Having a strong environmental, social and governance (ESG) strategy has become essential for hospitality. While the policies that a hotel enacts must pervade all operations and the corporate company, one particular area that presents challenges is the procurement department, wherein the latest explainer article from Amazon Business addresses three of these as well as three top tactics for more sustainable purchasing.
This deserves a second look because procurement is not just about cost controls and labor efficiencies with strategic and tail spend. Yes, those will always be the number one and two priorities, but realigning brand standards to favor more sustainable suppliers and products could work to reposition a hotel for downstream revenue benefits. These include justifying higher room rates, encouraging more guest spend in F&B or spa, and giving eco-conscious guests a non-price reason to book with you over the competition.
Why Sustainability Must Be Visible
The pithy phrase that I use as a heuristic to denote this emotional relationship between guest-facing ESG efforts and revenue growth is ‘going green to be seen’. The critical modifier to never forget here is ‘guest-facing’ where the goal is more sustainable programs that can also be used as powerful marketing tools.
Sure, there are other actions that are visible to the onsite guest like replacing single-use bathroom amenities with dispensers, deploying a fancy, hyper-efficient room thermostat or putting a sign in the washroom saying you care about the environment and asking guests to reuse towels. But because every other hotel is doing this, guests are habituated to their presence, and they no longer have an emotional impact. More is needed.
The issue herein is that many of the most effective ways to attain greater energy or utility efficiency, reduce food waste and lower carbon efficiencies are actions that occur behind-the-scenes – better food waste programs, water recycling systems, renewable energy credits (RECs) and so on. These ‘green’ actions aren’t necessarily ‘seen’ by the average guest who browses the website prior to booking (leisure or otherwise) or walks the premises after arrival.
Hotels are doing a great job in promoting these furniture, fixtures and equipment (FF&E) and capital-intensive efforts with well-illustrated sustainability webpages, press releases and enrollment in various certification programs. But because of their inherent invisibility, the ability of these activities to shift the odds in favor of securing a reservation is miniscule compared to the service quality, the money shot of the pool used as the website’s hero image, some titillating images of dishes from the restaurant, great onsite reviews, having a dynamic booking engine, delivering personalized offers, having fantastic amenities and a host of other factors.
A guest may land on the sustainability webpage or find out about the hotel from newer search tools like Google’s green seal, but does this emotionally motivate a traveler to book one property versus the other ahead of price, location, brand loyalty or other drivers? Yes, groups and corporate travel planners are now demanding ESG standards be met during the RFP process, but these are often downstream in the negotiations after location, incentives, event spaces availability and others.
How Procurement Helps Make Sustainability Sellable
From the above, the word that summarizes the current status of many ESG strategies is ‘checklist’. There’s a multi-year plan in place with goals, KPIs or OKRs, then a taskforce of very intelligent and specialized hoteliers go about executing upon that plan, checking off each mission as it is accomplished.
But people don’t book hotels based on checklists; they want experiences (within what they can afford, of course).
In this sense, procurement can act as a prominent tool to help make a hotel’s sustainability efforts more visible to the guest, both before a booking occurs as well as onsite to reinforce ancillary spend or raise post-stay engagement. Yes, there are other ways to ‘go green to be seen’ like furbishing the rooms and public spaces with reupholstered, restored hard goods or using low-embodied-carbon materials, but procurement nevertheless plays a role in the front-of-house storytelling that drives a great guest experience.
Let’s give some examples for various operations to demonstrate this relationship:
Bathrooms: Looking beyond dispensers can mean bulk sourcing from local suppliers or eco-friendly vendors for towels, robes, cosmetics, soaps, vanity sets or anything else that isn’t bolted down, with the key being that together these efforts amount to a highly visible area of the story for every overnight stay.
Bedrooms: Hypoallergenic mattresses have been a worthy room feature for many years, but much like in the bathroom, rethinking any replaceable item – linens being the first to mind – with a green alternative can help to sell a room as fully sustainable.
Restaurant: It never fails to endear guests by telling a locavore tale through ingredient sourcing that aims to minimize food miles or even goes as far as abiding by a ‘kilometer zero’ philosophy like some Michelin hotspots are now touting, wherein these efforts often lead to a true win-win by providing healthier ingredients overall while still curbing transportation carbon emissions.
Spa: Similar to F&B, sourcing from local purveyors supports the community at large while oftentimes these suppliers for items like cosmetics, oils or fragrances will use ingredients that are indigenous to the area, which can reinforce the spa’s theme and the hotel’s ability to market a differentiated wellness experience.
As you can see and to close, to avoid the checklist challenge and imbue some emotionality into your hotel’s sustainability efforts, procurement can play a major role in helping communicate this story to guests in a more conspicuous and effective manner.
