Does sustainability have an impact on sales and margin in hospitality?

Historically, the answer sometimes heard is ‘yes – it would be a great thing to do, but I just cannot afford it’. In the post-Covid world, the answer more commonly heard in hospitality is ‘yes – I just cannot afford not to’.

So, what actually is sustainability?

In 1987 the Brundtland Report describes sustainable development as one that satisfies the needs of the present without adversely affecting the conditions for future generations and whilst there have been various adaptations to this definition over time, it still fundamentally holds true today.

Many industries potentially have a negative effect on the environment and hospitality is no different, in fact, it is arguably one of the more impactful. Whether this is through food miles travelled, the use of disposable items or simply the consumption of water and utilities, there is little doubt that the hospitality sector holistically needs to be part of the positive sustainable solution.

But to achieve this positive outcome what impact will there be on the sales and margin within the sector, which has seen its profitability so significantly impacted by Covid?

At 4C Associates, we believe that there will definitely be an impact on sales and margin for those businesses willing to be part of the sustainable solution and it will be a very positive one. Taking a sustainable approach in hospitality will come with a wide range of benefits which generally will attract more customers and positively drive profitability.

But the advantages of being a sustainable business just doesn't stop there and ultimately profitability can be further built upon by:

• Reducing carbon footprint – the simplest way to do this is by either consolidating your deliveries, purchasing more locally, or increasing your delivery drop sizes.
• Reducing energy consumption will also go some distance to making your business more sustainable and may often provide greater ambience in the premises making it more attractive to your customer.
• Reduce waste – one of the more obvious solutions within hospitality, but this is not just about increasing yields. Waste can be reduced by not buying over-packaged goods, moving away from disposable products and towards concentrated products where logical, purchasing what you can in returnable containers, buying in bulk where feasible.

In a recent industry survey, over 60% of responders had made a conscious choice to opt for more environmentally friendly hotels, food and transportation, and significantly more said that they intended to make even more environmentally responsible hospitality industry choices in the future.

Consumers will often vote with their feet either positively or negatively with a direct impact on sales and profit and if you are a proactive sustainable business and ensure that you share with your current and prospective customer this has been proven to increase consumer trust in your business and hence sales and potentially further enhance profitability as customers are willing to pay a premium for a product with a sustainability sentiment.

So does sustainability have an impact on sales and margin in hospitality – well yes, and it’s positive. Its impact is meaningfully today and will only grow into the future!

Visit 4C Associates for more information.

By Gavin Bowen-Ashwin and Jonathan Williams