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Does fragmentation hinder sustainability in the hotel industry?

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There was a time when a hotel group designed, built, owned and maintained its own hotels. With a few exceptions, this is no longer the case. With a complex build and operating structure which includes amongst others, architects, engineers and developers, asset owners and hotel group managers, it is arguably harder than ever to consistently factor in long-term sustainability factors.

The hotel industry, and the broader hospitality industry of which it is a part, has always been fragmented with multiple competing brands from global chains to the single hotel owners. In 2012, the UNWTO recorded 21 million hotel rooms globally. Intercontinental Hotel Group, the world’s largest chained-brand hotel (known for Crowne Plaza, Holiday Inn and InterContinental in the UK), has just 676,000 (3.2%) of these rooms. Its closest competitors, Marriott and Hilton, have 3.1% each.

For a market leader to enjoy just 3.2% market share, and the top three groups to own less than 10%, is evidence of a highly fragmented market in business lexicon. Fragmentation is the opposite of concentration.

A good example of high concentration would be the online search engine market where the top three players, Google, Yahoo and Microsoft, have 96% market share between them. Imagine a universe where just three players owner 96% of all hotel rooms. Unimaginable.

But the hotel industry is not only fragmented horizontally, between competitors, it is fragmented vertically in its ownership structure.

The company that runs the hotel on a day-to-day basis, the brand we will know, such as Intercontinental, Marriott or Hilton, will not own the hotel itself. Of the 4,602 hotels in the Intercontinental Hotel Group, 3,934 operate under franchise agreements, 658 are managed by the company but separately owned, and only 10 (0.2%) are directly owned.

It’s also unlikely that the hotel group will run maintenance or even housekeeping in many cases. In this instance fragmentation is the opposite of integration. Oil companies are a good example of vertically integrated (i.e. not fragmented) industries. Oil companies are active along the entire supply chain from locating deposits, drilling and extracting crude oil, transporting it around the world, refining it into petroleum products such as petrol/gasoline, to distributing the fuel to company-owned retail stations, for sale to consumers.

The hotel industry prides itself on its expertise at hotel management and marketing, leaving the capital-intensive activity of developing, owning and maintaining the physical property asset to others. This reflects the different attitude to risk and capital strength of different players in the industry.

So where does this leave hotel industry from a sustainability angle? Asset owners who are looking at the hotel as a physical asset could be more concerned with capital growth than short-term income necessarily.

Building a hotel in a place with rising property prices makes sense, regardless of the immediate occupancy rates and the external impact on communities and the environment. The hotel, profitable or not, has value. This is true of much of the world’s retail and commercial space.

Hotel managers, whose highest cost is salaries, have very little control, and little motivation in asserting control, over the other costs such as heating, ventilation, air conditioning (HVAC) and lighting that have been centrally specified by a long gone developer and environmental consultant.

While the impact of an individual hotel introducing LEDS, water flow systems, demand response controls on HVAC that supply energy back to the grid when it is needed and other water and energy efficient measures may be small, the impact of 21 million bedrooms not doing so is enormous.

In 2012, the Carbon Trust estimated that the UK hospitality industry (with the eighth largest estate of hotels globally) emitted 8 million tonnes of carbon from energy use alone, the equivalent of 27,000 400-mile flights. The point will not be lost on readers that there is a double whammy here, with many of those flights providing occupants for the hotels.

15,000 hotels have signed up to the World Travel & Tourism Council Hotel Carbon Measurement Initiative in association with the International Tourism Partnership.

This is solid progress, but we still have a long way to go to address the legacy of 21 million hotel rooms already built, as well as the number of new hotel rooms required to cater for the 600 million more tourists in 2020 than the billion that travelled in 2012.

The issue of fragmentation in the hotel industry will be debated in a private B&GT roundtable and subsequently reported in September 2014.

Photo: Kassandra Bay Resort via Flickr

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Further reading:

TripAdvisor launches green initiative for sustainable travel

Operating in a global context: sustainability in the hospitality sector

International Tourism Partnership: the hotels that are shaping the future of tourism

Why tourism can be a force for good in the developing world, and why it isn’t

Top holiday tips for responsible tourists

Simon Leadbetter is the founder and publisher of Blue & Green Tomorrow. He has held senior roles at Northcliffe, The Daily Telegraph, Santander, Barclaycard, AXA, Prudential and Fidelity. In 2004, he founded a marketing agency that worked amongst others with The Guardian, Vodafone, E.On and Liverpool Victoria. He sold this agency in 2006 and as Chief Marketing Officer for two VC-backed start-ups launched the online platform Cleantech Intelligence (which underpinned the The Guardian’s Cleantech 100) and StrategyEye Cleantech. Most recently, he was Marketing Director of Emap, the UK’s largest B2B publisher, and the founder of Blue & Green Communications Limited.

Environment

How Home Automation Can Help You Go Green

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home automation to go green

The holidays are an exciting, nostalgic time: the crispness in the air, the crunch of snow under your boot, the display of ornate holiday lighting up your home like a beacon to outer space, and the sound of Santa’s bell at your local Walmart.

Oh, yeah—and your enormous electric bill.

Extra lights and heating can make for some unexpected budgeting problems, and they also cause your home to emit higher levels of CO2 and other pollutants.

So, it’s not just your wallet that’s hurting—the planet is hurting as well.

You can take the usual steps to save energy and be more eco-conscious as you go about your normal winter routine (e.g., keeping cooler temperatures in the home, keeping lights off in naturally lit rooms, etc.), but these methods can often be exhausting and ultimately ineffective.

So what can you actually do to create a greener home?

Turn to tech.

Technology is making waves in conservation efforts. AI and home automation have grown in popularity over the last couple of years, not only because of their cost saving benefits but also because of their ability to improve a home’s overall energy efficiency.

Use the following guide to identify your home’s inefficiencies and find a solution to your energy woes.

Monitor Your Energy Usage

Many people don’t understand how their homes use energy, so they struggle with conservation. Start by looking at your monthly utility bills. They can show you how much energy your home typically uses and what systems cost you the most.

monitor energy usage

Licensed from Shutterstock – By Piotr Adamowicz

The usual culprits for high costs and energy waste tend to be the water heater and heating and cooling system. Other factors could also impact your home’s efficiency. Your home’s insulation, for example, could be a huge source of wasted heating and cooling—especially if the insulation hasn’t been inspected or replaced in years. You should also check your windows and doors for proper weatherproofing every year.

However, waiting for your monthly bill or checking out your home’s construction issues are time-consuming steps, and they don’t help you immediately understand and tackle the problem. Instead, opt for an easier solution. Some homeowners, for example, use a smart energy monitor such as Sense to track energy use in real time and identify energy hogs.

Use Smart Plugs

Computers, televisions, and lights still consume energy if they’re left on and unused. Computers offer easy cost savings with their built-in timers that allow the devices to use less energy—they typically turn off after a set number of minutes. Televisions sometimes provide the same benefit, although you may have to fiddle with the settings to activate this feature.

A better option—and one that thwarts both the television and the lights—is purchasing smart plugs. The average US home uses more than 900 kilowatts of electricity per month. That can really add up, especially when you realize that people are wasting more than $19 billion every year on household appliances that are always plugged in. Smart plugs like WeMo can help eliminate wasted electricity by letting you control plugged-in items from your smartphone.

Update Your Lighting

Incandescent lightbulbs can consume and waste a lot of energy—35% of CO2 emissions are generated from electric power plants. This can have serious consequences for increased global warming.

To reduce your impact on the environment, you can install more efficient lightbulbs to offset your energy usage. However, many homeowners choose smart lights, like the Philips Hue bulbs, to save money and make their homes more energy efficient.

Smart lights can be controlled from your smartphone, and many smart light options come with monthly energy reporting so you can continue to find ways to reduce your carbon footprint.

Take Control of the Thermostat

Homeowners often leave the thermostat on its default settings, but defaults often result in heating and cooling systems that run longer and harder than they need to.

In fact, almost half the average residential energy use comes from energy-demanding heating and cooling systems. As an alternative to fiddling with outdated systems, eco-conscious homeowners use smart thermostats to save at least 10% on heating and roughly 15% on cooling per year.

Change your home’s story by employing a smart thermostat such as the Nest, ecobee3, or Honeywell Lyric. Smart thermostats automatically adjust your in-home temperature by accounting for a variety of factors, including outdoor humidity and precipitation. A lot of smart thermostats will also adjust your home’s temperature depending on the time of day and whether you’re home.

Stop Wasting Water

The average American household uses about 320 gallons of water per day. About one-third of that goes to maintaining their yards. Using a smart irrigation systems to improve your water usage can save your home up to 8,800 gallons of water per year.

Smart irrigation systems use AI to sync with local weather predictions, which can be really helpful if you have a garden or fruit trees that you use your irrigation system for  water. Smart features help keep your garden and landscaping healthy by making sure you never overwater your plants or deprive them of adequate moisture.

If you’re looking to make your home greener, AI-enabled products could make the transition much easier. Has a favorite tool you use that wasn’t mentioned here? Share in the comments below.

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Environment

Working From Home And How It Reduces Emissions

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Many businesses are changing their operating model to allow their employees to work from home. Aside from the personal convenience and business benefits, working from home is also great for the environment. According to GlobalWorkplaceAnalytics.com, if employees with the desire to work from home and compatible jobs that allowed for this were allowed to do so only half the time, the reduction in emissions would be the equivalent of eliminating automobile emissions from the workforce of the entire state of New York. Considering the stakes here, it is vital that we understand how exactly working from home helps us go green and how this can be applied.

Reduction of automobile emissions

Statistics by the United States Environmental Protection Agency (EPA) show that the transportation sector is responsible for about 14% of the total Global Emissions of greenhouse gases, which is a very significant percentage. If employees work from home, then the need to travel to and from their workplace every other day as well as other business trips are reduced considerably. While this may not eliminate the emissions from the transport sector altogether, it reduces the percentage. As indicated in the example above, a move to work from home by more businesses and industries cuts down automobile emissions to as much as those from an entire state.

Reduction of energy production and consumption

According to Eurostat, electricity, gas, steam and air conditioning accounted for as high as 26% of the Greenhouse gas emissions from the EU in 2014. EPA stats are also close at 25% of the total emissions. This makes energy production the single largest source of emissions. Working from home eliminates the need for large office spaces, which in turn reduces the need for electricity and heating. Similarly, the need for electrical office equipment and supplies, such as printers and computers, is also greatly reduced, which reduces the emissions from energy production in offices. Additionally, most households are now adopting green methods of energy production and implementing better ways of energy usage. The use of smart energy-efficient appliances also goes a long way in reducing the energy production and consumption levels from households. This, in turn, cuts down emissions from energy production from both the home and office fronts.

Reduced need for paper

Paper is also a huge source of emissions, considering that it is a carbon-based product. EPA stats show that carbon (IV) oxide from fossil fuel and industrial processes accounts for 65% of the total greenhouse gas emissions. Working from home is usually an internet-based operation, which means less paper and more cloud-based services. When everything is communicated electronically, the need for office paper is reduced considerably. Moreover, the cutting down of trees for the sake of paper production reduces. All these outcomes help reduce the emissions and individual carbon footprints.

Effective recycling

While businesses make an effort to recycle it is not as effective as homeowners. Consider everything from the water you drink to office supplies and equipment. While working from home, you have greater control over your environment. This means that you can easily implement proper recycling procedures. However, at the office, that control over your personal space and environment is taken away and the effectiveness of recycling techniques is reduced. Working from home is, therefore, a great way to go green and increase the adoption of proper recycling.

Takeaway

Even though the statistics are in favor of working from home to reduce emissions, note that this is dependent on the reduction of emissions from home. If the households are not green, then the emissions are not reduced in the least. For instance, if instead of installing a VPN in the router to keep the home office safe, an employee buys a standalone server and air gaps it, the energy consumption is not reduced but increased. Therefore, it is necessary that employees working from home go green if there is to be any hope of using this method of operation to cut down on the emissions.

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