green hotelsThe Westin hotel in Westminster, Colo., next month will become the first hotel in Colorado to install solar panels, capping a $9 million renovation that included a number of green upgrades to its energy and water systems.

The project seems fitting for a state that boasts more than 300 days of sunshine each year but also is just outside the liberal and highly environmentally conscious city of Boulder.

While solar panels are fairly rare in the hotel world, the project is just one example of the long and fast-growing list of commitments hoteliers around the country have made over the past few years to "green" their operations.

It was not that long ago, at the height of the hotel development boom in 2006 and 2007, that the industry as a whole really began talking seriously about the environment and how to improve not only their buildings but their day-to-day operations.

While there was plenty of skepticism at the time about whether such talk signaled a passing fad or a real commitment, it's now clear that the industry has made substantial progress.

"I think there have been a couple of factors that have driven that," said Rod Millot, who leads Deloitte's sustainability practice. "During the good old days of 2007, perhaps it was driven a bit more by [public relations], about how it was the right thing to do."

But he also added: "At the end of the day, it's a business. They are doing it for a business reason."

Indeed, between tax incentives, utility rebates and the quick return on investment for many heating, cooling and water system upgrades, "it's a no-brainer," said Bryan Boyce, director of energy operations for Sage Hospitality, a Denver-based hotel management and development company whose properties include the Westminster Westin.

Sage also has several hotels certified by the Leadership in Energy and Environmental Design program, including Courtyard by Marriott properties in downtown Denver and Portland, Ore.; the Nines in Portland; and the Blackstone in Chicago.

"There are tremendous rebates from utility companies as well as tax breaks from the federal government," Boyce said. "And these rebates and tax breaks can virtually pay for those projects."

The U.S. Green Building Council, which administers the LEED program, says there are currently 1,036 lodging projects registered to attain LEED certification. That's up from 187 in July 2008, when only 11 had actually been certified.

"We have seen huge growth," said Sara Schoen, a commercial real estate associate at the USGBC. "The projects have been continuing to grow despite the downturn, and I think when things pick up it's going to be even stronger."

Moreover, those numbers don't include projects like the Westin Westminster, which incorporated a number of environmentally friendly upgrades into its recent renovation but is not seeking any special certification for its efforts.

Ironically, Millot said, the economic downturn and the deep hit it took on hotel earnings spurred some of the decisions by hotels to green their operations.

"What transpired over the last couple years is that the business imperative remained, because as energy prices went up ... and revenue took a dive, they had to take a good look at expenses and anything that could make them more efficient," he said.

In other words, Millot said, "It's not necessarily sustainability for sustainability's sake -- and maybe it never was -- but clearly it's sustainability that has a real return to owners."

At the Westin, General Manager Dani Stern said the $147,000 solar project will cost the hotel just $39,000 after rebates, and it is expected to save more than $75,000 in energy costs over the next 20 years. The hotel expects a nine-month payback on the $164,000 it spent to upgrade its heating and cooling systems.

"In this corridor there is a real push for renewable energy," Stern said. "We wanted to go ahead and be leaders in the city and hopefully in the state. It's not only the right thing to do, but it also makes business sense."

In addition to energy system upgrades, the recent renovation included things such as installing motion sensors that shut off utilities when rooms are empty. And like many properties, it has implemented recycling throughout the hotel and green meetings programs that include practices such as eliminating bottled water in favor of old-fashioned pitchers.

The hotel has also introduced a program designed to go beyond simple linen and towel reuse programs; it gives guests a $5 credit or 500 bonus points if they forgo housecleaning altogether. Stern said about 7% of guests choose that option, which is not available for more than two consecutive days.

Mainstream Green

Although hotel companies such as Banyan Tree, Fairmont and Kimpton were going green long before it was fashionable, the movement has gone mainstream.

Among the leaders of the big brands are Marriott and Starwood, which have each developed LEED prototypes to make it easier for developers to meet USGBC standards.

green travel logoCurrently, Marriott has five LEED-certified hotels, and about 300 are Energy Star-compliant, said Karim Khalifa, senior vice president of design and project management for Marriott's select-service brands.

Marriott's Ritz-Carlton luxury brand, meanwhile, just won LEED certification for its first property: the Ritz-Carlton Charlotte, which achieved LEED gold certification, the second-highest rating after platinum.

"We are projecting to go to 300 hotels by 2015," Khalifa said of the Marriott brands. "How we get there from where we are is going to be an interesting proposition. We think that volume building with prototypes that make it easier for owners will help us achieve those goals."

Marriott has developed a LEED prototype for newbuilds of its Courtyard brand, and Khalifa said the company is working with the USGBC on a program that will provide properties a checklist of sorts to make it easier for existing buildings to gain LEED certification, "so that every time a property makes an incremental move, they are doing so on a path that eventually will reach certification with LEED. We are setting that up right now."

To help learn about the process and more about the challenges, Marriott recently finished a three-year upgrade to its headquarters that earned it LEED gold certification.

The changes, which are expected to save the company $700,000 annually and $1.3 million in tax credits over three years, included:

  • Achieving and maintaining an Energy Star rating of 77 out of 100 for the past three years.
  • Increasing the recycling rate to 69% in 2009 and diverting all headquarters waste from landfill to a waste-to-energy plant.
  • Eliminating disposable products and converting to reusable dishes and flatware in the cafeteria.
  • Purchasing higher-efficiency lighting options with reduced mercury content.
  • Participating in Demand Response energy-reduction programs, earning more than $100,000 in electricity rebates.
  • Installing motion sensors in all restrooms and telephone and electrical closets.
  • Switching from evening to daytime office cleaning.
  • Choosing cost-neutral or highly recycled office supplies.

"I think we decided to set our example," Khalifa said. "It was a good learning experience for us as a company ... and I think there is something to the old adage about cleaning up your own house."

Starwood Hotels and Resorts has created the first brand that will require all properties to have LEED certification. The brand, known as Element, is an extended-stay offshoot of the Westin brand. It currently has seven properties.

Wyndham Worldwide, like Marriott, also recently received LEED certification at its headquarters. The company won silver status for its building in Parsippany, N.J.

What's more, the list of green projects being developed by the major brands is growing daily.

Hilton last week unveiled what it says is the "most advanced sustainability-tracking system in the hospitality industry." Called LightStay, the system measures the use of energy and water and output of waste and carbon across more than 200 operational practices, such as housekeeping, paper product use, food waste, chemical storage, air quality and transportation.

Following two years of testing, Hilton says LightStay results show that the 1,300 Hilton Worldwide properties using the system conserved enough energy to power 5,700 homes for a year, saved enough water to fill more than 650 Olympic-size pools and reduced carbon output equivalent to taking 34,865 cars off the road. Reductions in water and energy use also translated into dollars-saved for hotel owners, with estimated savings of more than $29 million in utility costs in 2009.

The company said the system helped Hilton Worldwide properties that use the system reduce energy use by 5%, carbon output by 6%, waste output by 10% and water use by 2.4% in 2009 vs. 2008. The results were independently audited and were adjusted for any differences in occupancy levels and major weather events year over year.

"LightStay is an integral part of our effort to operationalize sustainability at Hilton Worldwide," said Paul Brown, president of global brands and commercial services for Hilton. "The system goes a long way in helping us to quantify our impact at the property level and companywide. We're excited about our first-year results and look forward to using LightStay to continuously improve hotel performance across our global portfolio."

Green Payback

How much LEED certification costs and how much it returns varies widely by project and location.

Gene Singleton, who developed the first LEED-certified hotel in Baltimore, a Fairfield Inn in the downtown Inner Harbor area, said developing the property to meet gold LEED standards added about 2% to his costs, and he began the project in 2007, before there were any real tax or other incentives.

The hotel was developed under newbuild standards, although it incorporated parts of a historical building, including a silo from a former brewery that is now used to collect rainwater for use on the property.

"We spent about $400,000 on the whole LEED process, including consultants and all the upgrades," Singleton said. "And we have calculated, based on our energy and water consumption, we are on target to get an 18% annual return on that investment."

Based on those numbers, he estimates a five-year payback.

The Westin Riverfront in Avon, Colo., opened in September 2008 and is the state's only silver LEED-certified hotel. General Manager Bob Trotter estimates that building green increased construction costs by about 5%.

Singleton, who is also seeking LEED certification for an existing TownePlace Suites he owns at Baltimore-Washington International Airport, said the total cost of upgrading an existing building to LEED standards is significantly less than the LEED process for newbuilds. He said he has spent about $75,000 on that project.

Just as importantly, owners say, while it is clear that the right greening programs have a favorable ROI, they also help attract new customers.

Even online travel agencies are starting to develop directories to point customers who care about environmental issues to green hotel properties.

Singleton said that in its first six months of operation, his Inner Harbor hotel won a number of awards for its energy savings, which in turn have won him customers that might not otherwise have considered a Fairfield Inn.

"Getting the LEED certification has helped us in calling on business accounts ... to get in for consideration with companies like Legg Mason and T. Rowe Price," he said.

"The Fairfield brand is more targeted toward leisure and families; Courtyard and full-service hotels are more targeted to business travelers. ... But because we are green and LEED-certified, some companies are interested in sending us a portion of their business."

At the Westin in Boulder, Stern said he is having the solar panels installed on the porte cochere at the hotel entrance. While some brands might not allow such a visible installation, he thinks it will help business in a very green-conscious community.

"They want to see them," he said. "They want to say, 'I am staying in a hotel that is environmentally sensitive.' ... It's a little hip, a little cool."

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