Your Garden View Just Became an Ocean View: Marriott and Climate Change
Excuse my tactless levity, but some hotels’ longevity, will quickly turn to brevity, as oceans creep up steadily.
The title’s not just a wisecrack – I was trying to get a rise out of you, but be sure that the tourism industry is looking for ways to do just the opposite to the world’s sea levels. Hospitality will be drastically affected in coming years by environmental threats; with rising sea levels’ inevitable effects on coastal tourism, the downward “sloping” trend of good ski spots due to global warming, rapid demand fluctuation in response to extreme weather events, and temperature changes driving tourists away from the equator and closer to the poles, Marriott is looking for ways to do some housekeeping for the global environment. [3] [4]
Marriott International, Inc. is a global leading lodging company with more than 5,700 properties in over 110 countries… So yeah, they’re kind of a big deal. The aforementioned climate change factors are already very real challenges for Marriott’s business; in their most recent 10K, Marriott details how increases in prevalence of destructive weather events, such as Hurricane Sandy in the Northeastern United States and the tsunami and earthquake in Japan, can cause declines in leisure travel and reduce demand for lodging. However, disaster events such as these are just the tip of the (melting) iceberg when it comes to Marriott’s environmental concerns. With sea levels expected to rise by 2 meters by 2100, Marriott’s coastal properties are in an extremely vulnerable position. Global increases in temperature present an even more impactful challenge to Marriott’s business model; as the thermometer’s mercury level rises, so will the uncertainty of tourists’ travel choices, and pro forma demand forecasts are especially important when your product is a building, since they’re kind of tough to move. [2] [4] [6]
I guess they could take a page out of Benihana’s menu, and move their properties board by board to the new hot spots. They’d win Starwood points in my book for creativeness. But I’m going to pull the andon cord on that strategy until I can get some HBS students to simulate it. [no references required nor desired]
The good news is, Marriott’s not throwing up the Do Not Disturb sign and ignoring this scientific wake-up call. They believe they’ve found the room key to chipping away at their portion of this global problem through several measures, including reducing energy and water consumption per occupied room by 20% by 2020, educating guests on how to conserve and preserve during their stays, installing electric vehicle chargers at many of their properties, and building greener hotels. Marriott actually piloted the world’s first LEED Volume Program, which essentially provides developer partners with a pre-approved LEED-certified hotel prototype. This makes it easy for their partners to go green, and quickly put their financials back in the black, so they don’t need to feel blue, and, well, that makes me proud to be Marriott Gold. Just kidding. I’m Platinum. 50 Marriott properties are currently LEED-certified (the most in the industry), with dozens more in the pipeline. [2] [3] [7]
However, I do have some… sigh… reservations about the extent of Marriott’s efforts to reduce energy consumption. Marriott expects to increase their room count by 8% in 2016. Assuming the same number of rooms per property, that means 450+ new properties in 2016. As far as LEED-certified new properties go, “dozens” won’t be enough. Even if you’re Tobias Fünke from Arrested Development. [2]
And just because they never upgrade my room doesn’t mean they shouldn’t work more quickly to upgrade their existing fleet to be LEED-certified; less than 1% of their existing properties have the certification, and LEED renovations are a thing, so if you’re renovating anyway, why not be a good LEEDer? [2] [8]
To their credit, though, Marriott is ahead of the bell(man) curve on environmental practices when it comes to the hospitality industry. I’m excited to see how their sustainability practices develop in the coming years.
Thanks for reading. This is Mike Morgan, checking out.
[651 very silly words]
[1] Marriott Website – Properties
https://www.marriott.com/hotel-search/marriott-hotels-resorts-and-suites.hotels/
[2] Marriott 10K Annual Filing
http://investor.shareholder.com/MAR/secfiling.cfm?filingID=1628280-16-11346&CIK=1048286
[3] Marriott Corporate Responsibility Site
http://www.marriott.com/corporate-social-responsibility/corporate-environmental-responsibility.mi
[4] UN Intergovernmental Panel on Climate Change – 2014 Report
http://ipcc-wg2.gov/AR5/images/uploads/WGIIAR5-Chap10_FGDall.pdf
[5] Marriott Fact Book
[6] Marriott’s Wikipedia Page
https://en.wikipedia.org/wiki/Marriott_International
[7] Tourism and the Implications of Climate Change: Issues and Actions
[8] LEED Facility maintenance and renovation policy
http://www.usgbc.org/credits/existing-buildings-schools-existing-buildings-retail-existing-buildings-hospitality-exist-23
Mike, big fan of your blog posts. Been reading them for years.
I couldn’t have made it this far without loyal readers like you – you da real MVP.
Entertaining read Mike. Thanks for the insight. Two things popped into my mind as I read this, do you know if Marriott is changing any of its standards towards LEED certification as it expands. Because from my recollection, I believe much of that room growth is outside of North America and in emerging markets where standards may not be as stringent. Have they maintained their commitment to these standards even in emerging markets? Second, do you think customers would care more if Marriott made some of these goals towards sustainability a core part of their strategy. If customers do and they book more rooms at Marriott (vote with their dollars) it could speed up the pace of Marriott (and other hotel companies) efforts.
Very fun read, Mike. Similar to you, I’m not very convinced that Marriott is committed to reducing energy consumption. It’s very disappointing that while Marriott is planning to grow its properties by 8% next year, it seems to be content with only 1% of its properties being LEED certified. New construction especially seems like a great opportunity to double down on LEED certified buildings. Additionally as a frequent Marriott customer, I have noticed the product choice and design details rarely point to a company that cares about environmental sustainability (i.e. they tend to not have key card light switces or water efficient shower heads). I hope that as maintenance and replacement needs arise, management will take into consideration more environmentally friendly options.
Very entertaining blog post – thank you.
The relevance of this topic is reflected in the many blog posts by our classmates that talk about how ski resorts are going to be impacted by climate change due to a lack of snow in the winter and the need to artificially generate it. You also mention coastal tourism will be affected by rising water levels, likely due to the melt water from glaciers. I agree with you that these changes will likely have a large impact on the hospitality industry in the long term, but I think the consequences are not felt drastically enough yet for hotels like the Marriott chain to start caring sufficiently to put in place more environmental efforts.
I am very interested in what motivates consumers and companies to care about the climate. In the case of corporations it is likely foremost a profit motive, but I think our low levels of intergenerational altruism also play a role in creating inaction. Humans have always shown a tendency to discount the utility (or living standard) of future generations at a higher discount rate than their own thereby placing less importance on how our actions are affecting the future of our planet. Therefore, I think Marriott should take a much more long term view here. Simple policies such as reducing water usage by asking customers to indicate when they want towels or linen changed, decreasing food wastage through food banks or investing in local tourism can have an amplified impact simply because of how many customers can be reached and educated.
First of all – lovely writing style 🙂
One of the most interesting topics about climate change is indeed how it will affect tourism.
Thank you for bringing the concerns regarding the extent of the efforts of the Marriott sustainability program. This case is a very classical “Chief Sustainability Officer” vs “Chief Synergies Officer” distinction. I feel that if Marriott cared less about reducing their operating expenditures through energy savings and creating more efficient and less costly suppliers, they would look into building more “sustainable” and locally sourced buildings and zero emission operations.