How Energy Efficiency is Resolving One of the Hospitality Sector’s Biggest Conundrums

Lindsay Jones
Lindsay Jones

Should you install that new rooftop solar array to cut energy costs, or construct a flashy new rooftop bar to attract new corporate clients?

For the longest time, the perceived tension between sustainability and guest comfort seemed insurmountable. But this is quickly changing, as more hoteliers recognize that sustainability measures such as energy efficiency drive new and significant value for hotels.

The next time you stay at a hotel, take a look around and take stock of all of the things that keep you content and comfortable: the lighting, the air conditioning, the ventilation and yes, even that rooftop bar. These are nasty energy hogs that create financial burdens for hotels and environmental burdens for the planet.

Indeed, the world needs hoteliers to step up their carbon-cutting game if we hope to meet the Paris Agreement’s ambitious aims of keeping a global temperature rise well below 2 degrees Celsius. According to the 2017 Hotel Decarbonisation Report, the hospitality industry will need to reduce carbon emissions by 90% by 2050 if the Agreement is to succeed.

That’s a tall order, but fortunately, more hoteliers are recognizing how sustainability and customer comfort are allies, not adversaries. And what’s more, we can reconcile the two using technologies we already have.

Energy efficient hotels will win the future.

The 2017 Hotel Decarbonisation report lists energy efficiency as the number one pathway for hotels to achieve decarbonization. That means approaches like Carbon Lighthouse’s Efficiency Production service can help hotels mitigate climate risks while creating new streams of financial value.

This month at the NYU International Hospitality Industry Investment Conference, our team was inspired to hear one of the hospitality world’s leading voices, MGM Resorts Chairman and CEO Jim Murren reaffirm what we at Carbon Lighthouse have always believed: sustainability is one of the most critical factors in hotel success.

It’s not just about reusing your towels — it’s about uncovering the opportunities that create real financial value and new chances to one-up competitors on customer experience. The dollar savings from energy efficiency, for example, can help finance renovations and updates that directly impact the bottom line. Meanwhile, improvements in data collection and analysis enabled by machine learning are helping hotel owners generate new value.

Let’s also not forget the fact that corporate contracts make up a major portion of hotel revenue. As hotels compete for corporate RFPs that increasingly demand good social and environmental stewardship, embracing sustainability across hotel operations is quickly becoming table stakes.

“Savvy hotel owners understand that sustainability is an investment, not a cost,” JJ Steeley, Carbon Lighthouse VP of Client Experience wrote recently on the Carbon Lighthouse blog. “Do it right and you create an asset, not a burden.”

Carbon Lighthouse talks data-driven value at NYU Hospitality Conference.

At the two-day NYU Hospitality Conference, more than 2,000 leading lodging executives, investors, developers, analysts and economists discussed the hottest trends in hospitality — from capital expenditure to demand segmentation and even President Trump’s Twitter habits.

The Carbon Lighthouse team engaged conference attendees on how taking a data-driven approach to hotel operations can open new sources of value while mitigating environmental impacts.

During a panel on design, operations and brand, our own JJ Steeley discussed how we helped Ohana Real Estate Investors, owners of the Montage Beverly Hills Hotel, create significant new value at the luxury hotel from Efficiency Production in the first year alone.

Co-panelist Helen Jorgensen VP, Design & Procurement at Host Hotels & Resorts, explained how the company views good environmental stewardship as a driver of financial value.

Since 2008, Host has cut its greenhouse gas emissions by 27% per square foot and achieved a 14% reduction in energy use per square foot — meanwhile avoiding nearly 40,000 MWh of energy through energy efficiency projects. And the company is just getting started.

Even artificial intelligence is getting in on the action.

According to a panel with Carbon Lighthouse VP of Strategic Initiatives Emma Bassein, who spoke alongside hospitality leaders, AI is helping hotels make better decisions across the board — and improving hotel asset value with data-driven operational practices.

Co-panelist Sourav Ghosh, senior vice president of Enterprise Analytics at Host Hotels & Resorts, pointed out that, while machine learning has been around for decades, the ability to process it is relatively new. This is critical because although acquiring quality data is important, we must parse it for context to make it truly actionable.

While hotels historically have perceived a conflict between sustainability and guest comfort, more and more are learning that the two can be complementary.

That’s great news for those of us in the climate-change-stopping business and, if there’s one sector primed for profit-driven carbon elimination, it’s hospitality.

You might not always be able to see sustainability, but you’ll know it when you’re cashing in on its financial value.

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