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> roundtable and subsequently reported in September 2014.
Photo: Kassandra Bay Resort via Flickr
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4 Common Items That Can be Reused Again and Again
As a society we are getting much better at taking our obligations to the world and environment around us more seriously. This is undoubtedly a good thing! The effects of climate change are beginning to manifest across the world, and this is turning the issue from an abstract threat into a very real danger. Trying to introduce some greener, more eco-friendly practices into your life isn’t just a great way of doing something beneficial for society and the world around you. It is a wonderful way of engaging positively with the world and carries with it numerous psychological benefits.
Being a greener, more ecologically friendly person doesn’t require any dramatic life changes. Breaking or making a few small habits is all it takes to make your life a greener one. In this article we look at one of the easiest, yet most effective green practices to get into: reusing everyday items.
Jars and Containers
Glass and metal are widely recycled, and recycling is a good thing! However, consider whether any containers you buy, whether it’s a tub of ice cream or a jar of coffee, can be washed out and reused for something else. Mason jars, for example, can be used to store homemade pasta sauce and can be washed for future use. Once you start thinking about it, you will find endless opportunities to reuse your old containers.
An ice-cold soda is a wonderful treat on a hot day, but buying soda can get expensive, and the manufacturing and distribution of the drinks themselves isn’t great for the environment. However, by holding on to your old soda bottles and repurposing them as water bottles, you can save money on drinks, or use them to measure out water for your garden.
Most of the time groceries come in paper bags, which are better for the environment than the plastic alternatives, but they are less durable and thus harder to reuse. Whenever the store places your items in a plastic bag, hang onto it so you can reuse the bags again. If you want to take it one step further, consider looking into buying some personalized recycled bags. These bags are designed to last for a long time and are made of recycled materials. They look striking and unique, they’ll turn heads, and maybe even attitudes!
If you’re a keen gardener, then you will already probably know how to reseed your plants in order to ensure a fresh crop after each plant’s lifecycle. If you have space in your garden, or haven’t yet tried your hand at gardening, then consider planting a small vegetable plot. Growing your own veggies means that you’ll be helping to cut back on the emissions generated by their transport and production. The best part about growing your own food in this way is that, by harvesting properly and saving the seeds, you can be set up with fresh vegetables for life!
Reusing and recycling common household items is an easy way to make your world a little bit greener. Once you start looking for these opportunities you’ll realize that they’re everywhere!
These 5 Green Office Mistakes Are Costing You Money
The sudden interest in green business is very encouraging. According to recent reports, 42% of all companies have rated sustainability as an important element of their business. Unfortunately, the focus on sustainability will only last if companies can find ways to use it to boost their ROI.
Many businesses get so caught up in being socially conscious that they hope the financial aspect of it takes care of itself. The good news is that there are plenty of ways to go green and boost your net income at the same time.
Here are some important mistakes that you will want to avoid.
Only implementing sustainability on micro-scale
The biggest reason that brands are going green is to improve their optics with their customers. Too many businesses are making very minor changes, such as processing paperwork online and calling themselves green.
Customers have become wary of these types of companies. If you want to earn their business, you are going to need to go all the way. Bring in a green business consultant and make every feasible change to demonstrate that you are a green organization from top to bottom.
Not prioritizing investments by long-term ROI
It isn’t realistic to build an entirely green organization overnight. You will need to allocate your capital wisely.
Before investing in any green assets or services, you should always conduct a long-term cost benefit analysis. The initial investment for some green services may be over $20,000. If they don’t shave your cost by at least $3,000 a year, they probably aren’t worth the investment.
Determine which green investments will have the best pay off over the next 10 years. Make these investments before anything else. Then compare your options within each of those categories.
Implementing green changes without a plan
Effective, long-term planning is the key to business success. This principle needs to be applied to green organizations as well.
Before implementing a green strategy, you must answer the following questions:
- How will I communicate my green business philosophy to my customers?
- How will running a green business affect my revenue stream?
- How will adopting green business strategies change my monthly expenses? Will they increase or decrease them?
- How will my company finance green upgrades and other investments?
The biggest mistake that too many green businesses make is being overly optimistic with these forecasts. Take the time to collect objective data and make your decisions accordingly. This will help you run a much more profitable green business.
Not considering the benefits of green printing
Too many companies believe that going paperless is the only way to run a green organization. Unfortunately, going 100% paperless it’s not feasible for most companies.
Rather than aim for an unrealistic goal, consider the option of using a more environmentally friendly printer. It won’t be perfect, but it will be better than the alternative.
According to experts from Doranix, environmental printers have several benefits:
- They can process paper that has been completely recycled.
- They consume less energy than traditional printers.
- They use ink that is more environmentally friendly.
You want to take a look at different green printers and compare them. You’ll find that some will meet your needs as a green business.
Poorly communicating your green business strategy to customers
Brand positioning doesn’t happen on its own. If you want to run a successful green business, you must communicate your message to customers as clearly as possible. You must also avoid the appearance that you are patronizing them.
The best approach is to be clear when you were first making the change. I’ll make an announcement about your company‘s commitment to sustainability.
You also want to reinforce this message overtime by using green labels on all of your products. You don’t have to be blatant with your messaging at this stage. Simply provide a small, daily reminder on your products and invoices.
Finally, it is a good idea to participate in green business seminars and other events. If your community has a local Green Chamber of Commerce, you should consider joining as well.