A roadmap for sustainable hospitality

Customers are demanding sustainable travel options

Like many other consumers, travelers are increasingly concerned about climate change and the environment. Sixty-eight percent of respondents to the Deloitte’s Global State of the Consumer Survey described climate change as an emergency, and Booking.com reports that 53% of global travelers say they're more determined to travel sustainably than they were a year ago. And for a large and growing segment of travelers, it's become more and more important to choose travel brands that embody their values.

Today, sustainable practices can be essential to the health of your business—not to mention the communities you operate in. Whether you've already made significant changes or are just starting to move from intention to action, sustainable hospitality can take many forms. To help you get the most from your efforts, Deloitte looks at some of the sustainability factors specific to the hospitality industry, along with some suggestions for how to realize a return on your investment into sustainability.

But first, how is "sustainable hospitality" defined? It depends whether you ask customers, employees, or management. Large hotel chains, local operators, and small ownerships groups will likely also have varied environmental, social, and governance (ESG) priorities, as will the corporate and client-facing divisions of a business. Despite these differences, hospitality companies should offer travelers an intentional—and compelling—sustainability experience across the brand.

The good news is that the hospitality industry has multiple proven, scalable opportunities to help minimize environmental impact—and innovative programs and technologies are emerging across the industry.

Perspectives, priorities, and considerations

Energy efficiency

Hotel operators are adopting automated energy management systems, like real-time monitoring and dashboarding, combined heating, power, and cogeneration systems that capture and reuse excess heat, and AI-based HVAC. An Italian resort operator implemented such a system, reducing energy consumption in 11 sectors from HVAC to lighting while providing real-time visibility into usage.

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Renewable energy

In addition to onsite solar and wind generation, some hotels are exploring geothermal, biofuel, and hydrogen fuel cell technology. One Japan-based hotel group uses plastic waste to power a hydrogen fuel cell generator that creates 450,000 kWh of power while reducing CO2 emissions by 200,000 kg annually.

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Water usage

Hotel companies are conserving and reusing water through low-flow faucets, toilets, and showerheads; smart irrigation controllers; continuous-batch washing machines; and rainwater collection and desalination. For high-water-use properties, one global hotel group uses an automated meter system that updates water usage reports every 15 minutes, and sends out leak alerts.

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Waste management

Many hotels are eliminating single-use plastics, using biodigesters to help process food waste, donating excess edible food, recycling, and using on- or offsite composting. A five-star hotel in the US collaborated with a food waste management provider to implement a waterless distributed digestor, which processes all of the property's food waste and turns it into compost, diverting it from landfills.

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Chemical usage

Many hotel operators have switched to nontoxic, environmentally friendly, and biodegradable chemicals in housekeeping and other areas. As an example, one hotel group follows EU Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) and US Environmental Protection Agency (EPA) Chemicals of Concern program guidelines for reducing use of toxic supplies.

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Sustainable sourcing

Efforts focused on seasonal ingredients, onsite gardens, and local supplier partnerships can help reduce supply chain complexity and cut emissions. A German hospitality group set minimum sustainability standards and corporate social responsibility (CSR) criteria for its products and services. The group also sources cage-free eggs and sustainably certified and fair-trade coffee at its hotels.

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In sustainability as in life, however, one size doesn’t fit all. A successful environmental initiative should be tailored to the particular property, considering factors such as:

Age. Is the hotel a new build? If not, does it need major upgrades?
Location. Urban or rural? Hot and sunny, or colder climate?
Size. How big is the building? How many rooms?
Configuration. What's the ratio of guestrooms to public space? Indoor to outdoor space? Overall footprint and roof space? Orientation of the available spaces?
Unique features. What services and amenities does the hotel offer?
Incentives. Does the local, regional, or national government offer environmental tax credits, subsidies, or other incentives? How could those influence return on investment?

Three opportunities for implementation

Some sustainability changes can be implemented immediately and may require little investment. Others may require a coordinated multiyear effort. Deloitte sees three major areas of opportunity:

In-room updates

These simple, money-saving improvements have the added bonus of being visible to travelers. Replacing single-use plastics helps to reduce waste. Optional towel reuse can cut detergent, water, and energy usage. Occupancy sensors can automatically turn off lights in empty rooms, saving electricity. In-room and public recycling bins can help save materials and signal concern about the environment. One hotel group introduced a 10-year sustainability framework that included the goal of eliminating single-use plastic by 2030. In partnership with personal care product brands, the company plans to replace bathroom miniatures with bulk bottles or dispensers in 80% of its properties globally, reducing its use of disposable plastics by 850 tons per year.

Workforce equity

The hotel industry is battling to preserve the charm of traditional hospitality and the value of person-to-person interactions in a challenging labor market. To help attract diverse, competitive frontline talent even in tight labor markets, hospitality brands should offer competitive pay, scheduling flexibility, personalized benefits, and opportunities for training and advancement. Learn more about Deloitte’s perspective on acquiring, retaining, and rewarding frontline employees in the hospitality industry.

Carbon emissions

What can you do to help make your properties more energy efficient? Encourage hotel operators to factor in energy efficiency when replacing furnaces, water heaters, and large appliances. On restaurant and room service menus, look for opportunities to help reduce the amount and frequency of high-carbon foods, and to source local meat and produce. At the corporate level, explore sourcing renewable energy through both traditional and dedicated carbon-neutral providers, as well as tax incentives for upgrades such as onsite solar and hybrid or electric vehicles. One Maui, Hawaii resort property invested US$100 million in green infrastructure transformation, installing rooftop photovoltaic, stormwater management, indoor air quality sampling, and other energy-saving systems—with estimated annual savings of 670,000 kBtu of energy, 184,000 kg CO2 emissions, and 28,000 kgal of water. In addition, guests can follow a self-guided sustainability tour highlighting these efforts.

Whatever improvements you make, take the opportunity to share them transparently and honestly with your customers, celebrating and reinforcing your commitment to sustainability. And as your sustainability journey continues, be sure to track, quantify, and disclose your improvements in environmental and financial impact reports.

How Deloitte can help

If you're ready to move the ESG needle, Deloitte can help. Our extensive global network can help deliver sustainability knowledge in hospitality, tax, energy, transportation, food systems, waste management, utilities, and other critical areas. Deloitte’s strategic and operational specialists are ready to help you tackle your highest priority sustainability initiatives and help drive transformation in areas from tax advisory, data analytics, and change management to renewable energy, energy efficiency, and sustainable sourcing. Contact us today.

Author

Katrina Goulden
Senior Manager, ESG Strategy, Deloitte US
kgoulden@deloitte.com

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