Sustainable Hospitality Insights | |
|
Launch of Con-Serve™ 2.0:
Redefining ESG Data Management in Hospitality
| |
|
In September, we proudly launched Con-Serve™ 2.0, the enhanced version of our cutting-edge ESG data platform designed specifically for the hospitality industry. Developed in partnership with Deepki, leaders in ESG real estate technology, Con-Serve™ 2.0 is set to transform how the hospitality sector approaches ESG data management and reporting.
To mark this launch, we hosted a series of exclusive webinars, showcasing Con-Serve™ 2.0’s enhanced functionalities. If you missed these sessions, a recording is available here. Additionally, we collaborated with our long-term partners, the World Sustainable Hospitality Alliance (WSHA), to deliver a webinar highlighting to their members how Con-Serve™’s capabilities support data management best practice.
Over the past two months, our team has presented Con-Serve™ 2.0 at premier industry events, including the Future Hospitality Summit (FHS World) and Responsible Hoteliers Summit in Dubai, along with the Independent Hotel Show in London and the World Sustainable Hospitality Alliance Summit in Texas.
In a growing field of ESG data platforms, Con-Serve™ 2.0 stands out by uniquely integrating real estate technology within a hospitality-specific platform, allowing for detailed, asset-level data capture. This tailored approach meets the distinct needs of the hospitality sector, enabling more effective and informed ESG management. For further information or to schedule an online Con-Serve™ demo, please contact Lizzy Coates, Senior Sustainability Consultant, LizzyC@considerategroup.com
| |
|
Is there evidence of a ‘Green Premium’
in the hospitality Sector?
| |
|
We have been asked by asset management clients if we can evidence the relationship between ‘green investment’ and improved return on investment (RoI) over a typical period of ownership for assets in the hospitality sector. The avoidance of a brown discount (and/or avoidance of the risk of being left holding a stranded asset) is far clearer, but specifically: Can we point to evidence for a ‘green premium’ in the hospitality sector?
The short answer is that we cannot offer clear, quantitative guidance on a direct correlation between ££/$$/€€ of green investment and RoI today. At least in part, this is due to slow M&A markets over 2023/24, coupled with hospitality assets being heterogeneous (star rating, size, breadth of facility, historic vs new-build, urban vs rural, resorts), with diverse characteristics, meaning that effective reference points in the sector remain few and far between.
However, I will share our thoughts on the justification for a ‘green premium’ and the qualitative support that exists today. As the quantitative evidence base builds, we believe that this will undoubtedly lead to a clear indication of the existence of a green premium – it is just a matter of time and the sufficiency of datapoints.
| |
|
Our argument to this is as follows:
1. The existence of a ‘green premium’ for office is more readily identifiable than for hospitality because it is:
a) more liquid
b) more homogeneous
However, rationally, if a ‘green premium’ applies to office, it should also apply to hospitality – it is just a question of estabslishing the evidence base.
2. The qualitative argument for a ‘green premium’ in hospitality
a) At its core, sustainability in the hospitality sector is about managing the long-term value of an asset – ensuring that the asset is well-maintained, thereby reducing operational costs and ensuring that it is readily saleable at the end of its period of ownership (mitigating the risk of the asset becoming stranded).
b) For the investor, investment in sustainability offers the prospect of better long-term operating margins through a reduction in operating costs. Taken together with the potential for an expanded acquiror audience for green assets at exit, this helps to support the prospect of elevated exit multiples, to provide a double whammy (improved profits + increased multiple) of an uplift on exit. Underpinnings to this uplift include:
| |
|
|
|
i. Mitigation of climate and environmental risks
ii. Regulatory compliance and management of future regulatory risk
iii. Enhancement of commercial returns through margin enhancement and maximisation of the potential field of bidders on exit
| | | |
|
iv. Avoidance of commercial risk of brown/stranded assets
v. Qualification for green loans (improved debt terms)
c) Certain PE funds/asset managers have value-add/turnaround strategies, based around targeting under-ESG-invested hospitality assets, accelerating investment, and seeking green certification ahead of on-sale on preferential terms (improved profits + multiple uplift).
d) But a specific green premium is hard to evidence in a slow M&A market.
3. PACE Dimensions – Considerate Group recently sat in on a high-level presentation from PACE that starts to provide the evidence base and business case for investment in sustainability for owners, operators, and brands. This highlights that certain cohorts of hotel guest are prepared to pay a premium for ‘green’ hotel stays that resonate with their own core convictions i.e. hotels can charge more for being ‘green’.
4. We have supported multiple clients to qualify for green bonds / finance, where LEED and BREEAM construction standards, as well as BREEAM-in-USE (BiU) operational assessments at Good/Very Good levels are critical to success. Although we have not been involved, COVIVIO Hotels represents a recent public example of such a green finance framework, and its latest bond issuance highlights that LEED, BREEAM and CRREM decarbonisation pathways are key to accessing green finance
a) COVIVIO Hotels €500m green bond issuance 2033
b) Green Financing Framework
5. Other evidence we have identified includes
a) Hotel investors are focused on upgrading older properties amid a challenging debt market
b) The impact of sustainability certifications on performance and competitive action in hotels – Simone Bianco, Shaniel Bernard, Manisha Singal
c) Environmental certification and hotel market value – Shaniel Bernard, Juan Luis Nicolau
| |
The evidence for a ‘green premium’ is now visible in office data and will, we believe, also become visible in hospitality data once M&A volumes pick-up again. The lack of quantitative evidence for a ‘green premium’ in hospitality today is rather more due to the fact that there is a lack of data points, than the evidence being equivocal. | |
Energy Assessment Project
Luxury hotel group
| |
|
We’re delighted to announce another successful collaboration with one of our esteemed clients! Considerate Group is pleased to share that we have recently completed a short-term project commissioned by the asset management firm of a leading hotel brand. This project involved the delivery of a series of nine comprehensive Energy Assessments, conducted across a diverse range of ultra-luxury properties spanning the USA, UK, France, and Italy.
Through our detailed understanding of each property, with a variety of restaurant and spa operations and unique site-specific challenges, we tailored our recommendations to be actionable and aligned with the operational and technical needs of each site.
We carried out thorough analysis, including detailed site visits, providing our clients with insight and recommendations for capital expenditure over the next 1-5 years. Recommendations were accompanied by detailed cost estimations and projections of annual energy savings, empowering our client to make informed strategic decisions.
Thanks to the support of the headquarters and the proactive responsiveness of each hotel in providing necessary data, we were able to provide detailed insights into each property’s energy use and emissions when compiling the individual property reports. Additionally, a summary report was created to provide a quick overview of the energy use, emissions and efficiency recommendations across all nine properties.
If you’re interested in enhancing your sustainability strategy and maximizing energy efficiency while optimising your financial resources, we invite you to reach out to Lizzy Coates, Senior Sustainability Consultant, LizzyC@considerategroup.com. Let’s work together to create a greener, more sustainable future.
|  | |
|
World Sustainable Hospitality Alliance (WSHA) annual Mainstreaming Net Positive Hospitality Summit (28-30 October) at The Hospitality Show in San Antonio, Texas
This was the WSHA’s first event in the US, hosting a conference within a conference. The main Hospitality Show included an exhibition as well as a conference attended by some 5,000 mainly US attendees. Integrated within the broader show, the WSHA attracted almost 100 senior leaders across the hospitality industry, with a clear American flavour to the summit. Considerate led one of the primary discussion topics, with a presentation entitled “2025 and beyond…. utilising metrics and shaping data best practice in the hospitality sector”, focused around ESG data platforms and data best practice. This led ion to a panel session on the topic, with expert insight from Megan Brumagim, VP, Upscale Brands & CSO at Choice Hotels (international hotel franchisor), Ryan L. Butler, Corporate Director, Sustainability + Energy at PM Hotel Group (US hotel operator), Marianne Balfe, VP of Sustainability at Highgate (US/European hotel owner and operator) and JoAnna Abrams, CEO at MindClick (intelligence and consultancy on sustainable products and services). Other major topics discussed centred around consolidation of certifications for the hospitality sector (positioned alongside verification and accreditation), led by the GSTC as well as a panel discussion on Global Synergy for Sustainable Hospitality: Leading Voices from China, Asia-Pacific, the US, Middle East.
FHS World, Dubai 30 September-2 October
The Future Hospitality Summit (FHS World), located at Jumeirah Dubai, attracted a senior mix of c 1,500 owners, investors, brands and operators, as well as service providers. The conference had a clear focus on the Middle East, but also included perspectives from Africa, Asia Pacific and Europe. Amongst attendees, there was strong representation from the UAE, but also solid attendance from Saudi Arabia and the giga-projects. Considerate played a key role in helping to curate the sustainability strand of the conference, identifying speakers and panellists, including Radhika Arapally from Sustainability Kiosk, Considerate’s UAE partner firm. Considerate delivered a presentation on the Summit Stage on “Decarbonisation and the Pathway to Net Zero. Start with the data! Best practice in data measurement”, helping to build awareness of the September launch of Con-Serve™ 2.0.
Responsible Hoteliers Summit, Dubai 3 October
The day following FHS World, Sustainability Kiosk, Considerate’s UAE partner, held a summit based in Anantara, the Palm. This attracted more than 100 GMs, Heads of Engineering, facilities management, and sustainability teams for principally Dubai-based hotels (including Minor Hotels, First Group, Rove, Millennium, FIVE, Emaar, Jumeirah etc.), together with Abu Dhabi groups. It was a very hands-on event, with practical sessions on identifying and implementing sustainability solutions, together with presentations from a range of service providers. To great interest, Considerate presented Con-Serve™, powered by Deepki, its hospitality ESG data intelligence platform. The summit was an ideal opportunity to talk to hotel companies face-to-face and cement our relationship with Sustainability Kiosk.
GRI Europe, Paris 10-11 September
As a membership club for real estate investors, the GRI Club attracts a high calibre of senior representation from across the UK and European real estate investment community. Animal spirits have been dampened over the course of 2023/4 by stubborn inflation, high interest rates on debt, the cost-of-living crisis and a consequent lull in M&A. However, at GRI Europe, the club’s flagship event at the InterCon, Paris Le Grand, there was a belief that sentiment was starting to change. With interest rates likely to continue falling and, with uncertainty around the US election out of the way in 2024, H125 should be a year when transactions restart. There were a range of sustainability sessions over the two days, where Considerate shared its views on the necessity of collecting asset-level data to support decarbonization and net zero strategies, to reduce operating costs and ensure regulatory compliance.
| | |
|
|
Email: Info@considerategroup.com
Office: +44 20 3865 2052
5 Merchant Square, London W2 1AY
| | | | | | |
