How sustainable can a hotel chain become? IHG Hotels & Resorts is trying to find out by launching its Low Carbon Pioneers program, aimed at encouraging wider adoption of carbon reduction practices across the hotel chain. I asked CEO Elie Maalouf about sustainability at IHG and what the company hopes to achieve.
What does sustainability mean to IHG Hotels & Resorts? And what does it mean to your guests?
Travel is a fundamental part of people’s everyday lives. People want to explore, connect, and experience new things. And that’s always going to be the case.
Our thousands of hotels around the world are there to meet those needs, but like all organizations, we have to make sure that as we operate and grow, we do so in a responsible way that works for our hotel owners and our guests. That’s something we know they appreciate, especially if they can keep that same quality of service they are used to.
What's the idea behind creating the Low Carbon Pioneers program?
We have a wide-ranging business plan that includes an ambition to reduce emissions from the energy used in our hotels. We have important initiatives already in place, including multiple energy conservation measures for our hotels, but it is a long and complex path that requires close collaboration between businesses and governments.
Why so long and complex?
Because we’re mostly a franchised business, we need to work with our hotel owners and help prove the business case for decarbonization. That’s what our Low Carbon Pioneers program will help us do – testing, learning and sharing findings on sustainable initiatives, bringing more pioneer hotels into the program and encouraging the wider adoption of carbon reduction practices.
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What's driving this push for sustainability?
We know that our corporate clients are looking to reduce their carbon footprint, so these hotels will be attractive to those guests looking to meet their own sustainability commitments. But there are also longer-term benefits to owners of having energy efficient, lower operational carbon hotels, such as greater alignment with environmental regulatory changes and better access to green finance for new projects. We believe these benefits should collectively lead to stronger property valuations in the future.
At the moment, you have just three properties participating in the program — Holiday Inn Express Madrid Airport and Iberostar Waves Cristina, both in Spain, and Kimpton BEM Budapest. How does a property become a pioneer?
Hotels need to be energy efficient, backed by renewable energy and have no fossil fuels combusted on-site except for backup generators that represent less than five percent of the hotel’s total annual energy consumption. The owners who join us are contributing to the sustainable future of not just IHG, but the hospitality industry as a whole.
What are the current barriers to making your hotels more sustainable?
The main barrier for our hotel owners is cost. For example, in the Americas, the cost of electricity is currently three to four times higher than the cost of natural gas. As a result, while heat pumps are three times more efficient than boilers, you don’t always get a cost saving from switching to them. A higher capital cost and higher operational cost makes the switch a hard sell to hotel owners.
So what can you do?
It’s more cost-effective to include these carbon reduction practices as part of the build process, but it still requires a significant financial commitment. We want to show owners how they can benefit from making these investments and prove the business case, which is part of what we’re doing with the Low Carbon Pioneers program.
Are you getting any help from local governments?
Yes, we're committed to working with governments that can support the industry by providing greater access to renewable energy for hotels, incentives for owners and a reduction in the cost of carbon reduction technologies that help speed up the move to a greener future.
How does Low Carbon Pioneers compare to other certifications in the industry? What do you think sets it apart?
We’re proud that this program is the first community of its kind in the industry. It's setting a new sustainability benchmark for hotels. While there are third-party green certification programs out there, this is the first time anyone has combined these energy efficiency standards with also having no fossil fuels on site and ensuring the hotel is backed by renewable energy.
What's the long-term goal for the program?
We launched the program with three hotels in Europe, where there is arguably more demand and infrastructure around sustainability. But we want to grow in all our regions and gather experience on sustainability solutions that we can refine and encourage more hotels to adopt.
Where do you see the growth?
We see our Europe, Middle East, Africa and Asia region as the primary area for growth in the short-term. In the Americas we’re focusing on new build hotels, so it will take longer for those properties to get up and running, but we’re already having conversations with owners.
Not all our markets have access to renewable power infrastructure yet, so we’ve also developed a ‘low-carbon ready’ group of hotels. When it is possible in those places to fully back all energy with renewables, those properties will also become Low Carbon Pioneers.
For now, it’s all about our owners. Talking to them, getting their thoughts and opinions, and explaining the benefits of making their businesses more sustainable, as well as working with governments and industry bodies to secure the additional support we need.
As an IHG guest, why should I care if my hotel is Low Carbon?
We know both leisure and business guests are seeking more sustainable options. People are becoming more conscious of their choices and impact on the world, so as part of the program we have updated our booking channels to market hotels as low carbon, low carbon ready or green certified.
We’re also trying to make it as easy as possible for guests to make sustainable choices as they travel, whether that’s actively, by choosing a low-carbon or green-certified hotel — both of which can be seen on our app — or from some of the solutions they see when staying with us. It’s about giving our guests the same great stay they expect from us, while operating and growing responsibly, so we can all keep traveling for many years to come.
As I said, it’s a long and complex path, but our Low Carbon Pioneers is another important way in which we can test, learn and share sustainability solutions across our wider estate. We want to support all our hotel owners to reduce their carbon footprint, whether that’s through big steps like this program or through smaller incremental changes.
