Green Hotels: The Business Case for Sustainability

green-coverA chat with the authors of High Performance Hospitality: Sustainable Hotel Case Studies

I had the chance to catch up last month with Amisha Parekh and Michele Diener, two of the three authors of High Performance Hospitality: Sustainable Hotel Case Studies, a lodging industry textbook.  At a time when the Westin is launching its Element line and other hotel chains are playing up their “green” credentials, this book is the first in-depth analysis of the business case for sustainability within hotels.

Amisha and Michele, who also wrote the book with their friend and classmate Jaclyn Pitera, met while they were dual-degree students at the University of Michigan’s Ross School of Business and the University’s School of Natural Resources and Environment.  This book was the outgrowth of a joint master’s project.  Michele currently serves as the Director of Sustainability Strategies at MGM Mirage, Amisha is a strategy consultant for Deloitte, where she is part of the firm’s sustainability team, and Jaclyn is in her third year of the joint program.

The book focuses on eight hotel properties and features detailed analyses of their respective sustainability efforts.  What differentiates this text from other coverage of “green” business is its focus on the details.  As Michele said, “There was no comprehensive book taking a property from design, to construction to operation…from soup to nuts, how a hotel can be more sustainable.  Our intent was to get this information out there to the industry in a very simple way, with a lot of checklists, lessons learned, etc.”

She continued, “There is a matrix at the front of the book summarizing all of the green initiatives [the featured hotels] are doing.  We also categorized the programs based on complexity (how difficult to implement), guest transparency (would it make a positive or negative impact on guests), etc.”

Of course, the economy is top-of-mind for everyone these days, and during our conversation this was a main piece of the discussion.  Amisha and Michele explained that the book is “the business case for sustainability” in the lodging industry, with a focus on the financial benefits to the company to implementing certain steps.  As Michele explained, “At a time when [hotels are making cuts], management sees sustainability as a benefit, helping the organization to consume less water, less energy, and therefore, save money.”

Key takeaways
According to the authors, below are some of the key takeaways from the study.  Although they were derived from their hotel analysis, they are very relevant to all organizations interested in driving change around sustainability:

  • Employee education is key – Green is not something for just the green team to implement, but rather must be part of the company culture.  If it’s part of the culture, it is much easier to implement (and less likely to be cut)
  • Experimentation is important – Some of the products and programs and technologies that the authors studied are new to the industry.  What they found, Michele said, is that “if it’s new to your property, you need to experiment with it, in a few rooms, a floor, at your home –for example a manager installed a low-flow shower head at his home to see how it worked.  Through experimentation, an organization can identify the projects that work, and then execute them more effectively.”
  • One size does not fit all – Amisha said, “We looked at the Ritz Carlton in San Francisco and the Comfort Inn and Suites in Revere, MA.  They both were very strong in educating people about sustainability.  However, the Ritz was behind the scenes, whereas the Comfort Inn was more ‘in your face about it’ to guests.”
  • Financial drivers to going green are there – either from less start-up costs or lower ongoing costs

The authors studied very different hotels, balancing their selection across a number of variables, including size (90-900 rooms), price (mid-rate, convention, luxury), location (urban/rural), diamond rating, guest type (transient, government, business, conventioneer).  In addition, they also considered whether the hotels, all of which are in North America, were existing vs. new buildings, as well as branded versus independent.  However, all were considered green in some respect.

The book did not address the consumer.  However, when asked how customers have responded to hotel sustainability, Michele said, “Anecdotally, the consumer is not willing to pay more for [the green] rooms.  But it has become more of the expectation.  When companies are contracting with hotels for meeting and conventions, those questionnaires now include questions on lighting, recycling, green attributes.  If you want that business, you need to make those efforts.  Corporate clients are increasingly green options.”

The authors also were very grateful for the support they received from the following organizations:

If you’re interested in reading a portion of the book, here’s a link to downloadable chapter, which includes the book’s foreword, executive summary, as well as a case study on the Comfort Inn & Suites in Boston, MA.

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Key findings from Direct Marketing Going Green panel

875191As I wrote before, I was on a panel titled “DM Going Green – Separating Fact and Fiction” on January 13.  The session, which was organized by the New England Direct Marketing Association, was interesting and the conversation was lively.

Floyd Kemske, who serves as Editor of NEDMA News and Creative Director at Amergent, wrote up a nice summary from the event.  As it is not online yet, I’m pleased to include select portions of the piece below:

****From NEDMA News****
The session, moderated by Mariah Hunt, Senior Production Manager at Digitas, featured four practitioners from the front lines of the campaign for industry sustainability.

Each panelist provided a unique perspective on sustainability, its achievability, and its benefits. Ben Grossman, Director, Green Marketing & Sustainability Practice, Grossman Marketing Group , for example, has been instrumental in developing a model program for his company, which offsets 100% of its energy use through an organization called Renewable Choice Energy. This allows Grossman Marketing’s customers to credibly claim they make their printed collateral with certified wind power. In addition, Grossman has replaced petroleum-based window material in its window envelopes with corn-based material, which is both compostable and recyclable. Although the corn-based windows cost more, Grossman said, the company absorbs the premium so its customers pay the same as if they’d bought the petroleum-based ones.

According to Grossman, the company’s sustainability practices confer benefits in terms of increased sales, reduced costs, and more productive recruitment. But he advised the audience that sustainability isn’t something you can just say you do. “Customers are smart,” he said, “and they are conversant with the issues. They can discern a real commitment.” Transparency is important, he said. “Give people a way to dig down and investigate.” If you work at it and you are sincere, he said, you can use sustainability as a competitive advantage.

Mary McCormick, Senior Account Manager, Neenah Paper Inc., said her company was committed to manufacturing products with high post-consumer waste content, FSC-certification, and reduced carbon footprint. Before delving into some of the technical aspects of sustainable paper manufacture, she may have confirmed Grossman’s assertion about competitive advantage when she noted that the invitation for President Obama’s inauguration was printed on Neenah paper, chosen because of the company’s sustainability practices.

FSC certification, which is the premier paper certification standard, guarantees a chain of custody for pulp products from the harvest site to the finished product. It doesn’t simply guarantee sustainability. It also addresses social issues (e.g., rights of indigenous peoples) and forest recovery as well. Neenah’s website offers a calculator you can use to find the environmental savings you will achieve by using FSC papers. Neenah has also developed no-new-tree papers, including one manufactured from sugar cane bagasse.

The panel presentations were followed by a lively discussion in which some members of the audience sought proof that sustainability practices could increase sales. None of the panelists could cite such proof, but Ben Grossman stepped up and said that if anyone in the room wanted to conduct a test to determine whether a legitimate green logo would boost response to a mailing, his company was willing to subsidize it. There’s a man who backs up his belief in sustainability!

EPA Revises Green Power Partnership Program Requirement

gpp_logo180I was glad to see that the U.S. Environmental Protection Agency (EPA) revised its Green Power Partnership program requirements last weekThe Green Power Partnership is a voluntary program that encourages the use of renewable energy in the United States.

My firm was chosen to be a Green Power Partner in 2008 because we offset 100% of our energy with Green-e certified wind power – we have continued the initiative and have gotten a number of our suppliers to join our consortium (we work with Renewable Choice Energy).
Below are the notable changes:

  1. Minimum purchase percentages have risen for an organization to be able to be included in the program
  2. Program requires purchase of new renewable energy, rather than from existing sources.  As the announcement stated, “The Partnership’s primary objective is to reduce the greenhouse gas intensity of the U.S. power sector by increasing renewable energy supply.”
  3. Window for making an initial green power purchase has tightened – new partners will only have 6 months (rather than the previously-allowed 12) to make an initial purchase.  I like this change because companies won’t be able to market their involvement in the program without making the necessary investment in renewable energy…if it were up to me, I would shorten the window even further.

These are encouraging changes, as participating companies will now have to make more substantial investments in new energy sources in a shorter timeframe, helping to weed out the types of companies that join to make the minimum investment possible for the purposes of greenwashing.

Boston Business Journal article on my firm – It pays to be green

flagThe Boston Business Journal has been publishing quick focus pieces on specific Boston-area businesses and the efforts they are taking to remain resilient during the recession.  My firm was pleased to be spotlighted.  Below is the article that appears in the Friday, 1/9/09 edition of the newspaper (I am also including a link):

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Marketer: It pays to be green

Grossman Marketing Group plans to focus its sales pitch on companies looking to be — and save — green.

That is because most businesses do not believe that using environmentally friendly marketing products can actually be cheaper than traditional marketing materials, said Steve Grossman, president of Grossman Marketing.

“Most people still have a hard time getting around the fact that green products can be cost-comparable,” Grossman said. “We want to lead more aggressively the no-extra-cost factor.”

Overall, the 100-year old print and marketing-materials company hopes its green push will stave off the effects of the recession, as direct-mail spending has dropped off considerably during past downturns. Envelope and direct mail makes up about 40 percent of Grossman Marketing’s business and grew nearly 20 percent in 2007.

The company also plans to step up the consulting services offered by the business, providing sustainability and marketing advice to its clients at no charge.

“It strengthens the relationship with our customers. They see us as their partners to advance their sustainability initiatives, but also, especially in the short term, to reduce their cost basis,” Grossman said.

Growing the green marketing business is just one part of Grossman’s three-pronged strategy for this year. With its recent investment in Consolidated Marketing Solutions Inc. of Massachusetts, based in Wilmington, Grossman Marketing is stepping into the online branding and marketing business.

“They want to do business with like-minded companies,” Grossman said.

— Jackie Noblett

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Here’s a link to the article: http://boston.bizjournals.com/boston/stories/2009/01/12/story14.html

Green Marketing: Reducing the Impact on the Environment while Increasing the Impact on your Audience

Below is an article I recently submitted for publication to the Association of Fundraising Professional’s newsletter about green marketing for not-for-profits. Nevertheless, the lessons discussed are applicable to for-profit businesses as well.

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Nearly every day, when we open a newspaper or magazine or turn on the news, we see and hear something about the importance of being “green.” There are many reasons for this, most notably the acceptance of global warming as fact. Global warming has gone from a term used in the scientific community to a national issue on the minds of tens of millions of Americans. 2007 was the year when most citizens began to take notice and take action, and they are increasingly demanding that the places where they work, companies from which they buy products, and organizations to which they donate make significant and sustained efforts to address environmental issues. These efforts must cut across all facets of an organization, from energy conservation, to recycling initiatives, to waste and water use reduction.

One of the most active conversations that we constantly have with our clients in the not-for-profit world, particularly those in development and communications, is how they can show their donors, prospects, and constituents that they are acting in an environmentally-conscious way. In addition to implementing some of the operational business practices mentioned above, we highlight their collateral as a valuable tool in this effort. Quite often, their mailings and other marketing pieces are the principal vehicle through which they communicate with their key stakeholders and thus provide tremendous opportunities to connect in focused ways.

Each new project is an opportunity to deliver a values-laden message at a time when environmentally-sound practices are one of the hottest topics on the political, social and business landscapes. In fact, according to recent national polling data, the environment was a top-five issue with Americans, behind the economy, Iraq, and healthcare. For that reason, in addition to using marketing and fundraising projects simply as a means to discuss a specific topic (i.e. an event, annual appeal, etc), it is important to think bigger and bolder. Therefore, we make strategic recommendations on how to produce these pieces in environmentally-friendly ways, which strengthen the relationship between the organization and the donor. This is a critical part of the mission of fundraising professionals, and we are working closely with not-for-profit clients all over New England to make that goal a reality.

Research demonstrates the importance of the environment to prospective donors. According to a 2007 Gallup poll, 83% of respondents said that they believed the environmental record of an organization is an important factor when deciding to buy one of its products. According to an environmental survey published by Cone LLC, a cause branding firm headquartered in Boston, 93% of Americans “believe companies have a responsibility to help preserve the environment” while 91% of Americans said they “have a more positive image of a company when it is environmentally responsible.” There is no question that this data applies to not-for-profits as well.

Not only does incorporating sustainable business practices into your organization make good business sense, it is also the right thing to do. Manufacturing of all kinds, including the creation of collateral, requires large amounts of electricity, traditionally produced by fossil fuel-powered generators. The combustion of fossil fuels creates carbon dioxide and other greenhouse gases that contribute to global warming. Therefore, one of most effective ways to address the environment with your marketing communications is to produce your materials with renewable energy, specifically wind power. Any number of third-party reports highlight that wind power resonates very well with end consumers – who make up your respective donor bases.

Therefore, we made the strategic investment in early 2007 to power our envelope production facilities with 100% certified wind power, using Green-e certified renewable energy credits. We offered envelopes made with wind power at no extra cost, and the program took our industry by storm. Some of our initial customers included: American Israel Public Affairs Committee (AIPAC), Boston University, Common Cause, Federation of American Scientists, League of Conservation Voters, National Park Foundation, Partners Healthcare, Project Bread, Tufts University and WBUR. Over the past year, we have worked with approximately 75 clients to produce more than 120 million envelopes with wind power, which has saved more than 33,000 gallons of oil!

In addition to the wind-power envelope initiative, Grossman Marketing Group now offsets 100% of our energy use in all of our facilities, so can help our clients make all of their printed collateral with certified wind power, at no extra cost. In addition to renewable energy, we have come up with some very simple tips to “green” our clients’ collateral projects, always with the bottom line in mind.

We recommend that once clients make the decision to make their collateral more environmentally-friendly, they clearly articulate this to their constituents. We work with our clients to translate the environmental savings into very simple and easy-to-understand terms so your donors can fully grasp the positive contributions you are making to the environment. You should never hesitate to explain the work that you are doing – whether it is on the back of an envelope, or in a section of your annual report or newsletter. Clear communication and transparency are absolutely critical, as they will allow you to use your environmentally-conscious approach as a way to differentiate your organization from your competition and establish a competitive advantage.