SAN DIEGO—The Eighth Annual Americas Lodging Investment Summit (ALIS) got off to a fast start here in San Diego with two quick 35-minute sessions on green hotels—one focused on standards and guidelines, and another focused on what hotels can do today to become more green. The first day of ALIS also included a series of speakers who provided a somewhat grim look at the state of the overall industry, and a Hilton announcement about a new extended-stay brand called Home2 Suites that promises to feature carpet with 70 percent recycled content, water-conserving bathroom fixtures such as dual-flush toilets, and bulk amenity dispensers.
Thomas J. Corcoran, Jr., chairman, FelCor Lodging Trust, moderated the first environment-focused session entitled, “Green Hotels: Providing a Road Map to a Greener Hotel Industry—Standards, Guidelines, and the Future.” He was joined by Marc Heisterkamp, director, Commercial Real Estate, U.S. Green Building Council (USGBC); Patrick W. Maher, green consultant, American Hotel & Lodging Assn. (AH&LA) and partner, The Maher Group, LLC; and Anna R. Stark, program manager, Energy Star Commercial Properties, U.S. Environmental Protection Agency (EPA).
When asked whether or not they had seen any letup in the momentum to go green, given the current state of the economy, the panelists agreed there has not been a slowdown. In fact, according to Heisterkamp, the USGBC has seen an uptick in interest in its Leadership in Energy and Environmental Design (LEED) program, especially for existing buildings. In fact, of all the industries that have demonstrated an interest in LEED so far, Heisterkamp says hospitality is currently the most excited about it.
“The green movement is as strong as ever,” added the EPA’s Stark. “We’re seeing more local and state governments require participation in the Energy Star program. We are seeing tremendous growth in the number of hotels tracking energy performance through Energy Star’s Portfolio Manager.”
Opportunity to Reduce Costs
Patrick W. Maher explained that the current economic challenges present an opportunity to reduce costs through green initiatives. In fact, he says, a typical 300-room hotel today could save $17,000 a year by switching to compact fluorescent lighting, $15,000 annually with a program that gives guests the option of having their towels or linens washed, and $36,000 a year through the implementation of digital thermostats. All of the initiatives have very reasonable payback periods, says Maher, who directed attendees to the AH&LA’s website for more tips on how to reduce costs while helping the environment at the same time.
In regard to LEED and the perception in the industry that there is a significant cost premium to build to LEED standards, Heisterkamp emphasized, “Don’t buy into the idea that it has to cost more. Don’t buy into that cost myth.”
“Don’t look at green as a burden, but an opportunity,” Stark added.
Edward Watkins, editor of Lodging Hospitality magazine, moderated the second session that was entitled, “ Green Hotels: What Can Hotels Do ‘Today’ to Become More Green?” The panel included: Carmen Baker, vice president of diversity, Carlson Hotels Worldwide; David M. Jerome, senior vice president corporate responsibility, InterContinental Hotels Group; and Daniel A. Welborn, vice president/principal, Gettys. Watkins asked the panelists what they believed was driving the green movement.
“Guests are very interested in a green lifestyle while traveling,” Baker says. “Being green also offers benefits from a cost savings perspective.”
“Guests live this at home,” Jerome added, suggesting that they expect the same on the road.
When asked if green will continue to be a differentiator, Welborn said it would because the bar for what is considered green will keep moving. “There are a lot of innovation opportunities,” he says.
Guests Willing to Pay More for Green?
When asked if guests are willing to pay more to stay at hotels that emphasize sustainability, Baker said surveys have shown that they are but the question is: “How much more?”
When asked to give some final advice to those hotel owners thinking about greening their properties, Jerome said, “Look at the cost of not doing it.”
“Don’t underestimate the amount of time needed for training and working on the basics,” Baker concluded.”
Following the green sessions, numerous speakers and panelists provided their take on the current economic situation and offered predictions on the economy’s recovery.
“We’re still trying to figure out how bad it is going to be,” said Larry Kellner, chairman and CEO, Continental Airlines, Inc.
“In the last 20 years, there has never been a time when supply has increased so much and occupancy decreased so much at the same time,” said Mark V. Lomanno, president of Smith Travel Research.
Rate Reductions Warning
Lomanno warned attendees not to reduce rates because of the long-term impact of those actions. The last time rates were axed, it took six years to get back to where they were. He was optimistic that the industry would begin to see a recovery in the last quarter of the year. One of his counterparts, Mark Woodworth, president, PKF Hospitality Research, was not so optimistic. Woodworth predicted average daily rate growth would not return until the second quarter of 2010.
The only major news announcement of the day was the unveiling of Hilton’s new Home2 Suites brand. Hilton describes it as “an innovative, new extended-stay hotel brand that’s both “hip and humble.” Targeting value-wise extended-stay guests, Home2 Suites will feature expanded interior spaces for social gatherings, outdoor exercise areas, indoor pool, and guestrooms with a mobile work area and 42-inch flat screen TV.
“This is a great testimonial that we are investing in our future while others are shying away,” said Christoper Nassetta, president and CEO, Hilton Hotels Corp.
Home2 Suites is expected to ask a rate of $90 a night. The prototype has 108 rooms and can be built on just two acres of land. Ten applications already have been submitted and 10 to 20 more are expected in the next month.
Glenn Hasek can be reached at firstname.lastname@example.org.