Free WiFi – tick. Comfortable bed – tick. Great location – tick. These are just some of the amenities travelers scour through hotel reviews to find. The presence (or absence) of these can help to make or break a holiday.
However, there is one more attribute tourists are increasingly looking for when choosing where to base themselves: sustainability.
We’ve become used to seeing sustainable initiatives like the removal of single-use plastics and guests encouraged to reuse towels.
While seemingly small acts of sustainability, these are public facing and easy for guests to participate in and feel good about. And they do feel good.
However, as guests are becoming more sophisticated in their understanding of climate change and sustainability, the expectations on hotel operators will increase as well.
That’s a concern when you consider how under-represented hotels are in nationally-recognised accreditation ratings like NABERS. The “save water” signs in hotel bathrooms don’t go far enough when compared to the climate crisis we are facing.
Where it gets interesting is behind the scenes. Designing a new hotel or upgrading older assets provides an amazing opportunity to consider how the building’s form and function can drive down emissions while still providing a quality experience.
This is particularly exciting for me. I’ve been supporting ESG for Pro-invest Group for nearly six years. One of my priorities is to help the company’s hotel portfolio achieve its net zero target by 2030.
Together with the Pro-invest team, we work with many industry experts to understand new building techniques and options, and to embed smart technologies to measure and manage our operations. Energy efficiency is a priority for our 27 hotels – approximately 16 of which are hotels along the Australian eastern seaboard.
The Holiday Inn Express (HIE) in Newcastle, became Australia’s first NABERS Climate Active-certified carbon neutral hotel building in 2021.
In 2022 the hotel was once again certified as carbon neutral, needing fewer carbon offsets than the year prior. For Pro-invest Group, achieving this milestone was the logical next step – part of a much bigger agenda.
But if you stay a while in the smart, modern, and comfortable Holiday Inn Express you’d struggle to identify which features have contributed to the carbon neutral accreditation.
In-room occupancy sensors, energy-efficient systems and products, and third-party monitoring and energy audits are just some of the initiatives that help realise the opportunity to reduce the hotel’s energy consumption by around 25 per cent.
The Australian-first for Newcastle shows that sustainable outcomes can be achieved in 24/7 operations as are common in tourism and highlights the opportunity available to all hotel operators.
NABERS states that buildings account for over 50 per cent of electricity use in NSW and 25 per cent of national emissions.
The potential is vast but untapped.
If Australia is to break the back of our carbon emissions and make the successful transition to net zero, then we can’t pick and choose which asset class should be sustainable and which ones get a free pass because it’s “too hard”.
Being sustainable, particularly at the outset of your journey, is difficult.
From our experience you need to thoroughly understand your existing assets and balance that against what you need to achieve.
No two buildings will be exactly the same. The upfront investment may seem daunting, but the return is there. Every reduction in kilowatt hours consumed equates to a dollar figure.
After the initial heavy lifting, sustainability improvements can be made in increments. Transitioning from a NABERS energy rating to a NABERS Climate Active carbon-neutral accreditation wasn’t that big a leap for Pro-invest because we’d done most of the heavy lifting already.
Carbon neutrality towards net zero is the natural evolution of the NABERS rating scheme and an initiative that should be considered as hotels push for momentum.
The economics from a guest perspective also stack up. A global study from our partner IHG Hotels & Resorts in February 2021 found that 60 per cent of the 9000 adults surveyed from across the US, UK, Germany, Greater China, the UAE and Australia want to be more environmentally and socially conscious in their travels.
Consumers are willing to put their hands in their pockets, with respondents saying they will spend an average of 31 per cent more on accommodation they know operates responsibly. And 51 per cent were happy to pay more than 20 per cent extra a night.
Investors are also keen to put their money into opportunities with sustainable outcomes.
Pro-invest is an investor in hotels and commercial assets on behalf of global and institutional investors. Each of our investment vehicles share a strong focus on advancing their sustainability, and we make a point of sharing learnings across our portfolio and with industry more broadly.
We’ve found that our focus on sustainability attracts investors; indeed, many are mandated to invest only in assets that are not highly sustainable.
The appetite is there. Our guests and investors want sustainable options. They are willing to pay for them.
There are brilliant programs, like NABERS, to support asset owners on their journey.
It’s time for hoteliers to meet their carbon footprint head-on or risk being left behind as footfall and dollars flow towards more sustainable establishments.
