What Socioeconomic and Environmental Aspects will Shape Hotel Plans in 2023?

As an industry, the challenge of transforming the sector is to look for solutions that address global environmental and social issues in the short and medium term to ensure long-term value creation.

In the context of COP27, UNEP’s Emissions Gap Report 2022 found that policies currently in place point to a 2.8°C temperature rise by the end of the century, a number that could lead to catastrophic consequences for the planet. Full implementation of the latest pledges to reduce greenhouse gasses could slow this increase to 1.8-2.1°C, but the report does not find a credible pathway for the 1.5°C targets.

From December 7th to 19th, the UN Biodiversity Conference COP15 is taking place in Montreal, Canada. World leaders will decide this week on the proposed Post-2020 Global Biodiversity Framework. The Convention on Biological Diversity will be the biggest biodiversity conference in a decade. World leaders are expected to agree on a Global Biodiversity Framework. The post-2020 global biodiversity framework will be presented for consideration. The framework has 21 action-oriented targets for urgent action over the decade to 2030. The post-2020 global biodiversity framework will be presented for consideration. The framework has 21 action-oriented targets for urgent action over the decade to 2030.

Healthy biodiversity means healthy people, food, and water security.

Various issues affecting the hospitality industry include inflation, war, and geopolitics. Science has proven that climate-related risks and biodiversity loss threaten businesses and society. Hotels operate in a volatile, uncertain, complex, and ambiguous environment. As a result, owners, operators, and leadership teams face a constantly changing market. The rise in energy and food supply costs, water stress,

and chronic staff shortages require industry action and evaluation as they become more acute.

Hotels that lead the sustainability and regeneration conversation in 2023 will consider risks and opportunities assessments and focus on tangible impacts.

The current global situation can be described as a polycrisis with multiple, long-term crises simultaneously culminating into a moment of systemic risk, with each one complicating the solution of the others. The consequences of these crises can be assessed more thoroughly, by looking through three different lenses: an ecological, an economic, and a social/political lens. – Triodos Investment Manager 2023 Outlook.

What would this transition look like in the hotel sector?

Food & Beverage
The food source for F&B outlets in accommodations, such as restaurants, bars, and buffets, is changing rapidly. The need to support regenerative agriculture, fair and just supply chain and sourcing practices, and guests’ healthy diets are driving shifts in behaviors in kitchen operations, ingredients, and suppliers. Some examples are sourcing consciously, promoting plant-based, permaculture, and seasonal ingredients, and labeling menus with CO2 emissions, among others.

Hotel Circularity in FF&E and OS&E
The circularity of operational suppliers and building furniture also plays a crucial role in the hotel circularity plan. There are opportunities for renting, using second-hand or giving a second life to other properties’ furniture and fixtures, or simply donating them to keep the cycle closed. In Europe, further regulation is being developed in this direction, for instance, the packaging requirements EU Regulation on reducing packaging waste and making all packaging recyclable by 2030.

Energy Transition
Energy bills are among the most expensive utilities in Europe. Ultimately, the goal is to implement a hotel decarbonization strategy and divest from fossil fuels, investing in renewable energy that fits with the local energy infrastructure. Furthermore, more city-center hotels are using roofs and other asset areas to grow biodiversity and support carbon sequestration projects.
This is an opportunity for the sector to support this transition, support thriving destinations, and explore community-led and based opportunities outside the hotel.

Wellbeing
Brands, operators, and investors have an opportunity to improve wellbeing beyond architecture and design, by looking at how to improve hotel operations and guests’ and employees’ experience. Guests have less materialistic-driven satisfaction and have booking tendencies favorable to healthy and wellbeing-focused inspirational brands.

Having procedures and SOP can enable a space where everyone feels safe and it facilitates people-centric innovation. To do so, it is essential to create an environment where teams can thrive regardless of adversity.

The impact on Asset Revenue and ADR
– Upscale and lifestyle brand guests’ willingness to pay more (WTM) for conscious stays.
– Sustainability is becoming a commodity in hotels, and it is expected by travelers.
– The cost of inaction (COI) should be calculated and how it will impact the financial materiality
– Expenses for non-compliant, brown assets and risk of losing the license to operate.
– Potentially having stranded assets due to lack of retrofitting and energy consumption

Digitalize the Asset
When brands implement technology into their portfolios, they need to carefully select the software or the technology to be used. When choosing metrics, measurement areas, and monitoring tools, choosing data collection points is not as crucial as determining the appropriate metrics.

The use of technology combined with a continuous improvement approach can support sustainability integration. The most significant thing about hotel technology implementation is context.
1. Automate processes
2. Back office digitalization
3. Use technology to organize unplanned tasks and link them to climate-
related scenarios and issues
4. Team education through digitized training
5. Digitized procedures transform hotel practices

Implementing cloud PMS, building technology systems, facility management APPs, measuring and reporting tools, and in-house communication tools will help to improve the implementation, communication, and transparency of organizational processes.

Understanding the difference between KPIs and SDPIs
KPIs are used to measure a hotel’s operational performance, and SSDPIs are used to assess a hotel’s sustainable development performance. However, companies have to account not only for how they perform in terms of economic efficiency and sound governance but also concerning environmental, social, and human rights impacts.

Current indicators, methodologies, and reporting models still fail to provide an adequate basis for assessing socio-economic, governance, and environmentally sustainable development impacts. Several blind spots that render sustainability reporting ineffective need to be addressed to create meaningful assessments. Reporting overload and an excessive number of indicators are also problematic. -United Nations Research Institute for Social Development (UNRISD)

Technology implementation without the right mindset, culture, and leadership education is ineffective in achieving businesses’ sustainability goals. Framing the strategy in the right direction, data collection, and understanding the hotel’s context is imperative to efficient asset management and technology implementation.

Maribel Esparcia Pérez
ESG Sustainability Expert
ABC Sustainable Luxury Hospitality
Proudly Ambassador Global Wellness Institute
Happiest Places to Work – Awards