Hilton Worldwide – cutting the green edge or imitating the competitors?
Assessment of Hilton Worldwide response to global warming.
36 percent of ‘major’ hotels around Bahamas are at risk from the sea rise. Bahamian tourism industry can expect an annual loss of between $869 million to $946 million due to sea level rise. By 2050 Fiji and Kiribati Islands might disappear from the maps. But not only raising see levels, surge in tropical storms or decrease in snowfall are concern of the leisure industry leaders, but also the environmentally conscious customers. How has Hilton Worldwide addressed all those issues?
Hilton’s current approach
Hilton Worldwide is one of the global leaders in the green space in the World. It was selected Forbes Top 50 Green Brand and Newsweek’s Top Green Firm in the World. The company is focusing on various environmental aspects of its operations: energy and water use, waste management and carbon emissions. A dedicated to environmental problems’ website serves as a major CSR promotion tool:
In carbon emissions Hilton focused mostly on energy use reduction and also leveraged renewable energy credits to decrease it CO2 footprint. The company is providing its customers with a tool that guides hotel customers on how to minimize their footprint during the stay. It also allows the customers to calculate the emissions caused by meetings and events. Customers are then offered an opportunity to acquire carbon credits to offset the negative impact. The credits could be spend, according to customer choice, on rainforest saving in emerging markets, such as Indonesia or wind-generating projects in China or India.
Hilton Worldwide is also a member of the Hotel Carbon Measurement Initiative, together with 23 leading leisure industry companies. This initiative sets out standards for calculation of the carbon footprint of hotels and seeks to help them reduce it. Finally, Hilton is investing in renewable sources of energy and establishing partnerships with suppliers, to collectively look for footprint reduction. In the greenhouse gases emission space, Hilton reduced carbon output by 20.9% since 2009, which equals to removal of 128,725 cars from the roads globally. Its general energy use dropped by 14.5% since 2009.
What are the competitors doing?
Similarly to Hilton, Intercontinental Group rolled out its online environmental tool, helping manage carbon, energy, water and waste across its 4700 hotels. Interestingly, upon initial reduction, Hayatt emission footprint has flattened recently. A recent study by Washington State University has proven that chain hotels do better job in the field of ecological solutions than their independent competitors. The chains more likely engage in activities such as: use of energy efficient light bulbs, training staff to turn off lights, heaters and air-conditioners, buying products in bulks to reduce packaging or using safer cleaners and chemicals.
Is that enough?
I personally think it is not. Although Hilton’s efforts, similar to those of other top players in the leisure industry, look good on a corporate website, to me they are not the kind of involvement I would expect from a company directly, almost physically threatened by the global warming.
I imagine the company, which owns numerous coastal resorts, to be more deeply engaged in support for construction of coastal protective infrastructure, such as for example seawalls or beach-protectors, as well as helping local communities of threatened regions in relocation efforts.
Going forward, I think that climate change will significantly impact Hilton’s business. And I do not only mean the fact that any Hilton coastal project would have to take into account the projected changes in the coastal zone, due to climate changes. The Cornell University Center for Hospitality Research have just designed a Hotel Sustainability Tool, which will allow comparisons of carbon footprint between hotels.
While the tool is yet simple, I hope that more developed version will increase competition among hotels, for the trophy of the greenest resort, as customers of the future will be even more environmentally concerned. And I do believe that Hilton could treat the emission reductions as an opportunity. For example, a recent study shown that green design of hotel buildings could cut 30-50% of energy costs per room, allowing savings as big as 6.75 USD per daily room rate. Maybe greenhouse gases emissions reduction pressure could also have “green” impact on hotel profits?
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Sources:
http://cr.hiltonworldwide.com/environments/
http://cr.hiltonworldwide.com/environments/#sthash.O38TZmF4.dpuf
http://www.tribune242.com/news/2012/sep/17/36-major-hotels-risk-sea-rise/
http://www.environmentalleader.com/2012/06/28/hyatt-sustainability-report-waste-intensity-cut-3/#ixzz4P3lOkHb9
http://www.environmentalleader.com/2011/10/26/hotel-chains-trump-independents-on-green-policy/#ixzz4P3ljHySa
Very interesting post! I had no idea how far Hilton’s commitment to sustainability went. While traveling I always viewed the typical “We-love-the-environment-so-please-don’t-ask-for-new-towels” cards with a great deal of skepticism. The self interest seems obvious. I’m sure cutting water bills and labor cost have something to do with it, but I had never considered how vulnerable the tourism industry is to the destruction of the ecosystems that people come to visit. Your statement that Hilton has reduced “carbon output by 20.9% since 2009 …. [and] general energy use [has] dropped by 14.5% since 2009” is particularly impressive given that Hilton has open closed to 1,000 new hotels during the same period. (1)
1. https://www.statista.com/statistics/247284/number-of-hilton-worldwide-hotels/
Thank you for sharing your insights into Hilton Worldwide. I tend to believe that more credit needs to be given to the hospitality industry in general (or, I guess, less fault should be assigned to the industry when it comes environmental issues). While sustainability and service are not necessarily mutually exclusive, it is important to note that service is generally given priority over the environment not because Hilton chooses, but because of the demand imposed by its customers. An important step the industry can take going forward is educating its customers–e.g., you do not need new sheets every day. Furthermore, the hospitality industry can also reduce its carbon footprint by examining human behavior. That is, we are generally satisfied with the default choice. By requiring that customers be explicit when it comes to obtaining new towels, new sheets, and bottled water (or else none of it would be provided), the demand for these tends to fall. Hilton shares some data pertaining to the operations I have just briefly described: http://www.hilton.com/en/hotels/content/NYCMLHH/media/pdf/NYCMLHH_WebGreen4.pdf.
I also hope that the hospitality industry will rise to the occasion and do its part to control climate change. This article: file:///C:/Users/Felisha/Downloads/Diptico_Sector_Hotelero_Web.pdf highlights specific ways hotels can reduce their carbon footprint now. I would be curious how many of these strategies Hilton Worldwide is employing. As an industry leader, my expectation would be that they are employing all of these strategies at each of its hotels.
I agree with your analysis that leaders in the hospitality space could be doing more to promote environmental sustainability. Partnerships with other companies may be a more cost-friendly approach for introducing technologies to reduce energy consumption. For the past year, Hilton has partnered with GE and Tesla to add electric vehicle charging stations to 100 hotels. While the potential guest pool that can use these charging stations is small, this sets the tone that Hilton is willing to invest in alternative energy technologies and less carbon-intensive transportation methods are available for guests.
Hilton Worldwide. “Hilton Sparks Major Expansion of Charging Stations for Electric Vehicles.” October 8, 2015, accessed on November 7, 2016. http://news.hiltonworldwide.com/index.cfm/news/hilton-sparks-major-expansion-of-charging-stations-for-electric-vehicles
Thanks for this article, Jakub! I had no idea that Hilton was so engaged into the sustainability initiative. Like NC, I have always thought that the “hang your towel” was a cost-saving initiative more than anything else. I’m quite impressed by what they’ve done so far but like you, I wonder if that’s enough. I agree with you not the competition point – that sustainability is no longer a differentiator, but a hygiene factor that you need to address. However, I’d take it one step further and ask how it might be impacted by their broader competitors of Air BnB – which arguably, could curb a lot of the wastefulness from the demand side!
Love this post. I don’t think hotel industry is very responsive to climate change as its impact has been very obvious to hotel/accommodation in general compared with food/agriculture industry. I do see many hotels started the initiative of encouraging customers not to change bed sheets during their stay. I am wondering to what degree that initiative has been implemented and what exact impact has that initiative brought to mitigate climate change issue.
Great post, always interesting to hear about how different companies are addressing the issue of climate change.
Out of curiosity do you know if Hilton’s approach to reducing their carbon footprint differs based on each hotels location? I have always found it interesting to see whether culture and geography impacts how aware people are of their effects to climate change and how much they are willing to cooperate. I personally think their global footprint is something that Hilton can leverage to amplify their effect on climate change as it enables them to educate their visitors which are from a wide variety of cultures and backgrounds, however, I realize some cultures are less receptive to the issue so I wonder what can be done about this.
Also is there some sort of overarching institution in charge of regulating the industry? I wonder to what effect a central body could help standardize practices across hotels to address the fact that the larger chains are better at dealing with the problem than the small independent hotels.
Jakub – Awesome post on laying out the challenges Hilton, the industry, and global warming challenges. Playing Hilton management for a second, I’m curious how collaborative is the hotel industry as a whole to minimize global emissions by sharing best practices and jointly create tools that everyone can use. Additionally, on the flip side, with global warming are there ironically any benefits to hotel and hospitality industry such that the warming of certain areas or rising waters that will extend vacation seasons for certain tourist areas.
Thanks again for the post!
Hilton’s reductions in emissions and energy use are impressive at face value, but I wonder if that large initial improvement was from low hanging fruit. For example, this large hotel chain, as an enormous consumer of resources, may have gone from unmitigated resource use to some level of awareness. If that was the case, then the change described above would have been from reducing wanton waste, which while important is a far cry from establishing a green industry standard. I’d be interested to see a multi-layered long-term plan that includes investments in energy efficient materials and equipment.
Thanks for the post, Jakub!
The topic is curious–it feels like although Hilton has found multiple prongs with which to attack the issue of their contribution to climate change, the firm could still do much more. For example, the study showing that electricity could be cut by 30-50% in new-construction, high-efficiency rooms illustrates that Hilton knows it is behind the (technological) times, yet has opted not to address this fact head-on. Naturally, costs of refitting nearly every Hilton room would be daunting. Nevertheless, I’d be curious to hear you view on how you feel that Hilton should weigh the ethical vs. the commercial considerations embedded in their approach to ESG.
Great read! I’ve always found hotels and their green efforts a bit disingenuous as they often come across as more of a cost savings opportunity than an opportunity to save the environment. In my opinion, Hilton should make more of an effort to conserve energy (eg more automatic lights, electricity powering off when guests leave their room, etc.) to really lower the footprint–we’ve seen these options globally, but there is still a ways to go in the US. I loved your thoughts re: what they should be doing on the coast and hope to see a change at some point in the near future.
I agree with earlier comments about how some standard customer-facing sustainability measures at hotels feel… well, standard. We expect hotels to offer these features nowadays. However, I did come across an interesting, more involved customer-facing sustainability that perhaps Hilton could take some ideas from. Check out Starwood Hotels’ “Make a Green Choice” program: http://www.starwoodhotels.com/corporate/about/citizenship/sustainability/programs.html?language=en_US
Customers opt into this program where they can pass on full housekeeping for up to 3 days. Customers are rewarded with extra loyalty points for each night and Food/Beverage credits.
Thanks for the post, I enjoyed your critical evaluation of Hilton’s initiatives. I must say I am in agreement with your thoughts that Hilton is only doing the bare minimum to showcase its initiatives to customer and shareholders. Fitting the framework of the Hotel Carbon Measurement Initiative (or any other similar initiative in different industries) must be only considered the first step. I believe Hilton should put together a much more thoughtful and forward looking strategy to approach its sustainability plan, if the company is serious about it.
You mentioned the design of new buildings, I am curious about your thoughts on current ones. What initiatives would you look at and what tools would you use to evaluate their business impact? Finally, do you think that Hilton or its competitors would be willing to take a financial hit to step up their sustainability plan if restrictions are not imposed by government? I would say no, I believe that governments hold the ultimate responsibility to put (thoughtful and harmonized) regulation in place. I am excited to discuss this topic further with you.