Starting around 2020, hotels began to see increasing interest in sustainability data relating to stays by corporate customers – asking about the carbon footprint of their stay and other aspects related to climate-friendly practices. [1]
Demand for sustainability data like this is growing rapidly among both leisure and business travelers, who are now looking to get the full picture of the environmental impact of their travels. But it’s businesses in particular that are seeking out a more structured means of quantifying and tracking this data.
So for today, we’re looking at what is driving this demand for hotel sustainability data and how the market is adapting to facilitate this.
Climate consciousness is, of course, nothing new in the travel industry: We’ve spoken at length about the sentiment and potential solutions for sustainable travel – like carbon offsetting or the benefits of trains vs planes for business travel – in the past. However, in many cases the conversation is focused solely on transportation.
Hotels are also doing their part in promoting and implementing sustainable practices. Whether through practices like reducing use of chemicals when doing laundry or introducing reusable toiletries for guests, there has been a noticeable difference in how they approach the topic.
Instead, it’s a case of the infrastructure for measuring, tracking, and delivering this information to customers in a structured and standardized way not being mature.
First, we need to ask: What can explain this sudden surge in demand?
When we break it down, there are a few clear factors at play that go a long way in explaining this. Here are a couple of the biggest:
The general sentiment of travelers towards sustainability is general is now higher than ever. Our latest data has revealed that people are traveling more consciously and organizing their trips to be longer, rather than taking multiple shorter trips. [2]
According to one report, as many as 81% of travelers are planning to book sustainable accommodation in the near future. [3]
And they’re doing their research too: Hotel brand Hilton found that around a third of travelers investigate a hotel’s environmental and social practices before making a booking. [4]
You get the idea – travelers are looking to make sustainable choices for their travels.
The topic of ESG, environmental, social, and governance, is now more important than ever. Businesses need to demonstrate to outside parties that they are taking responsibility for their actions in relation to ESG as there are financial incentives for doing so – and ramifications for not.
Knowing this, it’s clear why businesses in particular are increasingly demanding this data. And they have a sizeable voice.
Based on previous data, we can see that business travel contributes around two thirds of revenue for the hotel industry, so there is a clear incentive for hotels to get onboard. [5]
Another factor in all this is regulations. In the race to net zero, new guidelines, requirements, and laws have been introduced to cut down on carbon emissions.
For the purposes of this article, there are two more modern examples worth highlighting: the Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive.
Supply chain sustainability
Many countries currently have their own rules when it comes to sustainability across a business’ supply chain. And with a broader directive on corporate sustainability due diligence – the Corporate Sustainability Due Diligence Directive (CSDDD) – in the works for the EU, this will only become more important to act on.
Using this proposed corporate sustainability due diligence duty for example states that it:
“…applies to the company's own operations, their subsidiaries and their value chains.” [6]
While the directive is still in its early stages, it seems that business travel and thus hotel stays are likely to be part of their ‘value chain’.
CSRD
The Corporate Sustainability Reporting Directive (CSRD) is set to come into force as early as January 2024 for many companies – depending on certain criteria. It requires that businesses report on a wide range of factors relating to sustainability and societal impact, with the aim of strengthening and harmonizing sustainability reporting requirements across the EU.
While the CSRD doesn’t outright require reporting of hotel sustainability data (which lies outside the directive's co-called Scope 3 reporting for indirect source emissions), it does add to the pressure businesses are feeling when it comes to their approach to sustainability policies relating business travel.
These factors and likely many more go a long way to explain why the demand for sustainability data relating to hotel stays has increased so much.
And where there is demand, there will be supply.
The market has taken note of this demand and has made strides in making hotel sustainability data more accessible. These new solutions are making it easier to track these emissions and make better choices when it comes to travel accommodation.
There are a few different ways this is being achieved:
88% of business decision makers have said they prefer hotels that are transparent about sustainability when it comes to compliance. [7]
Knowing this, the industry is developing ways to increase transparency and enable businesses to select eco-friendly travel and accommodation options.
After finding that 29% of travelers didn’t know how to find sustainable travel options, the popular travel booking platform Booking.com developed its own independent verification program. [8]
The ‘Travel Sustainable’ initiative makes it easier to select environmentally friendly travel options. The program identifies the most impactful practices of properties across five key areas: waste, energy and greenhouse gases, water, supporting local communities, and protecting nature.
Those that meet the required threshold for impact receive a badge that is prominently shown on the listing page of the property.
Booking.com also plans to display the total carbon emissions footprint for a selected flight on the flight details page over the coming weeks, as well as an option to sort the flights based on this. With this, businesses will be able to determine the most sustainable choices for their business travel.
Another way the industry is adjusting towards sustainability is by helping hotels and other accommodations to decarbonize.
Lodging procurement and booking platform HRS is one such pioneer in this area. The platform is, among other things, providing support to hotels to become greener. This is done by identifying potential environmental, water and waste management issues and providing tools for tracking them.
More specifically, HRS is implementing an auditable carbon footprint assessment that provides quantifiable data at property level. This allows metrics-based management of the hotel program from a corporate perspective and provides an accurate report of the emissions caused.
By providing the relevant information, hotels are able to meet the increased requirements from the corporate side. Accommodation providers are then, of course, free to improve these metrics.
Martin Biermann, CPO at HRS, describes its work with hotels to facilitate sustainable practices:
“At HRS, we are committed to support our customers as well our hotel partners in providing actionable data around the carbon footprint of hotel stays to allow for greener choices, thus a reduction of avoidable emissions and moving forward also high-quality compensation options for unavoidable emissions.”
HRS is continuing to follow its three ‘r’ sustainability approach of reporting, reducing, and removing emissions derived from hotel stays.
To summarize: Sustainability isn’t new to the hotel industry. We don’t want to give the impression that these accommodation providers have overlooked such an important topic.
In fact, there’s long been a thriving market for ‘eco-accommodation’. Hotel chains have introduced practices and made material changes to reduce their carbon footprint despite the cost.
However, the broader industry lacked a structured and standardized means of quantifying this. When it comes to writing a report for, say, CSRD compliance, businesses will need to know exactly how this impacts their climate goals.
Thankfully, the market is responding with tangible solutions that will make meeting regulatory obligations much easier. In turn, hotels will attract more climate-conscious business travelers. And, of course, this has a positive impact on the environment.
That’s a win-win-win for all involved parties.
Another win-win to consider is the AirPlus Global Newsletter, where we share the latest news, trends and insights into corproate payment and travel.
Banner photo by Pixabay from Pexels
[1] Corporations Increase Demand for Hotel Sustainability Data | BusinessTravelNews.com
[2] AirPlus reveals business travel trends for 2023 | AirPlus.com
[3] The current state of sustainable corporate travel | HRS.com
[5] Hospitality statistics | HotelTechReport.com
[7] Green stay knowledge hub | HRS.com
[8] Travel sustainable | Sustainability.Booking.om