Going green is no longer just an option for the hospitality industry, it's a necessity. Those of you who fail to address energy conservation, recycling, renewable resources and waste-reduction do so at your peril - and ours. Rosalind Mullen reports
You can't get away from headlines about global warming - whether they're about hosepipe bans in the UK, snow in Australia, hurricanes in the USA or devastating tsunamis and floods in Asia. The temperature rise may seem slight - it's on target to rise by between 1.4ºC and 5.8ºC by 2100 - but we can all see that it's having a serious effect on the environment.
What's not always taken seriously, though, is the fact that we're causing it through using and wasting energy in our homes and at work. To baffle you with science for a minute, global warming is triggered mostly by the increase in greenhouse gases in the atmosphere, including carbon dioxide (CO2). This gas makes up 80% of emissions from industrialised countries - being released from burning oil, petrol and natural gas - and the increased use (and waste) of these means the situation is likely to get worse.
To tackle the impending disaster, the UK Government signed the Kyoto Treaty 1997, which came into force in February 2005. Under this agreement, 164 countries have committed to reduce their greenhouse gas emissions, with the UK pledging a reduction of 12.5% from 2008 to 2012.
Such is the UK Government's commitment that its 2003 Energy White Paper set a further target for the UK to reduce carbon emissions by 60% and to create a low-carbon economy by 2050 through a combination of energy efficiency in the short term and use of renewable resources in the long term.
Among the Government's financial incentives, it is providing £150m for energy-efficient measures, renewables and enhanced capital allowances. And let's face it - if the Government is dipping into its pockets, you know it means business.
So what has all this to do with the hospitality industry? Quite a lot, according to a study produced by the Government-backed Carbon Trust over the summer. This showed that, of the £300m-worth of energy used across all sectors this summer, hospitality was responsible for wasting £53m through poor energy efficiency. This equates to the annual carbon emissions of a city such as Norwich (600,000 tonnes).
Such waste is needless as well as costly. Buildings account for 50% of all the energy consumed in the UK, and advisory body Hospitable Climates reckons that most operations could save a minimum of 10% of energy through better efficiency - which in a hotel, for instance, could mean as much as £400 per bedroom.
Hugh Jones, solutions project director at the Carbon Trust, reckons that even the most environmentally aware hospitality businesses could make further savings of 10%-15%.
Certainly, if you don't begin to make such savings, it will start to cost you - big time. As you must have noticed, energy prices are soaring. Around the world, wars are being fought over oil while, back home, our North Sea oil and gas reserves are running low, meaning our dependence on imports will increase and our domestic and business bills will keep on rising. Although wholesale energy prices have recently fallen, energy companies are looking ahead. British Gas, for instance, is hiking prices by 12% for gas and 9% for electricity.
Some businesses are well prepared, however. Peter Bramich, chairman of the Institute of Hospitality, and managing director the 36-bedroom Deans Place country hotel in Alfriston, East Sussex, now saves £19,015 a year on energy costs (44% of previous expenditure). This was achieved through taking out a £22,000 interest-free loan from the Carbon Trust to implement energy-saving measures.
That said, Bramich says proposed hikes in electricity costs mean he will be paying 9.272p per unit a day, up from 3.98p, and 5.49p per night, up from 2.19p, increases which he will find tough to fund despite his energy-saving measures. But going green can offset only a fraction of these punishing costs, and Bramich thinks the Government should step in to control energy prices before small businesses go under.
Of course, energy is just one aspect of the vast environmental problem, which embraces water shortages and landfill issues, too. No surprise, then, that the groundswell of support for environmentally sound policies is coming from all directions - the general public, investors, government bodies and the TUC.
Hospitality is doing its bit, but it needs to do more. Linda Martin, programmes director for Hospitable Climates, says most of the big hotel companies, including Marriott and Sheraton, have signed up, as have major pub chains, contract caterers and caterers in the public sector, as well as local authorities.
There are, however, still many which lag behind either through ignorance of the benefits of going green or through inertia. "Those businesses that continue to avoid or ignore the message to improve energy efficiency and reduce carbon emissions are likely to face a cold front in terms of business survival," warns Martin. "The eco-market is upon us and consumers are beginning to be more discerning."
This sentiment is backed by Rebecca Hawkins of Oxford Brookes University, Considerate Hoteliers and Hospitable Climates. She says about 80% of tourists claim they would prefer to stay in accommodation that doesn't harm the environment or community. The Co-operative Bank's Ethical Consumerism Report of 2005 claims ethical consumerism - the desire to patronise goods and services whose production does least damage to the global environment - is worth about £25.8b a year.
Certainly, a bonus of going green is good PR. With younger generations being educated in the need to preserve the environment, guests are increasingly happy to stay in a hotel that takes green issues seriously. The key, of course, is marketing that fact.
Jones at the Carbon Trust agrees. "Being environmentally aware doesn't just work at a cost level, but at a reputation level, too," he says. "Consumers are starting to value businesses, from supermarkets to hotels, that are environmentally sound."
Going green also works at the luxury level. At Gordon Campbell Gray's swish One Aldwych hotel in London's West End, environmental concerns have been on the agenda for years, driven initially by a personal sense of responsibility to the environment (see case study, right). "We never sat down and looked at the costs," says general manager Simon Hirst. "We just felt it was right." He points out that while, a decade ago, no luxury hotel would have dared not to have a power shower, guests nowadays accept a rain shower - and it saves from 30% to 50% of water. Guests also accept that they now have an entry card that will switch the lights off when they leave their room. And instead of burning lights in an empty guestroom at turndown, the maid will switch on just one lamp in the entrance.
All this said, there has to be a balance between providing luxury and going green. Hirst admits that infrequent towel-changing is a difficult policy for a luxury hotel, but adds that mind-sets are changing and most guests support the other measures.
Although One Aldwych wasn't driven initially by an intent to make savings, Hirst confides that seeing the results is motivating. For instance, simply turning the hot water temperature down from 70C to 62C saves about £1,500 a year. "People are looking at their bills," he says. "We've cut ours by 10%-20%, but we should have done it 10 years ago. Now that prices are going up, the hospitality industry has no choice."
Businesses which don't improve their environmental policies can look forward to continuing legislation and environmental taxes from Westminster and Brussels that will penalise those which don't get their act together. One such new law is the European Performance of Buildings directive, which will see "energy labelling" of buildings, rating them according to their energy efficiency.
The Climate Change Levy, or carbon tax, on non-domestic buildings will be increased from April 2007, in line with inflation. It was introduced in April 2001, increasing energy costs in hospitality businesses by about 15%. According to Hospitable Climates, it's expected to lead to a reduction in production of at least 2.5 million tonnes of carbon a year by 2010.
The oft-forgotten Landfill Levy will bite harder, too. Currently £21 per tonne, this tax is set to increase by £3 a year until it reaches £35. Figures from the Centre for Environmental Studies in the Hospitality Industry show that the average guest in the UK generates 1.1kg of waste per night, so the industry cannot afford to ignore the implications.
The Government is also set to put more onus on recycling waste - bear in mind that food waste alone comprises 35%-50% of the total waste from the industry.
Professor John Forte says: "If businesses don't comply voluntarily, they'll pay through the nose. They're not asking people to make sacrifices; the big carrot is that it will increase operating profits. But take note that a big stick is being used."
Small businesses may worry about the cost of new equipment, but the Carbon Trust suggests that simple policies such as switching machines off after use, turning the heating down in warm weather, or using sensors on heating and lighting to trip them off when not needed can make real savings in your energy bill. Reducing the total by just 20% could add as much to your profits as a 5% increase in sales.
Going green, then, need not be onerous. There are plenty of industry organisations that offer free help and advice, such as the HCIMA, Hospitable Climates, WRAP and the Carbon Trust.
And for large equipment like plant there are incentives, too. For instance, the Government has introduced Enhanced Capital Allowances of 100% in the first year on investment in eligible green equipment, such as pipe insulation or thermal screens (www.eca.gov.uk). There are also interest-free loans from the Carbon Trust and Loan Action Scotland to enable SMEs (small to medium enterprises) to upgrade or replace plant with more energy-efficient equipment (www.est.org.uk).
But it won't just be money you're saving; it's also your future.
- Maintain custom from the increasingly environmentally aware public.
- Prevent energy costs from soaring - the Carbon Trust reckons that the reduction of carbon emissions through energy efficiency can lead to 20%-30% savings in energy costs.
- Avoid punitive taxes from non-compliance with legislation.
The Kyoto Agreement
The UK Government signed the Kyoto Treaty 1997, which came into force in February last year. Under this agreement, 164 countries (notably, not the USA) have now committed to reducing their emissions of carbon dioxide and five other greenhouse gases, or to engage in "emissions trading" if they maintain or increase emissions of these gases. This represents more than 61.6% of all worldwide emissions.
The UK has pledged to attain a greenhouse gas emission reduction of 12.5% between 2008 and 2012, compared with 1990 levels.
Investing in the long term
Professor John Forte, a Hospitable Climates principal, says that chains in particular need to do more to bring policies that incorporate the environmental ethos into management. "Many don't have a worthwhile policy, although most make an environmental statement because it's good PR," he says.
One problem for hospitality groups is convincing the board that they need to invest in the long term. UK operators are often short-sighted, looking for payback after two years. "It's not the fault of companies," says Forte, "but the way the City works."
What should make financial directors sit up and listen is the fact that going green will translate to reduced costs, which means increased profits.
In general terms, going green is about reducing waste - whether it's energy, refuse or resources. According to Forte, lighting represents 20% of total electricity costs. Lights are often left on in broad daylight, in unused corridors and in unoccupied rooms. Another example of energy waste is found in kitchens, where both lights and equipment are left on regardless of whether they're needed.
Water is similarly wasted and can be used more sparingly without compromising hygiene or quality of service. Simple policies include not leaving taps running, and more adventurous solutions include flush-saving devices or the waterless urinal.
"We need to change our culture," says Forte. "If the Government was serious, it could control the price of, say, a solar panel and it would create the same effect as calculators or computers in that demand would pull prices down."