|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.
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:
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
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).
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.
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.
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.
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.
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.