MGM Resorts’ massive City Center development is one of the world’s largest LEED-certified projects. The Las Vegas Sands built a solar thermal power plant on the roof of its convention center to provide hot water for swimming pools, spas, and guest rooms. Hotel-operated limousines run on compressed natural gas, which burns cleaner than gasoline, and high-end restaurants like Sage offer farm-to-table produce, artisanal meats, and sustainable seafood.
The greening of Las Vegas is being driven largely by business travelers and the city’s position as one of the top meeting destinations in the United States.
“You’re not going to find many Fortune 500 companies that are not meeting in Vegas at some point,” says Michael Dominguez, Senior Vice President of Sales for MGM Resorts.
“We view sustainability as a core part of our business strategy,” says Gary Loveman, the Chief Executive of Caesar’s, which has invested more than $70 million in energy-efficiency programs.
If Las Vegas, a brand that is all about fun and frivolity, takes sustainability seriously, it’s a safe bet that the rest of the hotel industry is equally committed to reducing its environmental footprint as well as becoming more socially responsible. But how green is Vegas, really? The lights on the strip still glitter all night long. The carbon footprints of big operators such as MGM Resorts shoot skyward as they add new capacity. And it’s hard to get your head around the idea that transporting nearly 40 million visitors a year to a desert city that averages about 4.2 inches of precipitation a year ends up being sustainable in a meaningful way.
And that’s the way it goes with the rest of the hotel industry, too. Every major hotelier—Starwood, Marriott, Hilton, Hyatt, IHC, and the rest—has invested in energy and water efficiency, reported its carbon footprint online, reduced waste, organized “green teams” of engaged employees, and embraced social programs ranging from recycling soap and toiletries to teaching employees to recognize and report human sex trafficking.
That’s all well and good, but these efforts are not yet comprehensive or comparable in a way that would allow corporate travel buyers and managers (or, for that matter, leisure travelers) to measure one hotel chain against another. Nor are there reliable, broad-based, third-party standards, ratings, or rankings that reward industry leaders and shame laggards, as there are in other business categories, ranging from seafood and forestry to cell phones and appliances.
“The industry, in general, is still getting its feet wet,” says Jennifer Silberman, who has been Vice President of Global Corporate Responsibility at Hilton Worldwide since 2010. Like other big hotel companies, Hilton says that sustainability—which it calls corporate responsibility, and others label corporate citizenship—is about more than going green.
“Our definition of responsibility is holistic,” Silberman says. “It includes environmental, social, and corporate governance issues.”
One clear sign that the hotel sector has lagged others? Transparency—or the lack thereof. Hilton published its first thorough corporate responsibility report in 2013, and Starwood plans to release its first sometime this year. Hyatt began reporting in 2011, and Marriott in 2006. By comparison, Shell has been reporting on its environmental performance since 1997, and tech companies such as Intel (which began reporting in 2001), Hewlett Packard (2001), and Microsoft (2003) have had sustainability programs in place for a decade. Nike began reporting in 2001, Gap in 2004. Not until companies measure and publicly report on their actions does real change come, sustainability experts say.
The good news is that the hotel industry is making unmistakable progress as a strong business case emerges for environmental and social initiatives. Indeed, industry executives cite three reasons why they have begun to take action on the sustainability front: to save money, attract and motivate their employees, and respond to demand from business and leisure travelers.
The first and biggest driver is the cost savings generated by efficiency. Hilton Worldwide, for example, says it has saved about $253 million since 2009 by reducing energy, waste, and water use.
“Everything we do has a positive return on investment,” says Randy Gaines, Hilton Worldwide’s Vice President of Engineering, Housekeeping, and Laundry Operations for the Americas. “Over 90 percent of our projects have paybacks of less than two years,” he says. All of the nearly 4,000 Hilton Worldwide properties must use LightStay, a proprietary software platform that calculates their sustainability performance and helps spread best practices.
Meantime, the Las Vegas Sands, which operates some 15 million square feet of space in its hotels, convention center, and casinos, tackles about 100 environmental projects a year, including the installation of energy-saving lighting and low-flow plumbing fixtures, reports Katarina Tesarova, the property’s Executive Director of Sustainability. Some pay back their investment in less than a year, she reports.
The second biggest driver is the industry’s desire to attract and engage workers in a business where providing good service matters. “We want our employees to deliver that genuine you-really-feel-they-meant-it service,” says Cindy Ortega, Chief Sustainability Officer at MGM Resorts. Last year, MGM and its employees staged a theatrical performance called “Inspiring Our World: A Musical Journey” to showcase the company’s commitment to sustainability and diversity. The show featured a Stomplike number about recycling waste (with garbage cans, of course) and a ballad about conserving water. The show opened in Vegas—nine shows in three days, with some 40,000 attendees—and later toured MGM properties in Detroit, Reno, Biloxi, and Tunica.
Hotels that invest in their communities and tackle social problems report that these efforts also pay off with their people. In Sao Paulo, Brazil, for example, Hyatt brings disadvantaged young people from the city’s slums, or favelas, to the Grand Hyatt for a hands-on, year-long training program that covers everything from personal grooming to hospitality industry skills. Hotel associates are trained as volunteers to teach the classes, giving the attendees “a tremendous sense of engagement and accomplishment,” says Brigitta Witt, Hyatt’s Vice President of Corporate Responsibility. The hotel eventually hires many of the students.
Not such a happy story—but an important one—is the industry’s efforts to combat human sex trafficking, particularly of children. Hilton and Wyndham are among a handful of US hotel companies to have signed what is known as “The Code” (The Code of Conduct for the Protection of Children From Sexual Exploitation in Travel and Tourism), and Hilton has spent three years, working with a nonprofit called Polaris, training its workers to spot sex trafficking. “We’re building a network of more engaged, more aware advocates,” says Silberman.
The sustainability push is also driven by customers, although it’s hard to know to what degree, if at all, the social and environmental truly attract new business to hotels. What is known is that corporate travel buyers increasingly ask for sustainability data when compiling their lists of preferred hotels, or when planning meetings and events. “We have seen a significant push from our customers, demanding sustainability information from us in a variety of ways,” says Denise Naguib, Vice President of Sustainability and Supplier Diversity at Marriott. Along with the usual information about “rates, dates, and space,” customers are requesting data on CO2 emissions and water use, Naguib points out. Business travel planners want the data to report their own environmental performance, so hotels need to provide it. But Naguib acknowledges: “Today, our customers are probably not going to compare the sustainability of hotel A to hotel B to make a buying decision.”
What’s more, doing side-byside comparisons is harder than it should be, although it is gradually becoming easier. One key step forward: More than 15,000 hotels around the world have adopted the Hotel Carbon Measurement Initiative (HCMI) methodology developed by the World Travel and Tourism Council, which allows them, for the first time, to calculate and communicate the carbon footprint of hotel stays and meetings in a consistent and transparent way. Another: The Global Business Travel Association (GBTA, which publishes this magazine) has created a standardized request for proposal (RFP) that includes a variety of metrics, such as carbon footprint and water usage per room, and asks about sustainability practices, ranging from the availability of bike racks to the use of “green” cleaning practices. “That was a huge push forward for us as an industry,” Naguib says. Corporate travel buyers with an interest in sustainability say hotel operators are more responsive than ever to their requests for greener meetings or more sustainable food choices.
“The conversation is definitely improving,” says Paul Salinger, a Vice President of Marketing at Oracle who leads its sustainability work at big events like Oracle Open World, which brought 60,000 people to San Francisco last year.
What would accelerate change are credible third-party ratings that enable buyers to directly compare hotel companies or properties—and spark competition among owners and operators. Climate Counts, a nonprofit group, ranks hotel companies on climate-change practices and policies—it puts the Saunders Hotel Group, a small Boston-based chain with a longtime commitment to sustainability, at the top of its list, followed by Marriott. But Climate Counts incorporates only climate issues, and other chains challenge its methodology. Green Hotels Global, a software platform run by a Toronto-based firm called the Carbon Accounting Company, seeks to provide standardized environmental metrics for hotels everywhere; it measures carbon emissions, water, waste and other practices, even adjusting for differences in climate.
“We’re trying to help the corporate travel buyer and the meeting planner filter through the myriad of green claims that are permeating the marketplace,” says Ian Lipton, President of the Carbon Accounting Company. The trouble is, the only major chain to sign up is Marriott. “The other chains are dragging their feet,” Lipton says. Hyatt and Hilton have their own software platforms to track their hotels’ performance, which they provide to customers but don’t share more widely through Green Hotels Global. Other independent sources, including Trip Advisor with its Green Leaders program, an eco-rating program called Green Key, and the U.S. Green Building Council’s LEED ratings, provide useful information about hotels. But none is definitive.
That said, Marriott has arguably emerged as the industry’s sustainability leader. It was the first to report, it shares its data through Green Hotels Global, and it is rated highly by Climate Counts. Marriott’s efforts are comprehensive, embracing issues ranging from youth employment to gay rights, Amazon rainforest preservation to the purchase of cage-free eggs.
But Marriott—like all of its rivals—is still struggling to balance the goal of sustainability with the need to grow its business. Despite putting a wide range of efficiency measures into place, the company has added rooms in recent years, and as a result its greenhouse gas emissions have grown from 3.19 million metric tons in 2007 to 3.55 million metric tons in 2012—an increase of 11 percent. Scientists say that businesses and individuals have to reduce their absolute carbon emissions dramatically to limit the risks of catastrophic climate impacts.
Of course, hotels can only do so much on their own. Until low-carbon electricity from solar, wind, or nuclear power becomes widely available, hotel companies probably won’t be able to meaningfully scale back their impact. Then there’s another problem: customers. In much of Europe and Asia, hotels require guests to insert their room-card keys into slots to get power; leave the room, and the lights go off. Marriott and Starwood’s Element brand have experimented with this technology in the United States, but customers rebelled.
Starwood has had greater success with Make a Green Choice, a program that allows guests to opt out of housekeeping (saving labor, energy, and materials) in exchange for Starpoints or modest food and beverage credits.
“That’s one of our most popular programs,” says Andrea Pinabell, Starwood’s Director of Sustainability and Global Citizenship. It’s been used more than 4.5 million times since its launch in 2009. Younger travelers, in particular, want hotels to go beyond the signs that say the hotel won’t replace your towels every day unless you leave them on the floor. They expect high-efficiency lightbulbs, healthy—and local—options on the restaurant menu, and recycling bins in every meeting room. As these travelers come of age and those who serve them command big corporate travel budgets, the industry investment in sustainability could end up being a very smart bet.