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Earlier this year the International Tourism Partnership’s Head of Programmes, Fran Hughes, attended the Cornell Sustainability Roundtable. Participants, including academics, consultants and global hotel companies, addressed current issues in sustainability reporting, benchmarking, the supply chain, and customer sustainability perceptions, as well as innovations in green operations.
Whilst at Cornell, Fran interviewed Eric Ricaurte on behalf of Green Hotelier. Besides from being one of the co-chairs of the roundtable, Eric has helped several global hospitality companies measure and report on sustainability, in addition to his 10 years of experience in operations and consulting in diverse nature and cultural tourism projects throughout Latin America.
Here’s what Eric had to say on the topic of sustainability in the hotel sector...
Having worked in sustainability within the hotel sector for over 10 years, what have been the big trends and changes over that period?
Well let’s make a distinction between sustainability in urban hotels and travel specifically for the purpose of enjoying natural and cultural heritage, which has certainly grown immensely this past decade. If you lump these two together then it can skew the perception. Within the industry however, perhaps the biggest change is the evolution of the corporate responsibility and sustainability departments within hotel companies, which now have developed comprehensive platforms and even at times report directly to top executives. These departments did not exist 10 years ago as they do today.
How successful has the hotel sector been in raising the profile of sustainability over the years? What do you attribute this success to?
Frankly, I would attribute it to two factors. The first is external stakeholder pressure, particularly investors and corporate clients or group clients. These have increased the requests for sustainability information from hotels. Investor relations and sales departments now get involved and the discussion has farther reach across hotel organizations.
The second is the accumulated knowledge of the returns on investment that can be made from efficiency projects that have environmental benefits such as reduced energy and water consumption. These save hotels money, and hotels have used these to promote their sustainability commitment. What’s interesting is that before these were often success stories of green teams at individual hotels, while now they’re also driven top-down and shared across portfolios.
How important is the measurement and reporting of carbon and other sustainable targets to this success?
Measurement and reporting serve several purposes, such as satisfying specific investor or client requests. But perhaps more importantly, they help institutionalize the topics and bring a similar rigor to the analysis we see in financial P&L. It moves the discussion from claims of ‘we are green, we care, we’re committed’ to ‘this is how we performed this year’, which is a fundamental change.
What are the best examples of measurement and reporting structures in place at the moment? How do they need to continue to develop and push the industry forward?
Well obviously the Hotel Carbon Measurement Initiative (HCMI) – and thank you International Tourism Partnership (ITP) for that! The best examples in terms of their success are probably the Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP). GRI helps because it addresses pretty much every aspect of environmental, social, and governance issues at a broad level and can serve as a one-stop shop for hotel companies to communicate their information. CDP is interesting particularly in hotels because companies often disclose specific energy efficiency projects and quantify the associated reductions, and this information can be pulled and shared across the industry among peers, even at the hotel level.
While GRI and CDP are helpful, they leave a gap in their focus as they are intended for company-level disclosure, while we need something that is equally effective at the property level. Up until now the structures for property-level sustainability have been focused on certification. But green certifications often lack the criteria of requiring external reporting of performance, and there are more types that furthermore aren’t as harmonized in their criteria, which makes this somewhat more difficult. And the issue of fair comparison arises more frequently and will require more industry collaboration.
What are the biggest challenges facing the hotel industry and its sustainable agenda at the moment?
Well ‘sustainability’ pretty much equals ‘challenges’ by definition, so I’ll just talk about one: One of the biggest challenges I see is how most hoteliers are still stuck within the archaic paradigm of approaching sustainability by only asking the singular question ‘will the guest pay more?’ and then dismissing the issue when we can’t come up with a clear ‘yes’ all the time.
There are so many more moving pieces right now within and outside the industry that are influencing the discussion, and so many types of programs and practices involved, but many don’t seem to connect the dots yet. This was the main question we discussed 15 years ago and it’s amazing how I still get that question as someone’s primary thought process on the topic today.
Nowhere else in hospitality are we that simplistic. For example, will the guest pay more for a guestroom with a flat-screen TV or a round shower curtain? Will they pay more for a suite? Will they pay more for wireless internet? And, which of all the guest demographics and psychographics and mass-customized market segments are we talking about? And which of these will they pay more for a linen/towel reuse program, a carbon-neutral hotel, a smoke-free room, a hybrid charging station, a healthy menu, or paperless check-out? Would a customer pay more for a grocery store that has an organic foods aisle, or to shop at a store entirely dedicated to organic and local foods? Will they pay more for a more fuel-efficient car? Will a hotel be willing to pay a higher premium to cover weather-related property damage? Will the guest be willing to pay more to travel during hurricane season? Will an investor pay more for a company with a high socially responsible brand image?
Obviously there is much more complexity now that we have to get everyone in the industry involved in the topic and break out of the myopia of only thinking about that one question.
How do you think that will be best achieved?
The quickest path to achieving this is building awareness and buy-in through different departments, as it’s bound to do. As client or investor requests become greater, as financial returns can be seen, as risks become more apparent, and as hotels become more innovative with their practices, this will hopefully shift the paradigm. Everyone needs to become familiarised, just as has happened with information technology. But for now we can all do our part, whenever you hear this question, please call that person out.
What would you say were the key findings from the Cornell Sustainability Roundtable?
One of the interesting discussions was that of the supply chain. As corporate responsibility and sustainability advances within an organization, they inevitably turn to their supply chains to identify risks and opportunities and to collaborate (or pressure). In the recent years hotels were engaged by large customers because they formed part of the supply chain of business travel. Now hotels are starting to evaluate their own supply chains, and as this becomes more holistic, methodical and institutionalized we’ll see some interesting outcomes.
What do you hope will have been achieved by the next roundtable, in 2013?
It’s hard to say since this space evolves and changes so rapidly. But I would just hope that we can continue to have more clarity and common understanding on key topics, get industry agreement on best practices and standards, and have more productive dialogue on the important issues. And by next year I hope to have at least 20% less people ask me ‘will the guest pay more?’!
For more information on the proceedings at the Cornell Sustainability Roundtable go to Hospitality Sustainability Reporting: Slow, steady progress