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Asia Pacific
Worlds Biggest Hotelier talks Exclusively to Vision
Friday, 05 Apr, 2010
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David Jerome, IHG’s Senior Vice President of CSR talks about the hotelier’s Green Engage and hopes for the future
Valere Tjolle: What’s your view of the current position of sustainable tourism on the hospitality industry’s ‘To Do’ list?
David Jerome: At times there seems to be a tension between tourism and the environment, but this tension creates a space for innovation. Our approach is to develop better ways to design, build and run our hotels. We don’t believe in just offsetting carbon: it’s about hotel innovation that lessens our negative impacts, without impacting the guests’ hotel experience. Corporate responsibility and sustainable tourism are at the heart of our business strategy.
VT: What do you think are the major developments in the industry generally in the past year?
DJ: Tourism faced a number of significant challenges this year. The economic crisis impacted the whole industry but we believe it’s important to keep focused and keep investing. Holiday Inn, our largest brand, is undergoing the biggest relaunch in the hospitality industry with a £600 million investment across more than 3,300 hotels and 430,000 rooms worldwide. We’ve already relaunched more than 2,000 Holiday Inn hotels across the world and we are committed to completing the programme by the end of 2010. Relaunched hotels are already reaping the benefits with RevPAR outperformance and improved levels of guest satisfaction. We’ve also focused on maintaining a healthy pipeline of new hotels and throughout 2009 we’ve continued to open one new hotel a day around the world. In the UK, our major achievements this year include the signing of two new Hotel Indigo properties in Liverpool and Glasgow and the signing of a second InterContinental hotel in London.
VT: As far as IHG is concerned, what particular sustainable developments are you most proud of; are most effective?
DJ: Innovation is central to our approach. As an organisation, we’ve made sustainability a core element of our business which means changing the way we do things to make a lasting impact. In 2009 we launched Green Engage, an online tool which helps our hotels manage their output levels and reduce energy consumption. Hotels can use Green Engage to measure their water, waste and carbon emissions to give us a common framework for comparison between hotels in the future. The system has already been effective in helping us reduce our environmental impact: our owned and managed hotels met their target of reducing energy by up to 10% in 2009. Over 900 hotels have signed up for Green Engage to date and we anticipate the scheme will save an average hotel 15 to 25% in energy use.
VT: Are you in a position to understand each of your hotel’s local development footprints? (how they impact, positively and negatively with local communities)
DJ: Most of our estate is franchised, therefore we created Green Engage to allow hotels to find out and manage their impact locally. The tool can be used to provide information on how to perform better environmentally, save money and support local communities – both through employment opportunities and buying from local suppliers.
In many cases the lack of a skilled workforce is a barrier for developing nations to tap into the economic benefits that travel and tourism has to offer. Developing local talent is necessary to allow countries to benefit from tourism investment. For example, in China we are the largest international hotel operator and have found it difficult to attract and retain talented employees in this region. So, we launched the IHG Academy in Shanghai in 2006 – a public/private partnership that provides hospitality job training in our local communities. We now have 25 partners located in 11 cities throughout China and an academy due to open in Manila in the Philippines in 2010.
VT: What initiatives have you in place that will assist the positive effects and reduce the negative ones?
DJ: As well as Green Engage, which I mentioned earlier, we worked at enhancing our Innovation Hotel his year so that our stakeholders can continue to be part of developing more responsible hotels of the future.
As well as innovating, we have been working on collaborations with industry stakeholders, academics and government bodies. For example, we signed the UN Global Compact and created a unique partnership with Oxford University Department of Plants and Sciences to accelerate vital research into conservation. We have pledged up to US$1million over a five-year period to help Oxford increase its research capability in the mapping of biodiversity and how it is impacted by climate change and to help inform our future hotel design and operations.
We are using our Priority Club Rewards (PCR) to part fund the donation by asking members to switch from paper to online statements. More than 330,000 members have now made the switch. With more than 48 million PCR members worldwide, this simple change will have a huge financial and environmental benefit.
VT: What is IHG’s position about green/sustainable certification? What do you feel about the local, global issues with reference to green/sustainable certification?
DJ: Many of our hotels have environmental certifications, however, as a global company, we’ve seen the need to create our own unified sustainability standard specifically designed for hotels. This is why we developed Green Engage. The system reflects most global environmental certifications and allows all of our hotels to map their performance against LEED and other standards.
VT: Do you think that hotels will face carbon taxes on their operations? If so, will this be passed on to guests?
DJ: At IHG, our primary concern is to make our hotels as efficient and sustainable as possible. And we are focused on looking at what we can do internally as a business first.
We operate in over 100 countries, each with their own legislation in which we operate and ensure that we comply. We work closely with our hotels to ensure they understand what they need to do to comply.
VT: Can you give me your vision of the hotel industry in 2020?
DJ: We believe that our future guests will not only want, but expect hotel companies to run their operations with corporate responsiblity principles at the core. That’s why we’re working towards ensuring our new hotels are as sustainable as possible. After all, it makes business sense to develop new properties that will be both efficient and sustainable and make a positive impact in the local community.
VT: Your Green Engage system appears to be very effective at reducing energy costs. Would you say that this is a major issue for potential and current hotel investors? Guests? IHG?
DJ: Our goal is to reduce energy, waste and costs without impacting the guest experience. Our owned/managed hotels met their target of reducing energy use by up to 10% in 2009
Clearly this has benefits for both IHG and our investors, who are empowered to make positive changes to their hotel operations through the suggestions from Green Engage.
We believe Green Engage gives us a significant competitive edge, making our hotels the most cost-effective in the sector and allowing us ultimately to improve the value of service we offer our guests.
VT: How high a priority is sustainability in your staff/management training and, in your experience, in the hotel schools?
DJ: We understand that proper staff training is essential to achieving our sustainability objectives. Many of the sustainability measures put in place by our design and construction teams are only effective if our employees are educated to use them properly. We encourage our hotels to implement training programmes for their employees on the hotel’s sustainability initiatives and to understand the purpose and goals of ‘green’ hotel management strategies.
Guiding guest behaviour is also crucial to the effective implementation of our sustainability measures. Through Green Engage we recommend that our hotels encourage responsible guest behaviour by:
- Using signage, literature and helpful front-of-house staff to draw attention to the green efforts of the hotel and encourage guests to participate.
- Promoting local sustainability shops, activities and alternative means of transport so that guests’ environmentally conscious choices permeate into the surrounding economy.
- Providing guests with feedback on their energy and resource usage in a friendly, informative manner.
VT: Are you optimistic for the future, if so, why?
DJ: Last year we worked hard to achieve our goals under innovation, collaboration, environment and community (for full details see question 3). We’ve made a good start, but there is still much work to do. We’re in a position now where we have the tools to achieve much more as we will continue to roll out Green Engage across our estate.
This year we’ve set equally high targets such as ensuring Green Engage is used effectively and regularly by hotels, increasing our dialogue with guests on our Innovation Hotel website, which allows us to find out what consumers are thinking around the environment and share with us ideas they think would work.
In our owned and managed estate, we seek to achieve an energy savings of 6% to 10% over the next three years (2010 -2012) on a per available room night basis – setting this target shows that we are committed to CR and optimistic for the future.
David Jerome and Valere Tjolle
Valere
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