One of the most pressing issues facing the hospitality industry today is the implementation of sustainable and eco-friendly practices across the supply chain. However, industry stakeholders say one of the biggest challenges in this regard is navigating a dense "jungle" of regulations, advisory platforms, and potential greenwashing.
A practice unique to the hospitality industry is regular renovation of interiors, which happens every 5 to 7 years despite studies showing that after about 5 to 6 renovations, the embodied carbon from the interior renovation is about equal to the embodied carbon of the architecture. With 80% of Scope 3 emissions coming from the supply chain and the huge amount of waste these renovations produce, the hospitality industry faces some big challenges connected to supply chain - all the products that go into the hotel.
At the roundtable discussion titled “Enhancing Hotel Asset Value through ESG across the Supply Chain” held at IHIF in Berlin and hosted by MindClick CEO JoAnna Abrams - with participants including representatives from Accor, Hilton, Highgate Hotels, Kaldewei, Interface, Drees & Sommer, Goddard Littlefair, Studio Moren, and Professors Willy Legrand and Maribel Esparcia Pérez – industry stakeholders including owners, asset managers, architects and suppliers stated one of the primary challenges on the road to net zero is the labyrinth of regulations and advisory platforms. They stated that this often makes it difficult to discern what is truly relevant.
“The biggest challenge is really this jungle of experts and knowledge out there and how to identify who’s relevant and will support my pathway to net zero or even to net positive,” a member of the roundtable noted.
An attendee highlighted the essential role of consultants in helping clients make sense of this confusing landscape. They stated that as intermediaries, consultants can provide a reality check and verify who is genuinely contributing to the pathway towards net zero carbon emissions, and who is merely "greenwashing".
The need for clear, transparent and reliable data to guide decision-making also emerged as a common theme. Stakeholders present called for a standard way of comparing assets and projects, while acknowledging the challenges in relation to how to measure diverse range of properties located in various regions, each with unique sustainability needs.
“The ability to understand information and to show clear metrics is the real issue. Beyond that, being able to measure one asset versus another; having a standard way of thinking where you can compare different projects would be incredibly helpful,” one attendee said.
They added: “But when you’re talking about a property that’s in the five star segment, it’s very different from a hotel in the two star segment in terms of what you’re able to do from an economic perspective. And so there can’t be a one size fits all approach. Also not every location is built equally and there’s a lot of difference throughout Europe in terms of building a sustainable product that meets everyone’s expectations.”
Members of the roundtable also called for greater use of the hospitality industry's influence to drive change at a government level and in supply chains. They further emphasized the need for the industry to leverage its power to influence owners, and suppliers towards more sustainable practices, also stressing the importance of sharing information and having open conversations with suppliers about sustainability.
They added that real collaborative effort between designers, suppliers, brands, owners, and operators is needed in order to make any transformation possible, laying emphasis on creating a common language and understanding the needs of stakeholders across the value chain to encourage more productive conversations.
One attendee proposed that ‘Three I's' — Innovation, Information, and Investment — be shared across the industry, calling for new technologies, clear information about these technologies, and understanding by investors of the criteria hotels must meet.
Designers present also shared their perspectives, urging a rethink of hotel usage and design. Design, not only in terms of materials but also in terms of hotel use, was identified as a crucial factor in achieving ESG goals. The minibar was used as an example. Being the second biggest point of energy consumption in a hotel room after air conditioning, was there a more eco-friendly/less carbon-intensive solution that would continue to keep guests satisfied?
There was consensus on the need to be proactive in implementing sustainability strategies, rather than simply following regulations. Participants also stressed that the industry should question established norms and processes to facilitate more sustainable operations.
“We need to not just run behind the change of regulation. We need to do the opposite and be proactive. We need to push even more. We need to really change the way we design our hotels, rather than just following regulations.”
They noted that without such changes, the attractiveness of the hospitality sector could be seriously undermined.
Green financing and structured financing were identified as essential tools for supporting sustainability initiatives. However, green finance requirements were flagged as a common challenge due to their complexity.
“Many finance companies have different requirements and we don’t understand what they need from us. So I think there needs to be a simplification and demystification of green finance requirements,” a member of the roundtable said.
The need to communicate a compelling story to consumers was also underlined. Participants agreed that telling a compelling sustainability story to guests is vital, noting that while sustainable initiatives are becoming common behind the scenes, the hospitality industry often fails to package and communicate these efforts effectively to consumers. A well-told story about a hotel's sustainability efforts could enhance brand preference, increase bookings, and ultimately, deliver a healthy return on investment.
“It really has to do with the ability to tell a story that differentiates one property from another which reflects much more than “decline housekeeping and hang up your towels”, which is typically the story that the consumer sees even though there's tremendous work going on behind the scenes. Does the consistent guest understand how the changes that have been made are in fact a better experience for them? No.
We're not doing a good job in this industry of telling a story. When we do that, you do get more heads on beds. In a research study, consumers said that knowing a hotel went out of its way to choose products that were better for them, better for the planet and better for the community, made them feel better about their choice of staying with the hotel, adding that they would return to that hotel and recommend it to others,” an attendee noted.
The most important takeaway, however, was a reminder of the long-term stakes. If a business model is not sustainable in the long run, assets will lose value. Hotels will lose bookings, corporates will refuse to sign RFPs (Request for Proposals), and investors will look elsewhere.
Finally, attendees agreed on the need for hotels to embed sustainability in the DNA of their operations. From supply chain management to hotel design through to guest stays - every aspect needs to be examined and reimagined in light of the sustainability challenge.
“We can reach the objective if everyone in the supply chain works together. It’s also really about questioning everything we’ve been doing. The most important part is rethinking every process in whatever we do.”
The editorial staff had no role in this post's creation.