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Economy Can't Stop Sustainability Movement Times may be tough, but many hoteliers are redoubling their efforts to go green. Tuesday, June 16, 2009 Glenn Haussman

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Going green has become such a priority among hotel brands, developers and customers, even a downtrodden economy isn’t putting the kibosh on hoteliers’ plans to invest in sustainable practices. It looks as if the hotel industry has irrevocably turned the corner on sustainability and is collectively realizing that this is a great way to not only increase the long-term value in a hotel, but also engender goodwill among guests. Oh yeah, turns out it’s also the right thing to do. 

During last week’s Buyer Interactive Trade Alliance and Conference event, BITAC Diversity, experts discussed the effect of this change and what it means to the lodging business.

“Innovation has not slowed – it has increased – even in this stagnant economy. We have seen an increase in green products that are appropriate for even the luxurious properties in categories such as amenities, linens and packaging,” said Ray Burger, president of Pineapple Hospitality, a company that focuses on providing green products to the hospitality industry.

“Hotels are starting to see a monetary value in going to green products and systems. It now makes financial sense,” said Jim Milkovich, corporate director of purchasing, Hyatt Hotels Corporation. “There is still an opportunity to commit to things that may cost you a little bit in the short term, but actually help compensate for potential added expense later. There is still a gap between what people are talking about and what is really happening.”

 “Looking at surveys, the numbers say that 25 percent to 30 percent of travelers actively seek out green hotels. Even if that number is inflated – say it’s just five percent - that is still a massive number. The numbers will just keep growing,” said Tony Reiss, executive director of purchasing with MGM Grand Hotel & Casino.

And it’s because those numbers are growing so quickly that lodging executives are continuing to invest in these initiatives. And that’s a smart decision, too. According to a real time poll taken during a panel discussion during BITAC Diversity, 38 percent of respondents said ‘green’ purchases are growing their businesses. Though 41 percent couldn’t quantify if it helped grow their businesses, just 21 percent thought it was of no help.

“Everyone asks about green. They are interested. It’s not something that’s going to go away, and one day it will be a habit and everyone will be aware,” said Koni Kim, CEO and president of Koni Corporation.

More telling was that 68 percent of attendees voted that the change in the economy has not changed their approach to sustainability. The rest did change their approach. Surprisingly, 78 percent of that group said that sustainable practices are a competitive advantage, so they’re into it more than ever.

“The marketing folks will tell you [utilizing sustainable practices] matters. However, Operations and diversity suppliers are not sure,” said Milkovich, noting that Hyatt is doing its part regarding a green strategy, but the company isn’t taking enough credit for what practices are in place. “One senior vice president’s whole job is sustainability. We are all amazed at the speed of change in the marketplace.”

Milkovich also said that, with rapidly changing technology, green products may allow small diversity companies to adapt and grow faster. It may just give them the edge that larger slow-to-change companies may not have.

“But make sure you have a great product first. Having a sustainable edge absolutely has value when purchasing decisions are made,” said Jeff Slye, who consults with Kimpton Hotels & Restaurants.

Leveraging green products may also help cut long-term expenses, explained Kim. “The perception is that if you are green it’s more expensive. That may be true. They may not make an immediate commitment but the interest is still there. If it costs 5-10 cents more, it may last 50 cents more. New products cost a lot more because of testing, but in the long run they will save,” said Kim. 

But Pineapple’s Burger cautioned that it’s critical that guest satisfaction not be affected. “You have to keep a balance between environmental benefits, guest satisfaction and the bottom line,” said Burger.