GREEN CONCEPTS IN HOTEL INDUSTRY

Hampton (F10078)

Immaculate Divya (F10079)

Jacqueline (F10080)

Ronald Riju (F10107)

INTRODUCTION

ECONOMY AND HOSPITALITY INDUSTRY

Tourism in India is the third largest foreign exchange earner, accounting for 2.5 per cent of GDP. It also makes a direct contribution to economy with significant linkages with agriculture, horticulture, handicrafts and construction.

There is concern of an economic slowdown caused by inflation, rising interest rates and higher fuel costs. The Eurozone crisis and the unrest in the Arab world are adding to the global uncertainties. The hospitality sector is one of the first industries to feel the effects of a challenging economic environment.

Economic factors impact the hospitality industry. And it does create an imbalance in demand and supply. These are, however, temporary in nature. There is immense potential for the tourism industry in India. Around 5.58 million tourists visited India, which is 0.58% of world tourism. India is an under-hotelled market. There is a shortage of one lakh rooms in the country. There is this myth that room rates in India are very high compared to other countries. This needs to be corrected. In Delhi, one would get a room for $200 a night compared to London where one would have to shell out $300-350 for a night. At times, here too rates touch the $350 level. But then, price is a result of demand and supply. 

Supply is being added every month. In fact, the Indian hospitality landscape has changed significantly. A few years ago, there were just a handful of players, now every international chain worth its name is here... 

The international hotel chains do not invest in India. They come through tie-ups with local players. They lend their brands and manage properties. Their global business model is to be asset light. Indian hotel operators follow a combination of business models: owning assets as well as management of properties.

HOTEL CHAINS PIONEER SUSTAINABILITY

Commencing with a slow growth at the start of the millennium, the Indian tourism industry has performed quite well in the last couple of years. The Hotel Industry comprises a major part of the Tourism industry. Historically viewed as an industry providing a luxury service valuable to the economy only as a foreign exchange earner, the industry today contributes directly to employment (directly employing around 0.15 million people), and indirectly facilitates tourism and commerce. 

Hotels are resource intensive and in order to reduce their impact, it is imperative to go "green!" Many greening initiatives are not expensive to implement and provide substantial benefits to the business. Across Asia, many independent hotels have also embraced green practices as one of their core strategies. In India, an independent business hotel, pioneered the initiative in the country by being established as Asia’s five star ECOTE certified hotel in 1977. Unlike developed countries such eco-friendly initiatives are still largely hoteller driven as Indian customers are yet to consider as concepts as significant value drivers. However, growing entry of global brands and entry of foreign travelers is likely to propel such international concepts in the midterm.

SERVICE OFFERED

Green hospitality may be a fashion statement but it has become a necessity of our times. The eco-friendly attitude among people is reflected in greater spread of eco- tourism and more green hospitality options as hospitality is all about creating experience for people. With the growth of eco-tourism the number of eco-friendly hotels in India is increasing. The hotels are opting for eco-friendly practices to attract green travelers. This practice also influences the bottom lines of the hotels as well as India’s image as a global destination in the near future.

Today the tourists have many options ranging from luxury hotels to eco-villages. However following eco-friendly practices is costlier as the initial installation costs are high. However considering the long-term benefits the hotels are willing to invest in it. An eco-friendly property’s value also goes up. Green hotels are otherwise named as responsible luxury hotels.

CHARATERISTICS OF HOTELS FOLLWING ECO-FRIENDLY PRACTICES

Landscape is done with minimum concrete structures. Less water consumption. Less electricity consumption. Less AC load. Improvement in ground water level through rain water harvesting. The above factors help in reducing the cost and consequently improve the bottom line. Greater emphasis on usage of natural eco-friendly materials.

ADVANTAGES

Long-term

Attract a large number of tourists to opt for green properties Larger employment opportunities to local people More deserted areas will become green Use of alternate energy sources will lead to sustainable and responsible tourism

GREEN CONCEPT

Hotels across the globe are going green. They are adopting environmental friendly practices to be carbon positive, water positive, among other things.

‘Eco hotel’ is a term used to describe a hotel or accommodation that has made important environmental improvements to its structure in order to minimize its impact on the environment. The basic definition of a green hotel is an environmentally-responsible lodging that follows the practices of green living. These hotels have to be certified green by an independent third-party or by the state they are located in. Traditionally, these hotels were mostly presented as Eco Lodges because of their location, often in jungles, and their design inspired by the use of traditional building methods applied by skilled local craftsmen in areas.

Today, the term has developed to include properties in less “natural” locations that have invested in improving their “green” credentials.

An eco hotel must usually meet the following criteria

Dependence on the natural environment Ecological sustainability Proven contribution to conservation Provision of environmental training programs Incorporation of cultural considerations Provision of an economic return to the local community

Environment-friendly hotel operation Is the future trend. Is increasing governmental regulation Comprises of greater proportion of “green” demanding guests Ensures sustainable profit: Good business in the long term.

More and more hotels are billing themselves as "eco- friendly," in response to a growing consumer desire to make more ethical purchasing decisions.

GREEN MARKETING

Green, environmental and eco-marketing are part of the new marketing approaches which do not just refocus, adjust or enhance existing marketing thinking and practice, but seek to challenge those approaches and provide a substantially different perspective.

Green marketing should fulfill 2 onjectives:

1. Imporived environmental quality2. Customer satisfaction

Green Marketing Mix

A model of a green marketing-mix should, of course, contain all 4P’s:

Product: A producer should offer ecological products which not only must not contaminate the environment but should protect it and even liquidate existing environmental damages.

Price: Prices for such products may be a little higher than conventional alternatives. But target groups like for example LOHAS are willing to pay extra for green products.

Place: A distribution logistics is of crucial importance; main focus is on ecological packaging. Marketing local and seasonal products e.g. vegetables from regional farms is easier to be marketed “green” than products imported.

Promotion: A communication with the market should put stress on environmental aspects, for example that the company possesses a CP certificate or is ISO 14000 certified. This may be publicized to improve a firm’s image. Furthermore, the fact that a company spends expenditures on environmental protection should be advertised. Third, sponsoring the natural environment is also very important. And last but not least, ecological products will probably require special sales promotions

The 4 P's are also transformed into the 4 C's. The four C's – customer solutions, customer cost, communication and convenience are taking the point of view of the customer (not the producer).

Customer solutions: These solutions go beyond selling physical products and present solutions to customer's problems. They imply knowing customers and their needs well and offering products and services that satisfy customer needs and that take into account social as well as environmental aspects.

Customer Cost: Customer Cost does not only include the financial price a buyer has to pay for a product or a service, it also considers the psychological, social and environmental costs of obtaining, using and disposing of a product.

Communication: “Green” communication goes beyond promotion, which is a form of persuasion and a one-way communication from seller to buyer. Communication is a process of interactive dialogue within which it is essential to build trust and credibility.

Convenience: Means that customers want to use products and services that meet their needs and that are easy and convenient to access and use

CORNELL STUDY

Consumers, particularly those in the higher income, higher education demographic (according to the Cornell study), continue to be concerned and cognizant about the environmental impact of their own behavior as well as that of the businesses they patronize. This represents an opportunity for hotels that are engaging in green practices to use these aspects of their operations to draw in valuable customers. It also acts a spur to those businesses that do not execute- or have suspended due to cost- sustainability initiatives. For these hotels and restaurants, the first step is to get back into the green game. It’s the right thing to do, and the Cornell study shows that consumers are willing to reward responsible behavior. For those hotels and restaurants that have already gone green, the question becomes how to effectively market that facet of their operations, or how to relaunch a marketing campaign centered on their environmental record.Positioning a hotel or restaurant as environmentally conscious or green requires a marketer to identify and publicize individual aspects of the business’s operation. Simply announcing that an enterprise is ‘green’ is not enough; consumers are receptive to details about your supply chain, specific practices and those green solutions that most affect them as guests, and which ones can mitigate whatever effect the consumers themselves are having on the environment as patrons. In hotels, where green initiatives can sometimes rankle guests (water conservation efforts that entail reducing linen changes come to mind), taking a cue from restaurants and focusing on the supply chain and local sourcing might be an effective way to communicate environmental priorities.The Cornell study recommends joining recognized green groups or adhering to guidelines set by industry groups with environmentally friendly goals and best practices. This is an excellent way to align your hotel or restaurant with other like-minded enterprises and to leverage the marketing reach of trade groups without making a sizable investment in an internal campaign. Speaking of internal campaigns, it’s important to remember that front-line employees can be the best ambassadors for going green. If your hotel can create buy-in for environmental initiatives among staff, that can go a long way toward convincing your customers that your establishment is serious and committed to creating environmentally sustainable operating procedures.

Enhancing environmental performance is a method of differentiating a hotel, and forward thinking hoteliers can successfully use this differentiation to deliver a competitive advantage and increased revenues. It enables them to generate additional positive publicity and engage with existing and new target customers. Having an effective environmental management system in place is becoming crucial for any business seeking to win business from the corporate business and public sector markets – many of whom will screen suppliers for proof of environmental policies and performance.

 It is possible for every hotel to measure their ROI from green initiatives, both in terms of the sales/marketing benefits and cost savings.

Whether the cost savings focus on water, waste, electricity (or almost anything else used or produced in the hotel), environmental management will measure these, before, during and after steps are taken to reduce the associated environmental impact. The most important measurement will then be visible directly on the bottom line – how much is financially being saved. The

Carbon Trust point out that with a few no-cost measures hotels could save 10% of business energy costs in the short term; and with a few low-cost options this could improve still further to around 20%.

ECOTEL

MORE and more hotels and resorts across India are now adopting eco-friendly concept of hotel construction and management and are going in for Ecotel certification. It is estimated that more number of hotels are likely to develop this concept in the next five years. In recent times, more hotels are going for Ecotel or Green Certifications. The Ecotel or Green certification is a concept of environmental responsibility for the hospitality industry, as ISO, CMM are for manufacturing, software or other industry, laying down norms for conducting business with a particular method. There are agencies which audit and certify hotels for these certifications, like the Green is certified by the US Green Building Council (USGBC) etc. However, it is not merely a marketing tag and by applying and adopting these standards, one has to adhere to environment-friendly practices. The process begins even before the laying of the foundation stone of the property, whereby one tries to slant the property against the sun, so that it does not heat up the interiors and utilize less energy for cooling.

INDIAN CUSTOMERS GOING GREEN

The percentage of Indian business travellers committed to environmental issues outnumbers travellers from Asia Pacific, according to a just released survey.

While 66% Indian travellers prefer environmentally more conscious hotels against 61% Asia Pacific travellers, 62% Indian travellers are even prepared to pay additional 10% for hotels with a better environmental commitment than a comparable hotel against 59% Asia Pacific travellers. Besides, more Indian business travellers (37% against 26% from Asia Pacific) are looking forward to carbon-neutral hotel rooms, latest by 2014, according to the Accor Asia Pacific Business Traveller Survey 2011, which mapped business travel habits in the region. The survey covered 10,000 business travellers from Australia, China, Hong Kong, India, Indonesia, Singapore, New Zealand and Thailand.

The green check by travellers is interesting because the hotel industry is not a producer of goods. Instead it's a big consumer of resources and products ranging from land, building material, furnishings, gadgets, energy and water to foods. The implication is that guests require the industry to influence both the making of these products and their consumption in an environmentally safe manner. At the same time, it becomes imperative for the industry to reduce its air, water and solid waste pollution, degradation of natural resources and loss to biodiversity.

MAKE A GREEN CHOICE

The concept of “Make a green choice” is being followed slowly by many hotels in India. In this campaign, the customer is given a choice of taking or not taking the housekeeping option. Those customers who do not take the housekeeping option for a day are rewarded with gifts. This has made the hotels build loyalty among the customers and build value among the customers.

FEW HOTELS THAT ADOPT THE GREEN CONCEPT IN INDIA

TAJ-EARTH CHECK

Taj Hotels, Resorts and Palaces, today a global hospitality chain with over 75 properties in over 60 locations, has been a steward of social responsibility since its founding in Mumbai, India, in 1903. As part of India's premier business house, the Tata Group, Taj Hotels and its holding company, the Indian Hotel Company Co Ltd, are committed to serving its many local communities by furthering education and skills training, particularly among rural populations; preserving Indian art, culture and wildlife, and promoting sustainable, environmentally sound operations.

In an endeavour to reinstate its vision and efforts to boost sustainable tourism and integrate environment management in all business areas, Taj Hotels Resorts and Palaces came up with EARTH (Environment Awareness & Renewal at Taj Hotels), a project which reiterates the conscious effort of one of Asia's largest and finest group of hotels to commit to energy conservation and environmental management. EARTH has received certification from EarthCheck, the only worldwide environmental certification program for travel and tourism.

Taj Hotels has joined the internationally-recognized EarthCheck benchmarking and certification system as an extension of its existing environmental policies. Taj Hotels has long recognized that as a leader it has an important contribution to make and a responsibility to demonstrate to others how they can be part of the fight against climate change. Having implemented the Environmental Awareness and Renewal (EARTH) programme, a project which began as a conscious effort to commit to energy conservation and other sustainability strategies, Taj Hotels was one of the first groups to join the tourism industry in its efforts. With environmental management gaining utmost importance across sectors and industries, Taj Hotels Resorts and Palaces will consciously focus on spearheading several efforts primarily in the engineering and energy conservation areas.Currently driven by several initiatives under the Eco Taj Policy, Taj Hotels map the best practices under EARTH and drive them across all areas of operations and new product development in the group. This also marks the Group's efforts in continuing to build and sustain awareness of discerning customers who are socially conscious.

EarthCheck will provide the EARTH project with independent and comprehensive proof of their environmental commitment through the monitoring and improvement reports EarthCheck will produce for Taj Hotels each year as part of the certification procedure. Taj Hotels commitment to sustainability has its pragmatic purposes as well. With a vision to create sound environment management in its operations as well as product development strategies, Taj Hotels has always believed in improving the quality of life of the communities and has been committed to environment conservation. Caring for and protecting the environment is an essential part of corporate ethos.

ITC HOTELS

ITC has emerged as a global green leader in the hotel industry. When ITC luxury hotels group got the LEED (Leadership in Energy and Environmental Design) Platinum rating recently, it became the greenest luxury hotel chain in the world. The status was earned on the back of the group’s commitment to green buildings, which are energy efficient, utilise renewable energy, conserve and recycle water, and manage waste. Saying that the LEED platinum certification of ITC's luxury hotels is a further endorsement of their repositioned credo of ‘responsible luxury’ and a noteworthy recognition of their two-decade old sustainable development endeavours, Nakul Anand, executive director, ITC Ltd, adds, “The LEED platinum rating reflects our conscious effort towards demonstrating environmental stewardship. It is a source of competitive advantage not only because it subserves a larger national priority but today guests also prefer to endorse environmentally friendly hotels.” Even the headquarter of the ITC hotel division located in Gurgaon near Delhi is in the ITC Green Centre, which is the first amongst large buildings in the world to earn LEED Platinum rating. ITC Sonar is the world's first hotel to get carbon credits. ITC Maratha, ITC Windsor, ITC Gardenia and WelcomHotel Sheraton Rajputana get their power supply from off-site wind turbine generators. Delhi's ITC Maurya has deployed paraboloid solar concentrator on its roof-top to cater to its thermal requirements. Besides, all ITC premium luxury hotels claim to consume 18-29% less energy than what has been recommended by the United States Environmental Protection Agency (USEPA) for large size luxury hotels.

WelcomEnviron is ITC Hotels' vision for a green world. It's a multi-faceted programme started in order to propagate environmental causes in the cities where ITC Hotels' hotels are located. With the guiding principle of 'Reduce, Reuse and Recycle', each hotel has its own programme, encompassing local participation, creating awareness among employees and internal conservation.  All ITC's luxury hotels have been accorded the highest rating: LEED Platinum (leadership in energy and environmental design) making it the `greenest luxury hotel chain in the world'. This distinction is an endorsement of ITC Hotels' credo of `Responsible Luxury' -an ethos that integrates world class green best practices with contemporary design elements to deliver the best of luxury in the greenest possible manner. ITC's luxury hotels have been accorded the highest rating of “greenest luxury hotels chain in the world” for their environment-friendly efforts.

All eight luxury hotels of ITC – two each in Mumbai and Bangalore, and one each in New Delhi, Kolkata, Hyderabad and Agra – have been rated LEED Platinum (Leadership in Energy and

Environmental Design) by the US Green Building Council (USGBC) for their performance to the highest standards of energy, water and waste efficiency.

This uniquely positions ITC as the first hotel chain in the world to have all its premium luxury hotels accorded this highest rating. It exemplifies the credo of ‘responsible luxury' adopted by ITC's Hotels Division – delivering globally benchmarked quality, services and luxury in the greenest possible manner.

KAMAT HOTELS INDIA LTD

 The basic frame structure is in puzzolana cement, which contained recycled fly ash. They have also used maximum recycled material in all our interiors. Even the hangers in the rooms are made using pure saw dust and not wood or plastic.

LEELA PALACE

The Leela Palaces, Hotels and Resorts may be one of the youngest hotel groups in the country, but its approach towards the environment has been quite seasoned. There is an endeavour to slash the environmental impact of products and services. Eco-friendly practices ensure higher energy efficiency, and optimal use of raw material, which are obtained from sustainable or renewable sources wherever possible. The Leela Palace, Bangalore, heats its swimming pool water with the help of solar panels installed on the roof of the porch. Even its newest property The Leela Palace, New Delhi, has joined other group properties in the environment journey. State of the art sewage treatment plants treat wastewater through a multi-stage process before reusing or recycling it.

OTHER HOTELS

Some of the younger hospitality companies are even building their businesses on the environment plank. For example, Concept Hospitality's new brand The Fern is aiming to become a trademark for environmentally correct hotels in the country. Since it's a new chain, the Fern hotels are built keeping in mind optimization of consumption of natural resources. Besides, energy conservation is taken care of right from the initial stages. More importantly, the staff is trained in environmental practices for six months. Green teams have been set up in each hotel. Innovation is at a premium. For example, an eco-button has been installed in each room. Pressing the button pushes up the temperature of the room by 2°C, thereby cutting energy usage. The energy saved is calculated in rupee terms and mentioned on a certificate given to guests at the time of check out. Embracing sustainability is becoming increasingly important in today's world

with its high eco-awareness levels. Going green even gives us a competitive advantage in a fiercely competitive world.”

Concept Hospitality has also joined hands with HVS Eco-Services to promote eco-friendly hotels or Ecotel concept, which is a globally recognised hallmark of environmentally sensitive hotels, in the country. Ecotel certified hotels have to meet stringent criteria on energy conservation, water conservation, solid waste management, employee environmental education, and environmental commitment, denoted by five globes.

Radisson Blu Hotel, Delhi, too, has got silver certification from EarthCheck, which is the official green certifying agency for parent company Carlson Hotels. Following the parent company, the hotel also subscribes to the UN Global Compact, which is a UN initiative to prompt businesses pursue socially and environmentally responsible practices. The hotel has installed energy saving cold cathodes, CFLS, LEDs and tube lights. Similarly, the rooms have double glazed windows to cut down energy consumption on air-conditioning, says Javed Ali, vice-president & general manager, Radisson Blu Hotel Delhi. He adds, “There is a financial advantage in lower energy bills resulting from using energy efficient technology. Customers prefer and encourage hotels that adopt eco-friendly practices. Conforming to recognized green business practices also helps the hotel to incorporate quality business practices.”

Similarly, The Imperial in Delhi is undertaking conservation of electricity by dimming lights in common areas when not in use, providing natural products like herbal soaps, harvesting rain water and using drip irrigation. Going green is an ongoing endeavour at the hotel. Besides, the hotel is focused on creating eco-awareness amongst all its stakeholders by holding art competitions, undertaking cleanliness drives and hosting green luncheons. The future plans include putting up CFC-free equipment in cold storage and refrigeration plants, upgrading pumps to cut down energy consumption, installing solar lighting fixtures and solar water heating systems. Going green makes business sense because it enables in optimizing the use of resources.

With the awareness about the environment only rising by the day, the hotel industry will have to constantly keep on reinventing itself to optimize the use of resources for that competitive edge.

CONCLUSION

BENEFITS:

Today the word Green associated with anything tangible or intangible implies sustainability of that entity. Green Building is a science which follows the concept of constructing buildings using processes which are environmentally and economically responsible throughout a building's life cycle right from the construction to the maintenance and later on its demolition as well. Green buildings results in efficient usage of energy, water and resources. It creates an environment that keeps in mind the inhabitant’s health are designed in such a way which helps in reducing waste, pollution and environmental degradation.

There are various economic as well as environmental advantages of a green building:

Green building process helps in increasing the life of the building Demolition and construction wastes are minimized Incorporate water and energy efficient technologies Indoor air quality is better Include renewable energy as a source of energy in the building besides the conventional

energy Ensure sustainable profit: Good business in the long term. $ and cents!

Other Benefits include,

Gaining competitive advantage by being a leader in the sector; Customer loyalty; Employee retention; Awards and recognition; Regulatory compliance; Risk management; Increased brand value.

CHALLENGES

The challenges of going green is that,

o Ignorance and indifference.o Lack of information and awareness on environmental issue.o Lack of motivation.o Not much incentive from government to assist in going green.o Most environmental-friendly products are imported, thus high cost and more

effort

o needed in sourcing.o Many new green technology not yet introduced in Malaysia, thus one need to be o innovative and creative.o Effort not well appreciated by certain guests.o Achieve international recognition.o Hotel is not designed right from the beginning.o Architect & engineers not knowledgeable in green/eco planning and design.

Hotels and restaurants should be prepared to deal with these challenges with solid green practices. Now that it seems clear that consumers are willing to pay a premium to enjoy the fruits of such practices, there is little excuse not to engage in them; in fact, it is advantageous to promote them and publicize them. We may not be in the going green heyday of the early 00s, but for those hotels and restaurants that position themselves like they still are, the benefits  can be great.