The team at PKF hotelexperts have published a paper “The Impact of Sustainable Practices on the Financial Statement of a Hotel”, in which the question of the economic profitability of adopting sustainable practices is discussed, together with other factors which may currently discourage hotel owners from doing so.

Adam Maclennan, Managing Director and Head of UK & Ireland at PKF hotelexperts spoke at our Hospitality & Leisure Roundtable Lunch in which this topic was discussed amongst our clients in this sector. Five key takeaways from this event were:

  1. The global movement towards action on climate change has gained momentum through the voices of Greta Thunberg and Sir David Attenborough stating the problem: the world’s temperature rise since the Industrial Revolution will hit the 1.5°C mark—an eventuality that scientists warn will expose some 350 million additional people to drought and push roughly 120 million people into extreme poverty by 2030. The UK Environment Bill has been published, which will set up an independent watchdog, “The Office for Environmental Protection”, and introduce laws regarding the use of single use plastics, air pollution and carbon emissions.
  2. The hospitality industry has had a significant impact on the environment due to its rate of water consumption as well as hotels’ use of consumable goods and energy. Hotel operators and owners are under increasing pressure to adopt sustainable practices, from their hotel employees, guest requirements through to investors with an ESG investment strategy. As PKF’s report states: “Customer preferences are shifting in line with the overall concern for climate change.”
  3. The adoption of sustainable operating practices in hotels can actually lead to efficiencies and cost savings. Self check-in systems, key cards and property management systems can allow hotels to become paperless, whilst exchanging single portion shampoo bottles with refillable bottles, as recently adopted by IHG and Marriott, can save costs and resources. Replacing single use plastic cups and crockery with reusable or bio-degradable alternatives is an important step toward sustainability.
  4. Implementing sustainability into F&B revenue can create more revenue, through the adoption of new concepts, creating spaces that can be used by guests during the day, and by sourcing local fresh produce, and consequently attracting eco-conscious consumers who are willing to pay a premium for sustainable products. Dealing with food waste is critical, with one in six hotel meals served being thrown away. Hotels that introduce food waste reduction strategies make costs savings, and Apps such as “Too Good To Go” and “Karma” enable retailers to sell surplus food at a discount. The Savoy Hotel was the first hotel to generate energy from its food waste in 2012.
  5. Hoteliers are increasingly using water and energy saving measures in order to combat rising utility costs together with the imposition of tariffs to reduce carbon emissions. Hotel refurbishments are being used as an opportunity to install energy efficient systems. Water waste can be reduced through tap control systems, but also through encouraging guests to use less water, such as the “Stop the Water Whilst Using Me!” company and its campaign.

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