Hotels are going green (really)! And sustainability is the hot issue in the hotel industry. Although hotels have been the last real estate asset class to embrace sustainability, it looks like things are really changing. At the Americas Lodging Investment Summit (ALIS), trash recycling containers were a welcome sight, and the program featured a full panel on green hotels, a keynote, and lots of mentions about sustainability by many of the speakers.
I thought some of the most interesting comments came from the Hotel Leaders Outlook panel. Here are a few of the gems from hotel industry leaders on the greening of hotels and sustainability in the hospitality industry.
From Mark Hoplamazian, president and CEO, Global Hyatt Corp.:
This is not [just] a cost issue. It is a revenue issue as well.
We need to raise consciousness about sustainability. In the hospitality business, we touch millions of people every week.
I absolutely believe this is here to stay. And we need to dedicate a lot more resources to it.
From Christopher J. Nassetta, president and CEO, Hilton Hotels Corp.:
It is good for the environment, it is good for business.
I see it as an opportunity. It is a revenue and an expense issue. Amex says that 50 percent of their corporate customers consider this in making reservations.
On expense, we are looking at light bulbs, water use, trash. There are huge ROIs associated associated with green.
As a business proposition, green can be rewarding.
As time goes on, the investment community is becoming more sensitive to this issue.
Companies on the leading edge of this will have an advantage.
For all those reasons, it is here to stay. To deny that is to put your head in the sand.
Economically—most important to us as an owner—we are seeing replacement of air-conditioning units with those that use less electricity and are economically justified.
In marketing, the consumer is confused because there is no standard of what is green.
From Monty J. Bennett, president and CEO, Ashford Hospitality Trust, Inc.:
The customer is dictating that the hospitality industry go green. If you don’t see it today, you will tomorrow. Get ready. Every group meeting planner is going to check your carbon emissions.
You better build it green or convert it. If you don’t, the customers won’t come.
From Laurence S. Geller, chairman and CEO, Strategic Hotels & Resorts:
As an industry, we need to embrace sustainability. Consumers will insist on it.
It is here forever.
Supply Will Follow Demand
What is clear to these industry leaders is that the market is driving the change toward sustainability—and where there is demand, supply is sure to follow. While some in the industry will hop on the green bandwagon to maintain their position in the marketplace, others will use the change to identify new opportunities, reposition their properties and portfolios, and create profitability for their companies and their investors.
I am looking forward to the new opportunities this change will bring to the industry! It is possible that we will look back on 2007-2008 as the “tipping point” for the greening of the hotel industry. To be sure, many owners and operators have gone beyond the “what if” debate and are now engaged in the “how to” dialogue. What are the hard numbers? For new builds versus conversions? How do new green practices affect operating costs and how are new operation practices implemented? How will green issues impact valuation? Get financed? Where are the case studies? Who has been in the trenches? Who are the real experts?
These are the questions and hard economic issues that provide the focus for The UNLV-JMBM Hotel Developers Conference, March 11-13, 2008 in Las Vegas. Our panelists and speakers are industry trailblazers who will share their hard-won experience and knowledge.
If you are determining how to participate in green hotel development and operations, you will not want to miss this opportunity to stay ahead of the curve. Please join me in Las Vegas for this important conference!
Jim Butler is recognized as one of the top hotel lawyers in the world. He devotes 100 percent of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group®—a team of 50 seasoned professionals with more than $40 billion of hotel transactional experience, involving more than 1,000 properties located around the globe. In the last five years alone, Jim and his team have assisted clients with more than 90 hotel mixed-use projects all over the world. Jim is the author of www.HotelLawBlog.com. He can be reached at (310) 201-3526.
