HYATT | A Leader in Green Hospitality & Tourism
The international hotel industry is just beginning to find its feet again after a 2+ year period of COVID-induced doldrums. A recent survey by the consultancy Kearney confirmed what we already suspected: the environmental performance and reputation of hotels has become an even greater factor in customers’ hotel choices than it had been before the pandemic, and it was already extremely important to begin with. (The Kearney study found that the environment factored into fully 83% of customers’ hotel choices in 2020, a 12% increase from the year previous). The competitive benefits are obvious: increasing the likelihood that one’s hotel will be chosen in the first place; the ability to charge higher prices; greater customer satisfaction and loyalty; increased repeat business; and a better ability to compete for new talent . The well-known tendency of millennials to place particular emphasis on environmental factors only strengthens the business logic.
For those reasons (not to mention potential cost savings, currently running at some $20 million per year at Hyatt , environmental performance has become one of the key drivers of competitiveness and profitability in the industry. Hyatt was one of the first to recognize it, launching a comprehensive environmental program as far back as 2008. The Hyatt environmental strategy is focused on three pillars: climate and energy efficiency; water use reduction, and waste reduction. Given that improvements in all three areas need to be made across 46 million square feet of built hotel properties, this is no small challenge.
The plethora of eco-efficiency measures being pursued by Hyatt includes:
- Greener, state of the art new construction and renovation techniques and materials
- Heating and cooling system efficiency upgrades
- Upgrades to kitchens and laundry facilities
- New, water-efficient shower and bathroom fixtures
- Water recycling
- Increased use of renewable energy
- LED lighting retrofits
- Installing EV charging stations
- Increased usage of green suppliers and contractors
- Materials recycling
- Local and sustainable food sourcing
- Active work with strategic partners such as WWF and the Green Hotels and Responsible Tourism Initiative
All of these improvements are yielding concrete results , and Hyatt is currently on track to meet a number of ambitious targets for 2025: a 55% reduction in greenhouse gas intensity; a 25% improvement in both energy and water efficiency; and the generation and procurement of 30% of its energy requirements from renewable sources. Unusually among its peers, and as a tool to help reduce greenhouse gas emissions, Hyatt has also adopted an internal “shadow price “ of $100/ton for carbon emissions in its calculations and profitability projections for new construction and retrofits.
These efforts and investments are already paying off: Hyatt has calculated ROIs of 15-20% on its green expenditures. In addition, Hyatt’s efforts and results are generating new reputational capital and 3rd party recognition. Hyatt was the first U.S. hotel chain to achieve an ISO 50001 certification for its energy management system. In 2021, it was the only U.S. lodging REIT to make Barron’s “Most Sustainable REITs “ list. Also in 2021, Hyatt was named to the Dow Jones Sustainability Index for the third year running, and received similar recognition from both S&P Global and Newsweek.
