Hotels are going green, slowly

When the economy was thriving, developers were promoting environmental flourishes like roof gardens, floors of reclaimed wood, and solar panels.

When the Orchard Garden Hotel opened in San Francisco in 2006, it featured furniture made from sustainably grown wood. Now, with reduced operating budgets, hotel owners are putting off the kind of sweeping projects that were common during the bull market and instead focusing on smaller environmental initiatives that don’t cost as much and may even save money at the same time.

“Big-ticket items that have long-term return on investment have definitely been put on the back burner,” said Steve Faulstick, general manager of the Doubletree Hotel in Portland, Ore., and a board member of the Green Meeting Industry Council.

“We’d love to be completely green and sustainable, but we’re not going to do that at the expense of laying people off.” The lodging industry is still working its way through a prolonged slump.

Hotel occupancy rates have recovered a bit from the trough of 2009, especially at business hotels in big cities. But they remain depressed overall, and average occupancy for all domestic hotels in the second quarter was 60.7 percent, compared with the 69.3 percent the industry enjoyed in the third quarter of 2000, according to STR Global.

Big renovations tough

This makes it extraordinarily difficult for hotels to pay for big-ticket green renovations, especially with a tight credit market. “The traditional sources of that financing, which are local and regional banks, are stressed by their commercial real estate exposure,” said David Loeb, senior research analyst at the investment firm Robert W Baird & Co.

The technology company Cisco asks hotels about several areas of environmental awareness, like recycling protocol, the use of eco-friendly housecleaning products and water conservation. Those with programmes addressing at least five categories are identified on the company’s in-house travel booking tool with a green leaf symbol, said Pam Honeycutt, Cisco’s travel manager for the Americas and Europe.

Evaluating a hotel’s operational impact on the environment is difficult given the lack of an industry standard, she said. “There’s not one definition of what a green hotel would be,” she said. To address this demand without going into the red, hotels are looking at what Faulstick calls “low-hanging fruit.”

Lacking the capital to sink into big expensive retrofits, hotels are turning to small-scale conservation programs that will satisfy corporate buyers. As a bonus, many of these programs also reduce their energy and water bills.

This includes practices such as training staff to switch off lights and televisions, encouraging guests to embrace less-frequent sheet and towel changes and installing lower-cost fixtures like water-conserving showerheads and compact fluorescent light bulbs.

Since energy use is the second-largest expense a hotel incurs after salary and benefit costs, practices that reduce this are widely embraced. David Jerome, a corporate responsibility executive with the InterContinental Hotels Group, says the economic downturn accelerated the company’s green plans.

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