Environmental Management: 
The Key to Successful Operation
by:
Bill Meade, Sustainable Tourism Services, Hagler Bailly, Inc. USA
Antonio del Monaco, Sustainable Tourism Services, Hagler Bailly, In.c, USA
 
The Caribbean hotel industry is positioned to reinvent itself in a way that improves profitability, enhances guest relations, builds bridges into the local communities, and preserves the Caribbean's natural beauty. Over the past 2 years, this trend has been translated into results in Jamaica in the form of the Environmental Audits for Sustainable Tourism (EAST) project, sponsored by the Jamaica Hotel and Tourist Association and funded by the United States Agency for International Development (USAID). This paper presents a case study of the USAID/ Jamaica EAST project demonstrating the power of becoming an environmentally friendly hotel through the adoption of an environmental management system (EMS), a comprehensive organizational approach designed to achieve environmental care in all aspects of operations. Partnering environmental protection with cost-saving environmental improvements and best practices, the EAST project is a model for the hotels and tourism destinations in the Caribbean region and beyond for environmental assessments and actions, as well as voluntary environmental audits that can lead to the GREEN GLOBE International Certification. 

Introduction 

A "quiet revolution" is taking place in the Caribbean - one less visible than the construction of new hotels and the building of new cruise ships. Nevertheless, its advent is profoundly changing the nature and shape of the tourism and hospitality industry, in every hotel guestroom, housekeeping, laundry or maintenance facility, and in every tourism destination that elects voluntarily to join the environmental movement.  This revolution is environmentally sustainable tourism. The Caribbean hotel industry, particularly, is positioned to reinvent itself in a way that improves profitability, enhances guest relations, builds bridges into the local communities, and preserves the Caribbean's natural beauty. Over the past 2 years, this trend has been translated into results in Jamaica in the form of the Environmental  Audits for Sustainable Tourism (EAST) project, sponsored by the Jamaica Hotel and Tourist Association and funded by the United States Agency for International Development (USAID). 

USAID / Jamaica EAST Project Description 

In  1997, the Jamaica Hotel and Tourist Association, Government of Jamaica, Jamaica Manufacturers Association, and a number of tourism-related public and private-sector industry organizations  committed  to  undertake  the Environmental Audits for Sustainable Tourism (EAST) project. With funding from the U.S. Agency for  International  Development,  Hagler  Bailly implemented a program of environmental audits within a corporate environmental management system aimed at the tourism and hospitality industry in Negril, with a smaller component focused on manufacturing industries in Kingston and St. Andrews.  The project is a model for environmental action and voluntary audits for the tourism sector, combining promotion and outreach, training, audits, and investment. 

The objectives of the EAST program are: 

  • to develop greater awareness and understanding of the benefits of environmental systems and audits among hotel and restaurant owners and allied tourism businesses;
  • to upgrade the technical skills of Jamaicans who are expected to conduct the audits and advise on environmental management systems;
  • to assist a select, representative number of tourism-related establishments in carrying out environmental audits, and
  • to help finance in the tourism industry, on a cost-sharing    basis,    selected    audit recommendations in order to demonstrate the financial benefits of the systematic application of environmentally friendly practices and, thereby, encourage others in the tourism industry to do likewise.
The activities of the EAST project include: 
  • institutionalizing environmental management in the tourism industry; 
  • performance monitoring of EAST demonstration hotels; 
  • environmental assessments, audits, and certification; environmental awareness and training; regulatory assistance in environmental licensing; 
  • audits and technical assistance in the manufacturing industry; 
  • targeted environmental investment  fund  feasibility  and  financing; performance awards programs, and international human  resources exchange  programs. 
An important next step for Jamaica is to sustain and expand this improved level of environmental management among government and private-sector organizations. 

EAST Findings and Results 

The following is a discussion of some of the EAST findings and results. When Hagler Bailly began in June of 1997, the awareness was quite high in Negril (the target area for the EAST project) due primarily to the influx of questionnaires and surveys sent by European tour operators such as Tui and British Airways Holidays. These inquiries were from European markets interested in buying the export products, e.g., traveling to destinations supporting environmental best policies and  management practices. 

Hagler Bailly started with a survey of hotels in Negril to ask hoteliers why they choose to become "environmentally friendly." The results showed a genuine concern about the impact their operations have on the physical environment and an appreciation for how this can be translated into cost savings.  Interestingly,  the  government's enforcement of environmental laws and standards ranked lowest.  This told us that hoteliers were interested in measurable results and that they would respond better to incentives than to government intervention. Initially, however, when we asked individual hoteliers what they thought "going green" implied, the most common answer was to replace plastic straws with paper straws. The obvious next  question,  since  none  of the respondents had achieved the "environmentally friendly" status, was what are the perceived barriers to becoming a green hotel. The results pointed to the up-front cost of learning how to make the transition, and then to the financing to 
implement it. 

Hotel Environmental Management System 

One of the most critical elements of becoming an environmentally friendly hotel is the adoption of a new culture that extends throughout the hotel organization, and between the hotel and its guest, local community, and even its vendors. We call this an environmental management system (EMS). 

An EMS is defined as a comprehensive organizational approach  designed  to  achieve environmental care in all aspects of operations. The International Standards Organization (ISO) 14000 series is an international standard for EMS. The World Travel and Tourism Council's GREEN GLOBE international certification has developed an EMS standard specifically for the travel and tourism industry. 

An effective EMS can help a hotel assure its guests of its commitment to environmental management as partners in programs such as recycling, linen and towel reuse, etc. It can set specific and realistic performance objectives and targets, and allow the hotel to monitor to see if the objectives and targets are being met. As mentioned earlier, it can enhance a hotel's image in the marketplace and help reach nearly 43 million Americans, as well as hundreds of thousands of environmentally aware tourists from Europe and elsewhere interested in visiting environmentally friendly   destinations   and   staying   in accommodations with environmental policies and programs in place. Most importantly, an EMS can improve efficiency and reduce operating costs. In fact, the savings alone should be sufficient for any hotel to commit to implementing an EMS. 

Few hotels today have what we would consider an EMS. This is not to say that there are no hotels implementing environmental programs such as water conservation and composting, but it is typically not done as part of a larger management system,  nor  is  it  integrated  with  other environmental programs.   There is a growing demand to have an EMS that meets international standards such as ISO 14001 and GREEN GLOBE. An EMS evaluation, because of its broad-reaching implications, will begin to encompass other concerns such as health, safety, and security, emergency preparedness, compliance with discharge and emissions standards, and employee training. 

What constitutes an EMS?  The principal components of an EMS, as defined by GREEN GLOBE, include the following: an environmental policy that clearly communicates the organization's commitment to maintaining the social, cultural and physical environment; an action plan to guide the property's actions and expenditure of resources; the implementation or operations of the EMS that encompasses all of the property's actions relative to the environment, including awareness and training, staff  procedures,  incentive  programs,  and community outreach among other things; corrective action or monitoring to ensure that the EMS performs as expected, allowing for responsive actions to capture things such as leaking toilets and chemical spills and review, typically by senior management, to determined how to improve the EMS and the level of compliance with the hotel's environmental policy. 

EMS and Environmental Programs 

Many will say, we already have hotels in the Caribbean that are operating in an environmentally responsible manner. That is to say that the hotel is currently composting much of its organic solid wastes, or that guestrooms have low flow showerheads installed. We call these environmental programs.  An EMS is the integration of those programs under a comprehensive organizational system. An EMS takes the following approach to addressing its environmental issues (or aspects as they are referred to in the standards). 

  • First, an assessment is done to determine what improvements can be made, how much they cost, and what types of changes in consumption or waste generation can be expected.  The assessment also allows you to establish a baseline  against  which  change  can  be measured.
  • Next, the hotel sets objectives such as to reduce water consumption for the entire property by 10%. Each objective is supported by a set of specific targets, such as introduce towel and linen reuse program by June 31st, or install low-flow showerheads in guest rooms and staff locker rooms by August 1st.
  • The individuals, or departments, responsible for achieving the targets are identified in an action plan.  It is important to remember that the greatest improvements are made through changes in staff procedures.
  • Finally, the impact or results, in terms of changes from the baseline, must be measured and documented. This provides the necessary feedback to determine whether the EMS is working.
The EMS can be viewed as the integration of multiple environmental programs.  Environmental programs are typically designed to address a specific environmental problem or issue such as recycling or composting solid waste; or are focused on a specific department such as a linen reuse program in housekeeping and laundry.  In some instances, particularly for smaller hotels, environmental programs may involve multiple properties, such as sharing the cost of a bottle crusher for glass recycling 

EAST Environmental Management Audit Findings 

Hagler Bailly designed a specific audit protocol that combines the attributes of an energy audit, an environmental audit, and a management audit --the EAST Environmental Management Audit. We tested the audit protocol on the full range of hotel properties, from 15 rooms to over 200 rooms. The audits covered the following areas.  energy use, water use, wastewater generation and disposal, solid waste generation and disposal, use of chemicals, and management and staff practices. 

Summarized below are some of the general findings of the EAST audits. 
 

Inefficient use of water  -  Leaking toilets accounted for 40% of the daily water use in one 35-room hotel.  The cost of the leaks was US$600 per month.  In another property, a defective drain valve on a washing machine increased laundry water use by more than 1 million gallons per year equivalent to US$6,000 of wasted water.
Inefficient use of energy -   Loose louvers and doors and poor insulation force air conditioners to work continuously in order to keep guest rooms cool. This mode of operation increases energy consumption and shortens the air conditioner's service life.
Excessive and unnecessary use of chemicals - Instead of manually cleaning the kitchen grease trap, a property used 420 gallons/year of sulfuric acid (or Drano) to do the job. This cost of this dangerous habit exceeded US$6,000 per year.
Excessive solid waste generation - A 25-room property spent US$1,700 per year to purchase large plastic trash bags. Many properties place all yard waste in plastic bags and pay to send this material to the dump. Organic wastes from kitchen and landscaping accounts for up to 50% of a property's solid waste and can be easily composted.
Staff  not  participating  in  environmental programs - In 90% of cases, housekeepers automatically replace all used guest towels in properties that have towel reuse programs.
Poor (or no) monitoring - Approximately 70% of audited properties had no effective utilities monitoring program. Water and electricity bills are simply received and paid. A 20,000-gallon per day leak went undetected for more than a week because the property didn't check the water meter daily.
There was considerable variation in water use among 14 properties we audited ranging from 15 to 70 rooms.  To provide a common base for comparison, we calculated each hotel's consumption in terms of Imperial gallons per guest night. The results are shown in Figure 1. The most efficient of the hotels used just one-third the water per guest night of the least efficient. 
 
Figure 1. Water Use in Properties Audited by EAST
Imperial gallons / Guest Night
Most Efficient Hotel
116
Average Efficient
216
Least Efficient
351
A similar comparison was also done among audited properties for electricity consumption. The results are shown in Figure 2. Again, the most efficient hotel used only one-quarter of the electricity per guest night of that of the least efficient hotel. 
 
Figure 2. Electricity Use in Properties  
Audited by EAST
KWH / Guest Night
Most Efficient Hotel
8.7
Average Efficient
21.4
Least Efficient
32.9
Detailed Analysis of Efficiency Improvements in the EAST Demonstration Hotels 

The water and energy use indices of a hotel are affected by occupancy rates as well as by its conservation efforts and investments in efficient technologies. As a general rule, water and energy indices rise during low occupancy months and drop during high occupancy months.    Given the influence of occupancy and conservation efforts on efficiency, the monitoring data collected from the properties should be analyzed in greater detail to ensure that efficiency gains result from improved environmental  practices  rather  than  better occupancy rates.   This higher scrutiny is particularly important, for example, in the case of a hotel that reduced its water and electricity use indices by more than 25% while simultaneously increasing its occupancy by 16%. 

Figures 3 and 4 present the result of a more rigorous data analysis, and show how the hotel's monthly water and electricity use indices varied with respect to occupancy before and after its involvement with the EAST project. Since the water and electricity use indices are consistently lower "after" the EAST audit, regardless of the actual occupancy levels, these graphs prove that the property's water and electricity savings are due to improved conservation practices rather than higher occupancy rates. The vertical distance separating the "before EAST" and "after EAST" trend lines represents the actual water and electricity savings achieved through the property's conservation efforts at any given occupancy level. 
 
 

Figure 3. Electricity Use Index Versus Occupancy for a Hotel 
Before and After EAST /  
Note: 1,000 GN/month is approximately 
equivalent to 100% occupancy.
Source: Performance Monitoring Report on EAST Project Demonstration Hotels. 
Hagler Bailly, 1999.
 
 
Figure 4. Water Use Index Versus Occupancy for a Hotel Before and after EAST 
Note: 1,000 GN/month is approximately  
equivalent to 100% occupancy.
Source: Performance Monitoring Report on EAST Project Demonstration Hotels. 
Hagler Bailly, 1999.

Recommendations for Improvement 

So what did it take to improve performance in a typical Jamaican hotel? 

Most of the recommendations made in the EAST Audit reports have the following characteristics. They have low implementation costs, rapid payback periods, and they are relatively simple and easy to implement. 

The EAST auditors also found that the greatest environmental and financial benefits can be achieved by improving:   frequent monitoring, particularly utility bills; management supervision, oversight to ensure that programs are operating effectively; staff practices, training, and providing incentives for staff to implement programs, and preventive and routine maintenance, particularly of energy- and water-using equipment.   In the breakdown of EAST audit recommendations for a typical hotel, the following was evident. Over three-quarters of the recommendations cost less than US$10 / guest room, 19% of the recommendations cost between US$10 - 50 per guest room and only 3% cost more than US$50 per guestroom. 

Payback period is defined as the length of time required before the savings from a measure equal the cost to implement the measure. In terms of payback period for EAST audit recommendations: 62% of the recommendations had a payback of less than 2 months, another 36% had payback periods of between 2 months and 1 year, and only 2% had payback of greater than 1 year. 

Another way to break down the EAST audit recommendations is by area of activity (or department) in the hotel. Our auditors identified that the largest, by far, can be found in the maintenance and engineering department.  We should note that more often than not, the problems lie in insufficient resources resulting in shortages of staff, parts, and supplies, and unwillingness to pay repair bills to fix a problem properly.  Guest rooms (or housekeeping department) and restaurant and bar (or food and beverage department) accounted for 15 and 16 percent of the recommended actions, respectively. This is mainly due to the high degree of energy and water used in these areas. 

Advantages of a "Green Hotel" 

During our visits to Jamaica, we became aware of one small hotel in Port Antonio - Hotel Mocking Bird Hill - that has made considerable strides in improving  environmental  performance.    For purposes of the following example, we will refer to Mocking Bird Hill's consumption levels as that of a "green hotel." Using the average from the 14 EAST hotels audited for both water and electricity; we show the difference relative to the "green hotel." 

Looking now at an illustration of the cost advantages of a green hotel, let's assume a 50-room hotel, with 60% occupancy, and 2 guest per room. Over the course of a year, the water savings are over3.6 million gallons, or savings of US$21,829 in water bills. The electricity savings are 186,000 kWh per year, or savings of US$23,886 in electricity bills. Total savings, for both water and electricity amounts to US$45,715 per year. 

The savings can greatly improve a hotel's profitability.  For example, if it takes US$10 of revenue to generate US$1 of profit, savings of US$45,715 in utility costs would have an impact equivalent to US$457,150 in additional revenue. Assuming average revenue of US$100 per guest night, the savings represent the equivalent to additional 4,571 guest nights worth of revenue. 

Cash Flow Associated with "Going Green" 

So how would the investment and savings look over an extended period of time? Most of the costs are incurred in the first 9 months. These include the cost of an external audit, energy and water savings equipment, and training of key staff. After the first year, the costs are only associated with preventative maintenance and preparing for the annual GREEN GLOBE certification. Over a 3-year period, the initial investment of US$40,000 will yield approximately US$112,000 in savings, or a net profit of about US$70,000. 

Implications for the Jamaican Hotel Industry 

Just to illustrate the point further, we asked the question:  "What would becoming a green hotel mean for Jamaica as a whole?" Here we have used the  Jamaican  Tourist  Product  Development Company (TPDCo) hotel data for 1996, assumed 60% occupancy and 2 guests per room like the earlier example. Obviously, this over-simplifies the hotel industry, but the point is valid. 

For all of Jamaica, the difference between an industry comprised of green hotels and one comprised of average hotels is over 930 million gallons of water per year. The green hotel industry will use 77% less water than the average, and 86% less than the inefficient hotel industry.  The reductions in water consumption also translate directly to the volume of wastewater coming from the hotel industry. We can do the same simulation for energy or specifically electricity consumption. For all of Jamaica, the difference between green hotels and the average hotel industry is over 47 million kilowatt-hours per year.  The green hotel industry will use a third less electricity than the average, and two-thirds less electricity than the inefficient hotel industry. 

Conclusion 

So what does this all mean to the Caribbean hotel industry? First, it is a "win-win" proposition. You can improve your market share while reducing your operating costs. Second, it is neither rocket science nor is it untried or untested. The audit recommendations are relatively simple and proven to work right here in the Caribbean. Third, you have no choice. 

Resorts throughout the Caribbean countries and hotels all over the world have recognized the advantages  of  going  green.    International certification programs like GREEN GLOBE are driving the industry toward improved performance. This means that instead of getting the marketing advantage of being a leader, those that fail to make the transition may soon be termed as "brown hotels." Know anyone who would prefer to stay in a brown hotel rather than in a green one? 

We should also look at what it means to different stakeholders such as the government and local communities across the Caribbean. The reduced water, wastewater, and energy consumption levels of a green hotel industry translate directly to reduced  shortages  and  lowered  needs  for infrastructure  in  water  supply,  wastewater treatment plants, and power plants.  The same holds true for solid waste and the need for sanitary landfills. 

So the more important question becomes, what are the hotels waiting for? Governments should begin laying out the necessary incentives and standards to move the industry in this direction. Banks should open special lines of credit to finance the  improvements.    And  Caribbean  Hotel Association, Caribbean Tourism Organization, and the tourist board of each island should find ways to link the marketing of Caribbean hotels directly to the computers of those millions of so-called "eco-tourists" in the U.S. and Europe who are beginning to plan their next family vacations. 

In conclusion, we will make the following observation - you can lead hoteliers to water, but you cannot make them drink out of paper straws. 

References 

Hagler Bailly (1999).   Performance Monitoring Report on EAST Project Demonstration Hotels. Arlington, Virginia. 

Hagler Bailly (1999). Assessment of Voluntary Environmental Rating and Certification Programs. Arlington, Virginia.

 
©First Pan-American Conference
Latin American Tourism in Next Millenium: 
Education, Investment and Sustainability
May 19-21, 1999 / Panama City, Panama
Editor: Professor Kaye Chon, University of Houston

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