Eco-Certs Yield Unexpected Benefits in Cost Saving and Efficiency
Many hotels have sustainability certifications and it’s easy to think of this as one of those things you have to do just to match the competition. While there is some truth to that perception, it turns out that gaining an environmental certification has the unexpected benefit of encouraging guests to conserve resources. This seems to be part of the increased focus on conservation that comes with meeting certification requirements. A new study from Cornell provides a strong indication of the connection between “eco-certification” and hotel efficiency. What’s unusual about this study is that it analyzes the hotel’s own operational efficiency separately from guests’ activities. Surprisingly, it turns out that the two measurements sometimes go in different directions.
Rather than focus on just one of the many eco-certification programs, researchers Jie Zhang, Rohit Verma, and Nitin Joglekar looked at hotels that had been awarded the “eco-friendly hotel” designation by Sabre (www.sabretravelnetwork.com), as indicated by the “Ecoleaf” symbol on Sabre’s Travelocity site. This indicator is given to hotels that have earned any of several certifications, including LEED, Energy Star, Ecotourism Australia, and Green Tourism Business Scheme. Hotels cannot certify themselves in this program, and all certifications are aligned with the Global Sustainable Tourism Criteria.
Although nearly 5,000 hotels worldwide have gained Sabre’s eco-hotel designation, the researchers restricted their study to about 2,900 hotels serving a range of market segments in 49 U.S. states. Using data from PKF Hospitality Research (www.pkfc.com/research), the study matched Ecoleaf hotels with similar non-certified hotels to compare the efficiency of resource use in hotel operations and by guests themselves. The study measured expenses for water, sewer, electricity, and supplies used by the hotels’ rooms, F&B, maintenance, and engineering departments.
The green effect: saving greenbacks
In general, the eco-certified hotels have higher resource efficiency for both hotel operations and customer activities, as compared to hotels that are not certified. This is indicated by lower resource expenses both for operations activities and customer-driven factors. Although the studies did not have a goal of explaining the reason for this effect, we can guess that the certified hotels have tightened their scrutiny of all resource use, thereby cutting operating costs. With regard to guest expenses, either guests are themselves more careful in a hotel that is clearly “green,” or such hotels attract a type of guest who naturally attempts to conserve resources.
Things get complicated, however, when you start looking at hotels in different market segments. For one thing, the efficiency effect changes according to a hotel’s market segment. As we move up the chain scale (based on ADR), the guest expenses go down, while the operational expenses go up. At the same time, earning a certification has a much greater effect on operational savings for upscale hotels than for budget hotels, probably because upscale hotels have greater expenses in the first place. Likewise, the larger the hotel, the lower the operations efficiency (but the greater chance for savings).
One other factor that this study acknowledges but cannot take into account is that the various certifications have widely different criteria. This means that two hotels that have both qualified for some type of eco-certificate may be focusing on two entirely different sets of resource categories (and both would be listed by Sabre and Travelocity). Even given this “noise,” the fact remains that customers do notice when a hotel has been certified. Plus, when they are staying in an eco-certified hotel their resource usage seems to be restrained, in the spirit of that certification. Along that line, managers will want to be as transparent as possible about their sustainability actions, so that guests will notice and respond appropriately, both in terms of their own resource use and in terms of their patronage of the hotel.
What was your first job?
Picking green beans at the Cornell Agricultural Experiment Station
Who inspires you?
Anyone who has persevered in the face of adversity
What are your hobbies?
Bicycle riding and running
What technology excites you?
We live in an age of miracles that we can electronicallycommunicate, look up infor-mation, and so forth in a heartbeat. Medical advances are also quite impressive of late.
Words of Wisdom:
Whether you’re speaking of publishing or hospitality the answer
is the same, don’t let technology get in the way of being a mensch.
What is one other field that you would like to try?
Professional chef
Who would you invite to lunch?
Mark Twain & Theodore Roosevelt
Top movie/book:
Some Like It Hot
Favorite vacation spot:
New York Adirondacks, but I love the Grand Canyon, Crater lake, Acadia, and the Oregon Coast.
Rather than focus on just one of the many eco-certification programs, researchers Jie Zhang, Rohit Verma, and Nitin Joglekar looked at hotels that had been awarded the “eco-friendly hotel” designation by Sabre (www.sabretravelnetwork.com), as indicated by the “Ecoleaf” symbol on Sabre’s Travelocity site. This indicator is given to hotels that have earned any of several certifications, including LEED, Energy Star, Ecotourism Australia, and Green Tourism Business Scheme. Hotels cannot certify themselves in this program, and all certifications are aligned with the Global Sustainable Tourism Criteria.
Although nearly 5,000 hotels worldwide have gained Sabre’s eco-hotel designation, the researchers restricted their study to about 2,900 hotels serving a range of market segments in 49 U.S. states. Using data from PKF Hospitality Research (www.pkfc.com/research), the study matched Ecoleaf hotels with similar non-certified hotels to compare the efficiency of resource use in hotel operations and by guests themselves. The study measured expenses for water, sewer, electricity, and supplies used by the hotels’ rooms, F&B, maintenance, and engineering departments.
The green effect: saving greenbacks
In general, the eco-certified hotels have higher resource efficiency for both hotel operations and customer activities, as compared to hotels that are not certified. This is indicated by lower resource expenses both for operations activities and customer-driven factors. Although the studies did not have a goal of explaining the reason for this effect, we can guess that the certified hotels have tightened their scrutiny of all resource use, thereby cutting operating costs. With regard to guest expenses, either guests are themselves more careful in a hotel that is clearly “green,” or such hotels attract a type of guest who naturally attempts to conserve resources.
Things get complicated, however, when you start looking at hotels in different market segments. For one thing, the efficiency effect changes according to a hotel’s market segment. As we move up the chain scale (based on ADR), the guest expenses go down, while the operational expenses go up. At the same time, earning a certification has a much greater effect on operational savings for upscale hotels than for budget hotels, probably because upscale hotels have greater expenses in the first place. Likewise, the larger the hotel, the lower the operations efficiency (but the greater chance for savings).
One other factor that this study acknowledges but cannot take into account is that the various certifications have widely different criteria. This means that two hotels that have both qualified for some type of eco-certificate may be focusing on two entirely different sets of resource categories (and both would be listed by Sabre and Travelocity). Even given this “noise,” the fact remains that customers do notice when a hotel has been certified. Plus, when they are staying in an eco-certified hotel their resource usage seems to be restrained, in the spirit of that certification. Along that line, managers will want to be as transparent as possible about their sustainability actions, so that guests will notice and respond appropriately, both in terms of their own resource use and in terms of their patronage of the hotel.
What was your first job?
Picking green beans at the Cornell Agricultural Experiment Station
Who inspires you?
Anyone who has persevered in the face of adversity
What are your hobbies?
Bicycle riding and running
What technology excites you?
We live in an age of miracles that we can electronicallycommunicate, look up infor-mation, and so forth in a heartbeat. Medical advances are also quite impressive of late.
Words of Wisdom:
Whether you’re speaking of publishing or hospitality the answer
is the same, don’t let technology get in the way of being a mensch.
What is one other field that you would like to try?
Professional chef
Who would you invite to lunch?
Mark Twain & Theodore Roosevelt
Top movie/book:
Some Like It Hot
Favorite vacation spot:
New York Adirondacks, but I love the Grand Canyon, Crater lake, Acadia, and the Oregon Coast.
Glenn Withiam is the director of publications for the Cornell Center
for Hospitality Research. To download complimentary copies of any of the research reports from the Center for Hospitality Research, visit www.hotel
school.cornell.edu/research/chr.
