Transforming Hospitality: The Impact of ESG Measurements

The hospitality industry, a significant economic driver, is transforming in response to rising environmental and social concerns. As consumers become increasingly aware of their ecological impact, hotels and resorts face pressure to implement sustainable practices. 

The industry's environmental footprint is considerable. With over 700,000 hotels and resorts worldwide, the industry generated roughly 500 million tons of CO2 emissions. The hotel sector alone contributes about 1% of global carbon emissions, underscoring the environmental impact of its significant energy use and resource consumption. Hotels are energy-intensive, relying heavily on electricity for heating, cooling, lighting, and water heating, often sourced from fossil fuels, leading to greenhouse gas emissions. Additionally, the high demand for water for guest accommodations, landscaping, and other services can strain local resources, particularly in water-scarce areas. Waste generation—from food scraps to plastic—is another critical environmental challenge. 

The travel and tourism sector employed around 320 million people in 2023, representing approximately 3% of the global workforce which also necessitates fair labour practices. Hotels play a vital role in local economies, especially in tourism-dependent areas. A World Bank study found that for every 10 jobs created in the hotel sector, nearly 26 additional jobs are generated in related industries, such as suppliers and transport. Hotels also support local economies by sourcing food and services locally and engaging in community projects. 

The International Tourism Partnership (ITP) stresses the importance of reducing carbon footprints in the industry through its Hotel Carbon Measurement Initiative (HCMI), which focuses only a smaller part of Scope 1, 2, 3 emissions. According to the Journal of Sustainable Tourism, luxury and all-inclusive properties often exhibit even higher emissions due to their energy-intensive services and amenities. 

Energy Intensity and Carbon Footprint 

Hotels are among the most energy-intensive buildings, consuming approximately 2.5 times more energy per square meter than offices due to their operational demands. Hilton’s 2022 ESG Report reflects this trend, emphasizing the hotel industry’s significant energy intensity. In response, hotels are targeting a 30% reduction in energy consumption by 2030 through enhanced efficiency measures. 

The industry’s reliance on non-renewable energy significantly impacts its carbon footprint, with estimates showing hotels generate between 20 to 30 kg of CO₂ per guest per night. Marriott’s Serve 360 Report indicates energy consumption accounts for 65% of its carbon footprint, prompting a goal to reduce emissions by 30%. 

Water, the depleting natural resource 

Water consumption in hotels is considerable due to various services offered, including guest accommodations, pools, landscaping, and dining. The World Wildlife Fund (WWF) estimates that the hotel industry accounts for around 1% of global freshwater use, highlighting its significant environmental impact. This high demand for water arises from essential activities like laundry and showers, as well as optional features such as spas, gardens, and swimming pools. 

On average, water use in hotels can reach up to 394 gallons per room daily, with luxury establishments consuming as much as 600 gallons per room in areas with water-intensive amenities. Given that many hotels are situated in regions already experiencing water scarcity, this consumption places additional strain on local water resources. 

Waste Challenges in the Sector 

The hotel sector is recognized as a significant source of waste due to its high turnover of guests and diverse services. Research from the Journal of Sustainable Tourism indicates that the average hotel guest generates approximately 1 kilogram (2.2 pounds) of waste per night. This waste consists of a mix of organic materials (primarily from food services), recyclables (such as paper and plastics), and hazardous waste (from cleaning products and certain amenities). Additionally, luxury hotels and resorts typically produce even larger volumes of waste due to their more extensive services and amenities. 

Marriott International reported that its properties generated 220,000 metric tons of waste globally. This figure aligns with findings from the Ellen MacArthur Foundation, highlighting the urgent need for sustainable waste management practices in hotels to mitigate their environmental impact.  

Chemicals and Indoor Air Quality 

Traditional cleaning products often contain hazardous chemicals, releasing volatile organic compounds (VOCs) that harm indoor air quality and pose health risks to guests and staff. Research indicates that these emissions can lead to respiratory issues, particularly in high-turnover environments. 

Impact of Hotels on Biodiversity 

Hotels near sensitive ecosystems such as coastlines, forests, or natural reserves, can significantly impact local biodiversity and disrupt ecosystems. According to WWF, habitat degradation related to tourism—including land clearing, water overuse, and pollution—has a notable effect on local flora and fauna. A study published in Global Environmental Change found that regions with a high concentration of hotels, particularly in ecologically sensitive areas, experience elevated rates of deforestation and habitat loss. This degradation not only threatens biodiversity but also diminishes the natural allure of these locations, which are often vital to local tourism economies. 

Research from the International Journal of Hospitality Management underscores that land use and construction associated with hotels are among the primary drivers of environmental change in tropical and coastal destinations, leading to habitat fragmentation, loss of endemic species, and soil erosion. Advocates for sustainable tourism stress the importance of hotel companies adopting practices that respect local ecosystems to mitigate these adverse effects. 

Understanding Emissions: Scope 1, 2, and 3  

Scope 1 emissions in hotels and resorts primarily originate from on-site energy consumption, including emissions from fuel used for heating, cooling, and hot water systems. For instance, gas boilers and furnaces that heat water for guest use or laundry directly contribute to these emissions. Additionally, emissions from hotel-owned vehicles, such as shuttle buses and service vehicles, also fall under this category, reflecting the impact of transportation on the hotel's overall carbon footprint. 

Scope 2 emissions are associated with the electricity purchased and consumed by hotels and resorts, primarily for heating, cooling, lighting, and operating appliances. Hotels that rely on fossil fuel-based power plants for their electricity will have higher Scope 2 emissions. Furthermore, the energy required to power large facilities contributes significantly to this category, as it encompasses the electricity used for heating and cooling systems. 

Scope 3 emissions include a variety of indirect emissions that occur in the value chain of hotels and resorts. This encompasses guest travel, such as emissions from flights and car rentals when guests travel to and from the property. It also includes emissions from staff commuting to work and the transportation of food and beverage supplies from farms and suppliers, often over long distances. Additionally, emissions related to waste disposal and treatment, including methane emissions from food waste in landfills, fall into this category, highlighting the broader impact of hotel operations beyond direct energy use. 

The Importance of Sustainability Measurement  

Sustainability measurement is crucial for hotels and resorts as it enables them to assess their environmental impact, comply with regulations, and meet the growing demand for responsible tourism. By accurately measuring their carbon emissions and resource usage, these establishments can identify areas for improvement, reduce operational costs, and enhance their reputation among environmentally conscious travellers. 

How SYNE Sustainability Management Ecosystem Supports the industry? 

The SYNE Sustainability Management ecosystem provides a comprehensive framework for hotels and resorts to measure and manage their sustainability efforts effectively. By incorporating Scope 1, 2, and 3 emissions tracking, SYNE enables businesses to: 

Scope 1: Direct emissions from on-site energy consumption and hotel-owned vehicles can be monitored to identify opportunities for energy efficiency and alternative fuel sources. 

Scope 2: By analysing indirect emissions related to purchased electricity, hotels can transition to renewable energy sources, reducing their carbon footprint and energy costs. 

Scope 3: Tracking indirect emissions from guest travel, staff commuting, and supply chain activities helps hotels understand their broader environmental impact and encourages sustainable practices throughout their value chain. 

ESG Ratings: ESG ratings enhance a hotel’s reputation, attracting eco-conscious travellers and fostering brand loyalty. They provide a competitive edge, improving access to investment and financing, as investors increasingly prioritize sustainability. High ratings also aid in risk management and ensure regulatory compliance, helping avoid fines. Implementing sustainable practices improves operational efficiency and leads to cost savings. Additionally, a commitment to ESG principles boosts employee engagement and retention by aligning with staff values. Overall, ESG ratings drive innovation, transparency, and stakeholder trust, positioning hotels for long-term success in an increasingly eco-conscious market. 

Industry Benchmarking: Industry benchmarking allows hotels and resorts to compare their performance against competitors, identifying strengths and areas for improvement. By analysing key metrics such as occupancy rates, energy efficiency, and guest satisfaction, properties can set realistic goals and enhance operational strategies. Benchmarking also facilitates the adoption of best practices, driving innovation and sustainability initiatives. Additionally, it supports decision-making by providing insights into market trends and consumer preferences. Ultimately, effective benchmarking enhances competitiveness, boosts profitability, and ensures that hotels and resorts align with industry standards, helping them adapt to evolving market demands. 

Enhancing Employee Engagement: In addition to emissions tracking, SYNE fosters employee engagement by involving staff in sustainability initiatives. This leads to:  

• Increased Awareness: Educating employees about sustainability practices encourages them to adopt eco-friendly behaviours, both at work and in their personal lives. 

• Collaboration and Innovation: Engaging employees in sustainability discussions can lead to innovative ideas for reducing waste, conserving energy, and improving operational efficiency. 

• Improved Morale and Retention: A commitment to sustainability can enhance employee satisfaction, making staff feel proud to be part of a company that values environmental responsibility. 

By leveraging the SYNE Sustainability Management ecosystem, hotels and resorts can effectively measure their sustainability metrics, engage employees, and implement strategies to minimize their environmental impact. This holistic approach not only supports compliance and enhances brand reputation but also contributes to long-term business success in an increasingly eco-conscious market.  

In recent years, major hotel chains have set ambitious goals for lowering their carbon footprints. Hilton’s 2022 ESG report indicates that energy use and carbon emissions make up nearly 75% of the company's environmental impact. The chain has pledged to achieve a 61% reduction in emissions by 2030, in line with the Science-Based Targets initiative.  

The International Labour Organization (ILO) highlights that hotels investing in employee well-being see lower turnover rates and higher job satisfaction. Marriott International and Accor have been recognized for their wellness programs focused on work-life balance, mental health, and career development. 

The hospitality industry plays a crucial role in global economic activity, contributing over 10% of worldwide GDP and employing millions, according to the World Tourism Organization (UNWTO). In tourist-driven economies, hotels are vital in supporting local income, fostering tourism development, and enhancing economic resilience. Research published in Tourism Economics shows that in many small and developing countries, the hospitality sector can account for up to 30% of total GDP, highlighting its essential role in economic stability and growth.  

Diversity, equity, and inclusion (DEI) are increasingly recognized as core business values in the hotel industry. McKinsey reports that companies with diverse leadership teams are 25% more likely to achieve above-average profitability, emphasizing the importance of DEI initiatives. 

Guest satisfaction directly impacts a hotel’s reputation and profitability. According to the American Customer Satisfaction Index (ACSI), hotels that prioritize customer service and maintain an active social media presence tend to have higher loyalty rates by effectively responding to guest feedback and demonstrating social responsibility. 

By leveraging the SYNE Sustainability Management ecosystem, hotels can effectively measure sustainability metrics, engage employees, and implement strategies to minimize environmental impact. This comprehensive approach supports compliance, enhances brand reputation, and contributes to long-term business success in an eco-conscious market.