3 reasons why sustainable hotels are the future of the hospitality industry

The planet is becoming increasingly concerned with the effects of climate change and this has led to consumer demand for sustainability and brands that drive positive change. In terms of the hospitality industry, growing numbers of guests are favouring sustainable hotels when they search for travel accommodation, especially those from younger generations. 

Let’s explore what sustainable hotels are and why they are the future of the hospitality industry.  

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What is a sustainable hotel?

A sustainable hotel is a hotel that activity strives to promote its commitment to corporate social responsibility. The business adheres to a series of eco-friendly measures that enable it to reduce its carbon footprint and limit its negative imprint on the environment. Although sustainability is a growing trend in most sectors these days, it is particularly relevant to the hotel and travel industry, which is renowned for consuming high levels of natural and man-made resources. 

Examples of eco-friendly measures that sustainable hotels might implement include:

• Switching to energy-efficient/LED lighting
• Installing intelligent water management solutions to limit water waste
• Installing solar panels to reduce carbon emissions 
• Using eco-friendly cleaning products
• Encouraging guests to reuse linen and towels
• Restricting or eliminating single-use plastics (for example, using recyclable and biodegradable packaging for guest toiletries)
• Recycling
• Sourcing local suppliers for food and beverages
• Planting a rooftop garden to offset the hotel’s carbon footprint
• Encouraging paperless check-ins
• Promoting ecotourism (for example, offering courtesy bicycles to guests)
• Training staff on sustainable waste management processes

Why are sustainable hotels the future of the hospitality industry?

The most obvious benefit of driving sustainability in hospitality is that eco-friendly industries help to create a better planet for future generations. But there are also a number of benefits in terms of business growth and development.

We are now going to share three major benefits of including sustainable practices in your revenue management strategies to help you understand why sustainable hotels are the future of the hospitality industry.

Sustainable hotels promote revenue growth

Sustainability is linked to revenue growth. A sustainable strategy is cost-effective in the long term and increasing segments of the market are demanding sustainable hotel brands.

For example, switching to energy-efficient lighting and intelligent water management solutions can help you reduce your utility costs. In fact, according to the Sustainable Hospitality Alliance, a sustainable building is at least 20% more resource efficient. This can drastically reduce your hotel’s outgoings and boost your profits.

Sustainable hotels also generate more revenue because they have a Unique Selling Point that appeals to eco-minded consumers. This helps them attract a larger segment of the market and generate more sales. What’s more, studies have shown that many guests are willing to pay a premium to stay at a hotel that follows environmentally friendly and sustainable practices. This is especially true if your hotel obtains validation through official sustainability certification. 

All this can have a big impact on your long-term revenue growth strategy.

Sustainable hotels enhance customer value perception

With growing concerns about climate change and increased global awareness of the importance of protecting the environment, hotels need to adapt to consumer demand for sustainability in order to stay relevant. Now, more than ever, travellers value brands that promote transparency, sustainability, and circular economies.

Guests are more likely to trust sustainable hotels as they see them as being responsible brands that don’t just care about their business results; they also care about their impact on society and the planet. Plus, if a guest sees that your hotel cares about the environment, they are more likely to believe that you will care about their guest experience, too. This enhances your consumer value perception and helps you attract more guests to your hotel. 

Sustainability doesn’t just help you attract more new guests, either. Sustainable hotels are also more likely to attract repeat customers. In fact, according to a report by Capgemini, 77% of consumer products and retail organizations found that sustainability leads to increases in customer loyalty. 

Sustainability is becoming a legal requirement

Running a sustainable hotel doesn’t just boost customer value perception. Increasing numbers of investors and shareholders recognize the importance of promoting sustainability, especially given the increasing demands of environmental regulatory compliance. 

In fact, sustainability is fast becoming a legal requirement, not just a “nice-to-have”.

For example, governments around the world have already started introducing initiatives such as carbon taxes and restrictive water policies to encourage sustainability in business. In the UK, the recently enacted Environment Act of 2021 is promoting a number of schemes aimed at reducing plastic use and food waste. And the EU’s recently launched Corporate Sustainability Reporting Directive (CSRD) will add to growing investor pressure for hotels to report on sustainability performance.

All this means that sustainability is no longer about marketing; the concept needs to be incorporated into all your business operations as soon as possible. By developing a sustainable hotel that complies with these sustainability regulations and respects the environment, you can secure your long-term brand positioning as a quality tourist attraction that generates sustainable revenue growth.

KPIs for Sustainable Profitability