Professional Comment

Are Consumers Ready for a Sustainability Sea Change in the Hotel Industry?

By Jimmy Theodorou, Head of Global Real Estate Group, Reed Smith

With sustainability becoming a growing concern for individuals around the world, it is no surprise that a recent study by the World Travel & Tourism Council, and Deloitte discovered that 69% of travellers are actively seeking sustainable travel options. For younger generations in particular, sustainable travel decisions are starting to become a priority but, faced with the cost-of-living and energy crises, it is unclear if customers are in fact willing to fork out for more sustainable travel options. The impetus is now on those in the hotel industry to take the driving seat by assessing their current environmental credentials and evaluating how best to bolster these to meet growing consumer demand.

Luxury is leading the way

For some hotels, the transition is already well underway, as being sustainable is at the heart of their brand. For luxury brands that have the money to make large-scale sustainability decisions, they are able to use renewable building materials, grow produce on-site and go plastic free. Some hotels are even able to create their own waste management and recycling facilities and harness the technology to capture waste heat to create energy. For example, Fairmont Hotels have heat recycling systems and green roofs – some of them even include bees! All of their hotels are top rated when it comes to green building practices. Meanwhile Hilton Hotels & Resorts is prioritising recycling and waste reduction by making small but significant changes that most hoteliers can implement. The chain recycles mattresses and partially used soap; donates to local food banks to minimise food waste; and even claims 94% of its energy is green energy.

The popularity of these hotels has naturally risen in recent years, as we have all become more aware of the effects of our actions on the planet, but these premium hotel companies are of course not accessible to all.

Although this move towards sustainability can be seen in most sectors globally, there is a particularly pressing cost incentive behind this shift in the hotel industry. With energy prices soaring, hotels will find survival challenging if they do not take bold leaps to find alternative energy sources or at least reduce their energy consumption. Those that prioritise reducing their carbon footprint will see their utility bills drop.

A positive future?
There are a significant number of hotels making changes to become more environmentally friendly but there is one factor that may get in the way of this progress – consumer demand. With younger generations leading the sustainability agenda, there is little incentive for hotels to completely transform, as affordability still reigns supreme in their list of priorities. The cost-of-living crisis has meant that even those who would prefer a more sustainable hotel, would not choose this over securing an affordable option. In the short-term, without a wholesale change in consumer demand, major sea changes in sustainability commitments from the hotel industry are likely to lag behind.

That is not to say that the future is completely bleak. Any developer looking to bring new hotels to the market risks looking completely out of touch with the forward momentum of the sector if they do not prioritise environmental initiatives within developments. And with energy prices unlikely to dramatically reduce anytime soon, hotel owners and developers would be wise to consider more sustainable energy options to support their path to success in the years ahead. For a complete transformation of the sector, consumers must help drive this mindshift to encourage the hotel industry to find creative, affordable and sustainable solutions.