Are you greening your hospitality project? You could benefit from
more than just energy and water savings.
LEED-certified hotels generate more revenue than those without the certification,
finds a study from Cornell University.
While popular with commercial and educational buildings, LEED has been slow
to gain steam in the hospitality industry.
The first property was certified in 2004,
and LEED v4, which launched last year, is
the first time hotels have their own rating criteria. Several studies have already
confirmed the performance benefits for
LEED, but revenue advantages had yet to
Researchers compared the earnings
of 93 LEED-certified hotels in the U.S. to
514 non-certified competitors. The study
examined a mix of franchised, chain, and
independent operations in largely suburban or urban markets, with 75% on the
small side (75-299 rooms).
Data shows green hotels are able
to increase both their average daily
rates (ADR) and revenue per available
room (RevPAR). The hotels that would
eventually earn LEED already had an
ADR that was nearly $10 higher than the
non-certified properties ($169 vs. $160).
After obtaining the certification, the
ADR for LEED hotels was an average of
This difference is surprising considering
the importance of cost competitiveness
in the U.S. hotel industry. Many hoteliers
have difficulty justifying higher rates
to price-conscious customers, note the
study authors, yet these LEED hotels
were able to collect a substantially high-
er rate than their non-LEED competitors.
Eco-minded travelers, it appears, may
be willing to pay a modest premium to
lodge at a property with verified green
One hospitality group, Hyatt Hotels,
has even stipulated that all new construction and major renovation projects will
achieve LEED or an equivalent certification starting in 2015. Hyatt currently owns
14 LEED properties.
The company has also set a goal of a
25% reduction in energy use, greenhouse
gas emissions, and water intensity by
2020. Its properties have already made
significant gains, such as lowering water
by 15%, energy by 8%, and greenhouse
gases by 17% compared to 2006 levels.
To achieve its 2020 goals, Hyatt will
continue to expand on retrofit op-
portunities, such as variable-speed
fans in HVAC systems, tinted or filmed
windows, low-flow bathroom fixtures,
on-site alternative energy, cool or green
roofs, and lighting upgrades.
Every managed hotel is also required
to recycle or otherwise divert waste by a
minimum of 40%. This includes recycling
for guests, composting food scraps, purchasing products with less packaging,
and recycling or repurposing renovation
LEED Increases Hotel Revenue
Higher rates complement energy savings
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