Your 2013 Green Strategy: Impress Owners, Guests and Associates
By Sharon Alton Founder & Principal, GAIA Consulting Group, LLC | February 24, 2013
We hear it everywhere: Go Green, it's good for the environment. Our intent is never to intentionally cause harm to the environment, but the reality is that improving our bottom line, and thus maximizing shareholder value, necessarily sits atop our priority list. Interestingly, there is a new revenue enhancement model beginning to permeate the hospitality industry. The program design aspires to drive more revenue through to the bottom line, via an environmental-centric delivery mechanism, which in turn can produce positive economic, cultural, and environmental outcomes. However, success in the operational implementation phase of this new model is absolutely critical. When accomplished, significant ownership and management goals are achieved, a positive public image can be developed and capitalized upon, and associates are provided with incentives to extend their careers with the company.
Simply put, an owner's primary goal is to grow their hotel assets' profit margin. However, to actually do it, one has to face the fact that a material amount of a hotel's operating expense consumption is not under management's direct control. In fact, it is associate and guest buy-in and their resultant behavior, which is the catalytic driver for operating a cost efficient, energy saving hotel. Such hotels attract more group meetings business, enjoy lower operating expenses, retain key associates longer, and consequently produce more hotel revenue and higher profit margins.
So how can a hotel owner/manager harness this intrinsic profit potential? Well, it begins with self-education, and in-turn, the development of programs that incentivize associates and guests to focus on the business case for sustainability. By designing programs that establish an atmosphere of aligned goals between the owner/manager, associates and guests, the group can collectively share in the efforts and rewards of reducing the hotel's operating expenses. Every party needs to understand exactly what they can do to help achieve this goal, and what they will earn in return for those efforts. Don't feel isolated and marooned if you aren't exactly sure how to advance, or even begin the process. Most owners/managers struggle with how to create and foster an environment that both teaches the initial behaviors, and follows up to incentivize their continuation, without detracting from the overall guest experience. For those who solve the puzzle, profit margin growth awaits.
The great news is that you don't have to reinvent the wheel because this has been successfully accomplished in select hotels throughout the world. With the right mix of strategy and incentive, management can develop a hotel sustainability program that blends a component of associate compensation with the behavioral modifications necessary to successfully transition the operational strategy, thus accelerating and buy-in from all departments. Hotels that have mapped out and stayed true to this new course have enjoyed quantifiable profit margin growth. Some hotel owners/managers believe that relatively simple behavioral changes sound too far-reaching, while others might believe they have all the controls already in place. However, the ultimate proof is in the final operating expense figures and the hotel's profit margin. Here's the reality, the trend in the industry is towards controlled consumption and a focus on enhancing the competitive posture of one's hotel through reduced operating expenses. Even if your hotel is LEED Certified, design alone won't achieve maximum results. And rest assured, more than one sustainably-designed hotel has blown through their forecast and advertised operating expense budget.
Hospitality and commercial real estate aren't the only industries grappling with how to educate and encourage end-users to maximize the potential efficiencies built into their product. The auto industry has seemingly embraced the business case for sustainability, but unfortunately, many fuel-efficient automobiles still fail their design and fall short of achieving true intrinsic operational advantages. In the end, it all comes back to the end-user controlling the energy consumption. In a hotel, your associates and guests hold the key to how hard the gas pedal is depressed from stop light to stop light.
In any industry, when ownership wants to grow the profit margin they focus on reducing fixed operational costs and growing revenue. Within a hotel, we need our associates and guests buy-in to achieve that goal.
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