The role of energy consumption in Hotel Operations

Energy consumption represents between 3 and 6 percent of hotel operating costs and is responsible of 60 percent of its CO2 emissions. It has increased from 25-30 percent over the last decade, and is forecasted to continue growing due to more demanding standards and the development of electronic equipment. It may vary with the influence of various factors including building characteristics, hotel features, location and operations, however, the main hotel’s energy end-user is temperature regulation (including room heating, hot water and air conditioning), which represents 69 percent of hotel’s energy consumption (Beske et al, 2014). Various measures can be taken within hotels to reduce their energy consumption, some involving important technical costs, which is a crucial parameter when putting in place a sustainable plan, whereas others only need human care. The efficiency of these measures greatly depends on the collaboration and implication of all stakeholders. Among stakeholders, hotel chains are in the best position to promote and implement eco-friendly policies (Ricaurte, 2011). Indeed, due to their size, strength and international network, they are highly influential in setting up trends and best practices and dispose of a range of operational, communication, training, monitoring, certification and provide tools to do so (Sarkis et al, 2011). An efficient tool is operating agreement, which constrains the hotels to respect a list of technical, architectural, operational, requirements to enter a brand (Singh and Power, 2009). The purpose of this paper is to demonstrate how hotel chains can use hotel operating agreements to regulate hotels energy consumption. Approach: What is energy consumption in hotels? Why hotel chains are in a favourable position to develop sustainability? Management agreements versus brand standards: what are the best tools to increase sustainability in hotels? In order to answer to these questions, the work was organised into two parts: a desk study, to find researches, reports and statistics already done on this topic. And an investigation directly towards hotel chains through a questionnaire, in order to ask them about the importance of sustainability issues in their firms, the actions they already put in place and the ones that they could do. For the desk study, the sources used were mainly consulting firms and international organisations reports, hotel chain brochures and press releases and academic books on this field. Even if this subject is currently a hot topic, the available literature is still limited and environmental issues are deal with in a more general way in the tourism industry and not specifically for the hospitality industry. This is mainly due to the diversity of this industry and the various specificities of the properties: each hotel is unique and its environmental impact in terms of energy will depend on lots of factors, including its location, architecture, size, category… It is therefore complicated to define and model a base case or delimit ranges of acceptable and not acceptable energy consumption strategies. Regarding the investigation, it was based on an interview of 40 of the largest international hotel brands, to whom a questionnaire with a series of questions related to their eco-friendly policy was sent. Once returned, their answer was analysed and compiled to produce recapitulating graphs to underline the associated findings. Findings: The combined results of the desk study and investigation shown that hotel chains are increasingly concerned about sustainability issues, both for their image and ethic as well as for economic reasons, as reducing their energy consumption is decreasing their energy bill. However, they still face difficulties to implement eco-friendly policies as they need to involve all the stakeholders, including investors, employees and clients, giving a crucial rule to training and communication to insure the success of these policies. As suspected, management agreements and brand standards appeared to be the main tools at the hotel chains disposal to clearly and efficiently set up sustainable policies, as these documents serve as guiding manuals to implement processes. Their propose are different, which make them complementary: management agreements define the legal square/the form whereas brand standards define the operational side/the content. Based on these findings, detailed recommendations on how to include sustainable policies within these documents were made in order to define what actions can be presented in each document and how, as they will not be mentioned in the same way. Sanctions and obligations of the parties were also underlined, as they are the basis of the partnership between a hotel and a chain. Contribution: As practical recommendations, they can be used in an operational way by hotels, hotel chains and legal consultants to help them in the formulation and redaction of management agreements and brand standards, as they can be used as a methodological guide. Regarding the contribution of this paper to the theory, it gives a new way of seeing sustainability in the hospitality industry, as it directly puts the responsibility on the hotel chains. In that sense, the approach is rather new as there are no researches on the subject, the main areas of analysis being concentrated on the property.