Even the smallest start is a big one

Sustainable Hospitality Alliance calls on hoteliers to "get stuck in" at ITB

The sustainability goals are ambitious, and implementation will only succeed if we work together.
/ Photo: grant ritchie unsplash

Berlin (March 18, 2022). "We are a force for Good": With these words, Wolfgang M. Neumann, Chairman of the Sustainable Hospitality Alliance (SHA), appealed to all colleagues in the hotel industry and tourism to get involved in sustainability at the ITB last week. A circle of CEOs - among them Sébastien Bazin of Accor - encouraged the industry, as is seldom the case, to start even with small things. Every step is valuable and sets a chain in motion.

Neumann quoted from the "Global Risks Report" of the World Economic Forum 2022 that a failed climate change poses the greatest risk to humanity in the next ten years. Therefore, everyone is challenged, individuals as well as companies. Even the smallest step is a valuable start, the SHA Chairman motivated those who are still hesitant. "Sustainability creates values", the former hotelier and CEO of large hotel groups himself is firmly convinced: The implementation of ESG goals would create 300 million new jobs and 12 trillion US dollars in market opportunities. "However, it is not possible without partnerships across all levels," he made clear. Thus, a sustainable hotel commitment extends into communities and destinations....

In a 45-minute discussion titled "How to Walk the Talk" at the digital ITB a fortnight ago, CEOs acknowledged that they can only take small steps themselves - but that these are very valuable.

The key is the employees

Europe's largest hotel chain wants to reduce its CO2 emissions by 46% by 2030, Accor CEO Sébastien Bazin picked up the thread and immediately formulated the big, overarching goal. For him, the only way to carry on the sustainability spirit in the company is through methodology. It starts with the realisation that a Pullman in Paris has little in common with a Pulman in Sri Lanka when it comes to emissions. "That's why I hand over the keys to it to the general manager and then sit down with the owners, because we're talking about costs. But stay on top of it yourself, don't get in and out of it, but make sure your staff are proud of having saved a quarter of the water they use."

These four stages lead to the goal: companies start with individual activities, develop targeted environmental actions from them, achieve the goal of zero emissions and ultimately have a positive impact on the planet. / Graphic: SHA

Accor opens a new hotel almost every day - which doesn't make it any easier to implement sustainability at the same level. Since the COP26 conference in Glasgow, Bazin is clear: "We have to move away from compensation and towards positive contribution!" 100 sustainable hotels could yield more profit than 250 traditional ones... "I have no problem sacrificing some pipeline projects to preserve the values of the company. Otherwise, I would be lying to myself. In the last 15 years, the mindset has simply changed."

This realisation is catching on, and with extreme momentum, too, Bazin himself has found: Four years ago, his talks with investors from the Middle East were still disappointing; now they are among the leaders in sustainability for him.

Investors can be convinced

If the owner does not believe in sustainability, there will be no sustainable hotels in the future. Hotel operators are learning this lesson every day. Nakul Anand, CEO of the Indian luxury hotel group ITC Hotels, has been confronted with sustainability for a long time through the parent company ITC: it is one of the few mega companies (present in FMCG, hotels, packaging, cardboard, special paper as well as agribusiness) that scores positively in the areas of carbon, water and waste recycling. He convinces his hotel investors with certifications. "These are important," he said, but talking to owners is "hard work"! In the meantime, ITC-Hotels has managed to recycle 99% of its waste, get more than half of its energy from renewable sources and probably reach its emissions targets before 2030.

Marloes Knippenberg, CEO of Dubai-based Kerten Hospitality, a creative operator of mixed-use boutique brands, was also convinced that sustainable success only comes from the personal conviction of the company's top management and, above all, that the ESG approach is exactly the opposite of previous thinking: you don't go global and sweeping, but small and local. She likes the idea of thinking about ways to "Net Positive" rather than ways that end at "Net Zero".

"I would like to see the circular economy become mandatory everywhere in the world. That would be a real game changer," urges Dirk Bakker. Portugal is already - mandatorily - demonstrating it. The CEO of the consulting company Colliers Netherlands & Head of Hotels for EMEA emphasises: Owners as well as operators are part of the value chain. "It's about mentality," he agrees. "If we don't live ESG and change, it won't work."

The "local touch" determines everything

For Bazin, net positive means: what are we doing for the locals? For them, living and working conditions must improve, he says, referring to the "S" for Social in ESG. After all, tourism is one of the largest employers in the world and, due to the diversity of its jobs, offers the opportunity to lift people out of poverty like hardly any other industry.
But at the same time he warns his colleagues not to deceive the guests. "They see our websites and they capture our reality with their smartphones, even the last plastic water bottle". For Dirk Bakker, this is a huge opportunity: "Hotel chains have enormous potential to help educate the world through their guests". Everyone in this round agreed: we cannot change the world, but we can influence change.

Collage: SHA

Collaborating in the micro-cosmos

Wolfgang Neumann experiences such discussions in the Sustainable Hospitality Alliance (SHA), too. Meanwhile, 16 hotel groups with 30,000 hotels and 4.5 million rooms belong to the cooperation. Kerten Hospitality from the Emirates and Arabella Hospitality from Munich have recently joined. In autumn 2021, SHA introduced its initiative "Pathway to Net Positive Hospitality" (as reported, see link) and at the same time started to bring on board partners from real estate, consulting and sustainability-focused partner companies. EY, Colliers International and Drees & Sommer were among the first members. Union Investment and the market research company BVA-BDRC have since joined. This colourful circle has a stimulating effect: It already reflects - together with the hotel chains as SHA members - a part of the value chain, which must include operators, investors, asset owners, developers as well as other real estate experts.

Pro-active or reactive?

In an interview with hospitalityInside.com, Wolfgang Neumann as Chairman of the SHA summarises from the meetings of these different parties: Everyone agrees that in times of crisis like these (Corona, Ukraine), originally ambitious plans have to be adjusted - slowed down. "But everything speaks for sustainability and success - companies just have to decide whether they want to be proactive or reactive."

But that is never a problem if the UN's sustainability goals remain part of the company's values and culture, he said. "In the meantime, many things have been proven or have become very plausible," Neumann sums up with a view to various stakeholders and target groups: so-called "purpose-driven" companies will be more successful in the long run; motivated employees will also become a success factor because they absorb their personal energy from the momentum; consumers/guests contribute to the turnaround through their demand behaviour; corporate clients force changes through their RFPs and the value increase of "green" real estate can already be tracked in Excel sheets.

Wolfgang Neumann: "The question is no longer whether I can afford to act sustainably - but whether I can afford to act unsustainably". / Maria Puetz-Willems

Note: The entire ITB discussion "How to Walk the Talk" is recorded on YouTube.

CONTINUE DISCUSSION AT THE 5TH HOSPITALITYINSIDE THINK TANK (HITT)
ON 27/28 June 2022 in Berlin
under the title "Embrace ESG for people, planet and prosperity".

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