hotels and what behavioural changes can be put in place to reduce usage – while also starting to make energy conservation measures part of its brand standards, beginning with items that pay back within a five-year period, such as LED lighting, aerated shower heads and high efficiency faucets.

“If you have a large estate and a small proportion of that is heritage building, then that is a small proportion of your usage,” added Gordon.

“You could spend a lot of time trying to fight that system when actually you can only go so far. Or you do what you can do in that building and go on to do what you can do in the next building. Our line of advice is: net zero is the process of getting as far as you possibly can, and offsetting the residual emissions that you can’t touch. In a heritage building where not only do the regulations prevent you from acting, but the building itself, those are the kind of emissions we’re talking about.”

Impact assessment

In Northern Europe, Accor is focusing on supporting the 20 hotel owners that represent 55% of the group’s carbon footprint, as well as its properties in countries such as Germany and the UK where the group has some of its bigger, premium properties, which may have a bigger carbon footprint due to having a spa, for instance.

“I don’t say we forget about the others, but that’s where the impact can really be seen,” said Bourrissoux. “If we can just act on the 20 clients and their hotels, we can quickly achieve maybe 13% reduction of carbon footprint, so it’s really massive.”

A spokesperson for Whitbread, which owns the Premier Inn hotel chain and more than 1,200 hotels and restaurants across the UK, said the business was focusing its efforts on scalable projects which can be applied to many sites – older and new – “to give a greater impact and sooner”.

This has included improving the efficiency of the boilers in 425 restaurants, resulting in an approximately 10% reduction of gas used for heating, as well as the installation of solar PV panels across more than 200 sites, generating around 4GWh of electricity per year to help reduce its energy consumption from the grid.

But ultimately, Gordon highlighted that a comprehensive net zero strategy for hotel properties must address all areas, including the fabric of the building, technology and behavioural change: “If you don’t tackle all three of those things, then it’s only half your strategy.”