Developing Measures for Environmental Sustainability in Hotels: An Exploratory Study

Abstract

Hoteliers? efforts to improve the environmental sustainability of their operations would be promoted by having a consistent industry-wide measure for benchmarking current operations and tracking the effect of environmental sustainability initiatives. This type of measure can also assist external stakeholders, such as the hotel guests and regulatory entities, to gauge hotels? environmental sustainability efforts. This report presents the results of an exploratory study that develops such a measure, using resource consumption records of 984 U.S. hotels over a period of eight years. The measure is based on an analysis of resource consumption?related expenses found in these hotels? year-end operating statements, for electricity, water and sewer, maintenance other expenses, and laundry, linen, and supplies for both the rooms and for food and beverage services. Using a multivariate data analysis technique called exploratory factor analysis, the measure developed in the study consists of two parts: an operating factor that comprises large weights from electricity, water and sewer, and maintenance expenses, and a behavioral factor, which is largely driven by laundry, linen, and supplies for both rooms and F&B operations. In general, costs found in the operating factor are under management control, but the costs in the behavioral factor are subject to guests? activities. By normalizing the average of each of these two factors at zero, hotels that score above zero on each factor are spending more than other hotels, and those with a score below zero are more efficient than others. These factors can be compared according to various hotel characteristics, such as chain segment, the involvement of a third-party professional management company in the operating structure, location (both in terms of the degree of urbanization and climate zone), and whether the hotel offers F&B service. For instance, the above-average costs of providing F&B are clearly depicted in these measurements (as compared with limited-service operations).

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