One of the first things someone will learn about the hotel industry is we love some good top-line indicators. We make small talk around occupancy and room rates. We throw out all kinds of figures when discussing the business: market share, demand, inventory, pickup, forecasts, etc. We love the data even more for enabling our common thread: benchmarking. Enabled through sharing (or buying) certain types of data, industry executives and hotel staff routinely scrutinize performance, constantly size up the competition and plot that next deal.
Given our obsession with percentages and ratios, it is surprising it has taken so long for similar cost-item indicators to equally be shared and compared. A study was released recently, offering benchmarks for energy and carbon in several U.S. and some international markets. Through the Cornell “Hotel sustainability benchmarking” study, we have an industry-wide, industry-led effort to benchmark energy performance and carbon emissions.
This study was released amid a similar momentum in attempts to gather utility data in order to understand the scale and drivers of its usage in buildings. At least a half dozen other major government, private, and non-governmental efforts are underway to gather similar data, in addition to municipal or state initiatives requiring buildings to submit their energy and water data for benchmarking. These various initiatives serve different purposes, and some have slight overlap.
A relevant study
As a study for the industry and by the industry, we undertook this hotel-centric exercise to be as relevant as possible to our own audience in several ways.
We took the principles of other industry indicators: first filtering by geographic location and second by market segment. Rather than trying to start by coming up with a complex algorithm, we first set the premise that benchmarking and data use is primarily relevant within the context of its location. Therefore, via the CHSB a hotel in Atlanta can see how it stacks up against the range of energy usage indicators against more than 30 other hotels in the same region.
Second, the study included participation from many of the world’s largest hotel companies, including: InterContinental Hotels Group; Hilton Worldwide Holdings; Marriott International; Starwood Hotels & Resorts Worldwide; and Wyndham Hotel Group—in addition to smaller companies based outside the U.S., representing significant industry-wide collaboration and buy-in for the information’s use going forward.
Third, with more portfolio-wide data becoming available, in this first attempt we managed to compile and analyze data for nearly 2,000 hotels by piggybacking each respective hotel company’s struggle to amass its own portfolio-wide energy data. Fourth, the research uses multiple metrics meaningful to hotels, normalizing per room and per occupied room, and separating out carbon per the Hotel Carbon Measurement Initiative so a hotel can interpret its performance in metrics in addition to the generic, catchall buildings metric of square footage.
Finally, by adding carbon benchmarks and using the HCMI metric, we can streamline carbon footprinting exercises and reduce requests from clients to individual hotels and enable real action. For example, we worked with a citywide event in Dallas earlier this year that booked 20,000 room nights in its room block. Multiplying the CHSB’s median carbon footprint per occupied room of 35 hotels in Dallas by the event’s total room block, we were able to quickly calculate the carbon footprint using this default figure. This was then factored into the remainder of the footprint, which will then be offset by planting nearly 450 trees through American Forests. We hope the data will enable further uses of carbon offsetting within hotels, as we hoteliers are laggards behind airlines, trains, rental cars and even shipping companies—which all offer carbon offsetting add-on options for their customers’ transactions.
Likewise, now having a base set of indicators we can further evolve the discussion of energy drivers, which are definitely unruly and arguably much more complex than drivers of occupancy or average daily rate. The study delves into a few of the hundreds of potential drivers, identifying a complex dilemma that will invoke further research for years to come.
Leveraging the data
One of the most interesting observations is buildings of similar size, construction year, amenities and building equipment can have wide ranges of energy use, as operational procedures and guest engagement can be significant drivers.
I would argue the topic of energy usage and energy management has long been undervalued and is now coming to the forefront, with energy benchmarking becoming more commonplace even in residential situations where homeowners can benchmark their consumption against their neighborhood or neighbors, and use a plethora of new smart technologies to reduce consumption. And we’re even seeing this carry through to hotels. For example, the Westin Singapore’s pilot Green Rooms allow guests to see how their specific room’s energy usage compares against the hotel’s average and be incentivized to reduce consumption. Thus, we are seeing enhanced engagement opportunities, increased awareness among consumers and further opportunities to leverage the industry-wide data in tandem.
The first CHSB study is undoubtedly limited and will need to improve over time. More than half of the data submitted was discarded for not meeting conservative data validity tests. The data were concentrated in U.S. markets and have yet to serve the purpose of filling the benchmarking void left by Energy Star abroad (for example, a major point-scorer to LEED certification is a high Energy Star rating; however, that rating is only available in the U.S. and Canada, and we struggle with benchmarks to compensate outside North America). And more data will be needed in future studies to offer meaningful benchmarks by each segment, rather than collapsing together all categories of full-service hotels.
However, having instituted an annual, academic exercise we have now set the trajectory to improve this research over time, increasing its precision and value to the industry. After all, isn’t it about time the hotel facilities engineer got his own metric to discuss, analyze and compare?
Eric Ricaurte works with the hotel industry and its leading companies to advance sustainability through reporting and measurement. His current activities include consulting, industry engagement, academic fellowship, column writing and publication authoring.
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