Hotels in China must be more sustainable, says report

As development in China continues, hotels must be more sustainable

As development in China continues, hotels must be more sustainable

A report comparing hotels’ environmental footprints has found that China’s hospitality sector urgently needs to address its sustainability.

China is in the middle of the world’s largest programme of new hotel construction. Despite a marginally slowing growth rate, the country’s hotel development continues at a pace that would see at least three new 150+ room hotels open every day for the next 25 years. It’s estimated China currently has 2.7 million hotel rooms but that number is expected to grow to 9.1 million by 2039.

A new report from Cornell University’s Center for Hospitality Research has compared benchmarking data to extrapolate the high and low quartiles of Chinese benchmarks and applied them to hotels in development pipelines. The results have revealed the startling divide between the existing environmental footprint of hotels in China, and what they could be achieving with a more responsible and sustainable development plan. If hotels continue development at the current rate without implementing sustainability measures, the results could be environmentally devastating.

As hotel groups like Accor commit to zero carbon properties for all new builds and renovations, and others collaborate to reduce the environmental impact of the sector, it’s clear that the long term sustainability of the industry and the role of global hotel groups as responsible businesses is a key strategic driver for many, but that is not the case for many operators in China.

The report Environmental Implications of Hotel Growth in China: Integrating Sustainability with Hotel Development by Gert Noordzy, Eric Ricaurte, Georgette James, and Meng Wu, highlights the urgent need for hotels in China to build sustainability in at the development stage, something the Chinese government is keen to see happen.

The authors note, “China’s hotel growth carries substantial consequences in terms of increases in energy and water consumption, and an expanding carbon footprint and we urge hotel developers to heed the national government’s push for greater sustainability. The key is to include sustainability in hotel planning and design from a project’s outset.”

The report looks at the projected hotel development pipeline shown here.

Projected hotel rooms in China

Projected hotel rooms in China

Many of the groups building in China are ITP members and therefore understand the value and importance of including sustainability in their hotels but the report notes, “the majority of projects remain under control of smaller chains and independents. We suspect that these industry players would not have as strong a sustainability commitment as the international chains and may not incorporate the most efficient fixtures, furniture, or equipment standards in their hotel design.”

The report states, “China’s hotels consume more water and energy per square metre and per occupied room than those in other large countries. A comparative study of business hotels in Asia Pacific illustrating water use disparities reveals the scale of the problem. Hotel rooms in the United States consume on average 627 litres per occupied room, compared to 1,555 litres per occupied room in China.

“We see two cultural reasons for the disparity. First, owners favour lavish displays in public areas and lobbies that use high amounts of energy and water. Additionally energy and water conservation measures are not common practice in China, except in international and Asian-branded properties. That covers only 22 percent of the hotel supply in Asia. The remaining independent operators or smaller local chains tend not to apply conservation measures because sustainability is not always a priority, and because these firms have less access to capital for equipment upgrades and retrofits that would aid in energy and water conservation efforts.”

Since ITP’s own Water Risk report highlights China as one of the key risk regions, this is a worrying trend.

The report also considers energy and carbon footprints.

It notes, “The discrepancy is exaggerated further when comparing carbon emissions and water stress, because coal is the major fuel for electrical generation, responsible for about two-thirds of China’s power. Because of this reliance on coal, the countrywide average output of CO2 emissions per kWh of electricity generated in the grid is over 50-percent greater than that of the United States, Thailand, and the U.K., and over ten times greater than in France or Brazil. As a result, the energy comparison of output per square metre or occupied room demonstrates a greater footprint of CO2.”

To help demonstrate the value of including new sustainability standards in prospective hotels, the report extrapolated the high and low quartiles of Chinese benchmarks from the Cornell Hotel Sustainability Benchmarking 2015 data and applied them to hotels in development pipelines. This shows the improvements possible if hotels were developed with efficient energy and water measures.

The report indicates that potential savings in carbon emissions are substantial. If the hotels forecasted to be open in China in 2025 increased their efficiency the report notes they would save the equivalent of 84 million tons of CO2, “which is greater than the annual carbon footprint of such countries as South Korea or the Philippines.”

The report’s authors want to emphasise that many efficiency measures that would help reduce a hotel’s energy consumption are relatively simple and inexpensive to implement.

However they note, “The major gains in efficient resource use in hotels occur in the conceptual planning and financing stages, but it appears that sustainability considerations are not included in these early development phases. One veteran energy management expert has said that ‘new hotel projects are rarely if ever conceptualized with sustainability factored into these phases of the new hotel project life cycle.’

“With so many entities involved in China’s hotel pipeline, we anticipate that the writers of many development and feasibility studies are not taking into account the collective effects of their development plans, especially with regard to energy use, water consumption, and carbon emissions.”

The report notes some of the challenges which might prevent or limit a hotel’s commitment to sustainability measures. It says:

Despite the inherent value of sustainability as a strategic competency, we have identified several major challenges in adopting methodologies for resource efficiencies for new hotel openings.

These challenges are a silo mentality, lack of understanding, a knowing-doing gap, misperception of the cost of sustainability, personal biases, and a disconnect between builders and users.

The hotel industry does not look at sustainability in a holistic manner. Instead, industry decision makers consider the components of sustainability in silos and do not necessarily fit the pieces together. To move forward, the industry needs to break down the silos and examine the big picture. The trend of holistically addressing sustainability components is on the rise due to the gain in prominence of (corporate) sustainability professionals. The main challenge that remains is for hotel owners and operators to include holistic sustainability solutions in the overall development budget.

Hotel managers and owners do not yet view sustainability as a strategic competency, even though studies have shown its strategic value. In that regard, hotels with green programmes command higher average room rates, higher profits, and higher numbers of return customers, when compared to their less-green peers.

Hotel companies need to address the knowing-doing gap in the implementation of project management. This represents the problem of knowing what to do but not knowing how to implement the strategic plans. To close this gap, executive management needs to embed sustainability into all phases of new hotel development, and seek to embed sustainability into company culture from the top down.

These challenges are aggravated by a cultural bias which causes hotel developers to focus only on the cost of sustainability, rather than to balance out the costs against the potential benefits, including the expected incremental profits and cost savings.

Additionally, although the Chinese government is committed to sustainability, there is still inertia slowing this government policy. While it’s generally the case in China that when a programme has been endorsed by the government or has become legislation, that programme will happen, it’s also the case that the main focus of hotel owners is to develop lavish hotels, without considering energy-efficient assets. We observe that hotel owners in China are willing to invest in energy saving, but they do not see this as a long-term strategy. Thus, the key question becomes whether the infrastructure is ready to support hotel owners who are willing to invest in sustainability.

Finally, we see little incentive for project developers to invest in sustainability, due to a short-term focus.

The report concludes by urging developers to take action, saying, “Rather than treat sustainability as an afterthought, we strongly recommend that hotel developers and hotel companies strengthen their emphasis on sustainability so that these concepts are embedded early in development planning.”

Awareness of this issue has informed ITP’s work with its membership on a stakeholder engagement event taking place later this year. The organisation is currently running a series of stakeholder surveys and interviews to identify the key environmental and socio-economic concerns of a range of industry stakeholders in Asia Pacific, the results of which will steer the event and help ITP members take action accordingly. Anyone wanting to feed into that process can still complete a survey.

Hoteliers who are keen to reduce that knowing-doing gap can use our industry-leading manuals which include measures to build sustainability in at the development stage, as well as our wealth of resources, best practice case studies and Know How Guides. ITP's free carbon footprint measurement tool - HCMI - can be downloaded for hotels of any size anywhere in the world to measure their CO2 per room, stay or meeting. You can use the Hotel Footprinting Tool to benchmark your hotel's performance against the average for the region.

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