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Hotel investors look to balance sustainability, profitability

Updated: Jun 18, 2019

Environmental concerns and a call for sustainable methods of living have been in the news for decades—Earth Day was launched in April 1970—and the issues continue to resonate with today's generation. Indeed, Sweden's teen activist Greta Thunberg's call for action on climate change has helped put sustainability in sharper focus for everyone, including hospitality investors. 

But how seriously do they take the issue and what does it mean to them? This question has quickly become a running theme at hospitality investment conferences this year.

The Brands' Take on Sustainability

Pushed by customer demand (and the chance to reduce some of their operational costs), large hospitality groups have been promoting sustainability programs for some time: Marriott’s Serve 360 program, Hilton’s Lightstay platform and Accor’s Planet 21 program (to name but a few) are all boasting sustainability goals. 

Smaller hospitality groups, too, are vocal about the issue, and some argue their more-nimble size allows them to take more-impactful actions. Kike Sarasola, founder of Room Mate Hotels, made this point at the International Hotel Investment Forum (IHIF) in Berlin last March. He argued hotel groups need to take more significant initiatives than token ones such as banning plastic straws. He noted long gone are the days when asking guests to reuse their bathroom towels was enough—and was it ever? 

Sarasola’s group considers its sustainability policy as a whole operational strategy, all the way down to using recycled materials for its staff’s uniforms. At the meetings of CEOs that took place at IHIF, a number of his peers supported his view and called for longer-term thinking to become more prevalent in the industry–something the larger hospitality groups may struggle with as their shareholders or private-equity owners focus on year-over-year results. Smaller hotel operators may be more able to push the sustainability agenda and to make it a differentiator that will help reach their target audience.

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