Studies have shown that consumers are willing to pay for sustainable options, but clarity and trust issues hinder this willingness. In fact, there is a significant disconnect between how brands perceive their sustainability efforts and what consumers actually believe. Unfortunately, this means that sustainability claims often leave consumers confused, frustrated, and skeptical about their authenticity. With the growing importance of sustainability certifications and the looming impact of evolving global regulations, technology will play a pivotal role in helping hotels not only address these challenges but also turn sustainability into a competitive advantage. To learn more about the critical intersection of sustainability, technology and hospitality, Hospitality Technology sat down with Alina Arnelle, Chief Sustainability Officer at BeCause.
Which consumer group is most willing to pay for sustainable hotel stays, and why?
In terms of demographics, younger consumers tend to be more sustainably minded. According to a survey of 9,000 adults from the US, UK, Germany, Greater China, the UAE, and Australia by InterContinental Hotel Group (IHG), 69% of those aged 18 to 24 want to be more environmentally and socially conscious about their travels – compared with just 48% of those aged 55 and over. This is partly because Gen Z’s lives are set against a backdrop of climate change, so they prioritize sustainability and choose brands that make responsible choices. However, sustainable travel and accommodation options are increasingly desirable across all generations. The IHG survey revealed that consumers will spend an average of 31% more per night when staying at hotels known for their responsible operations.
What challenges do hoteliers face in engaging sustainability-conscious consumers?
Hoteliers have long lacked efficient ways to manage the data needed to market their eco-credentials to sustainably minded consumers. They gather it manually via spreadsheets, surveys, and emails, covering a range of important metrics such as carbon emissions, energy consumption, water usage, and waste production.
These outdated methods are holding hotels back. They are inefficient, cumbersome, and time-consuming. They are also impractical, especially for understaffed properties that do not have dedicated sustainability managers. Moreover, this approach is prone to errors, which can undermine consumer trust in the authenticity of claims. It also keeps data siloed, with valuable information scattered across different stakeholders’ inboxes. As a result, there is no efficient way to manually consolidate and cross-reference all the data.
Financially, these complex, fragmented, and labor-intensive methods used for sustainability data reporting are not working, even though hotels spend $8 billion annually on them. When attracting green consumers, hotels are missing out on annual revenue worth $13 billion. Altogether, this means ineffective sustainability management costs hotels $21 billion annually.
How can hoteliers address these challenges and enhance transparency? What role does technology play?
Hoteliers must understand that data plays a crucial role in advancing sustainability efforts. After all, they cannot manage what they do not measure. They must know exactly where they are before they can gain green certification, market to sustainability-minded consumers or innovate to improve their credentials.
Automating sustainability data collection and monitoring processes is essential to addressing these challenges, promoting industry-wide transparency, and gaining a competitive advantage. Technology is critical to providing the tools for effective and efficient data management.
Thanks to AI, technology can digitally streamline a company’s sustainability data and communicate metrics to various stakeholders. It can ensure regulatory compliance, help attract green consumers and catalyze better ESG outcomes by enabling hoteliers to identify their properties’ strengths and weaknesses and optimize costs, asset utilization, and energy performance.
Businesses in the travel and hospitality sector need an AI-driven platform that centralizes sustainability data management, and ours was explicitly designed to do that. It modernizes collaboration among all the providers, distributors, and certification entities, ensuring accurate and reliable sustainability data for over 22,000 hotels and online travel agencies and marketplaces worldwide.
How crucial are sustainability certifications in building consumer trust and transparency in the hospitality industry?
Sustainability certifications are crucial as they provide a universal language that consumers, travel, and hospitality professionals can understand. They are also vital to building consumer trust, which is a significant and growing issue.
Many consumers struggle to discern which sustainability claims are trustworthy. Booking.com’s recent Sustainable Travel Report highlights that nearly 40% of travelers find it challenging to identify genuinely sustainable accommodations. This is where certifications play a crucial role. The report also reveals that 67% of consumers want standardized sustainability certifications or labels to help them confidently choose sustainable options. By offering independent validation of claims, certifications help close the trust gap.
What trends do you see in sustainability data management and compliance, and how should companies prepare?
The most significant trend is around evolving legislation. We are rapidly moving to a world in which it will be mandatory for all businesses to disclose their impacts on both people and the planet, and this is already the case in some regions, like the EU.
Regulatory compliance is becoming more complicated, and this year will be a watershed for sustainability disclosure regulation. In March 2024, the United States Securities and Exchange Commission finally ruled in favor of climate change reporting regulations for publicly listed companies. Meanwhile, in the European Union, large enterprises are preparing to release their first reports under the EU’s Corporate Sustainability Reporting Directive. New Zealand, Australia, and Canada all have similar reporting rules, either on the table or approved.
The best way for companies to prepare for all these changes is to automate their sustainability data management. Using a platform that does more than collect data and can create audit-ready reports makes sense. This is especially relevant for what is known as ‘double materiality,’ a requirement of many reporting frameworks that means companies must report on both their direct and indirect impacts.
Collecting, processing, and reporting all this data without the help of the right sustainability technology will become too time-consuming and costly. To future-proof their businesses, hotels need to invest in the right technology right now.
About the Alina Arnelle, Chief Sustainability Officer, BeCause
As the Chief Sustainability Officer, Alina’s primary responsibility is to contribute to and devise the company’s strategy to incorporate the latest sustainability trends and ensure the company is up to speed with relevant industry-specific developments. Additionally, Alina’s key role is to proactively develop specifications and direct the development of the BeCause platform regarding sustainability-related topics.
