HOSPITALITY

Sustainability – challenge or opportunity?

We are better placed than many by being able to demonstrate our commitment to CSR

D

espite much discussion in recent years, confusion and dilemma continue to exist within the

hospitality industry in relation to sustainability. One problem, of course, is the lack of an acknowledged and universal definition of what is meant by

'sustainable'. As a result, businesses often adopt what they believe to be correct initiatives, but very rarely are these connected to the overall business goals of the organisation. Ten years ago the term 'environment'

Hoteliers in the capital could see further growth in 2010 and 2011

London hotels continue recovery

PwC research shows capital's resilience to downturn

had a limited definition in the minds of most people. Today the word has far greater meaning, with it being used to describe various aspects related to climate change, pollution, sustainable tourism, food procurement, waste management and use of resources. Most importantly, environmental considerations have now moved into the mainstream of social and political debate. These concerns have brought our industry into sharp focus, for

PHILIPPE ROSSITER is CEO of the Insti- tute of Hospitality (IoH). Leisure Opportunities is a member benefit of the IoH, for your free copy call 01462 471932

By Tom Walker

Further evidence has been revealed to suggest that London hotels are recovering quicker from the recession than hotels outside the capital. A report on the UK's hospital-

it is both customer and provider of the environment. The big question is how to manage our environmental impact as demand grows against a backdrop of increasing vulnerability. As society becomes more conditioned to its environmental impact, and terms such as 'carbon footprint' become more widely used and understood, our industry will be subjected to even greater levels of scrutiny to ensure that we are acting in an environmentally sound fashion. A number of industry companies are already recognising the need to be a 'good neighbour' by investing in low-carbon building materials and energy-recovery plants, as well as implementing practical waste management policies. While the initial investment may be greater, many see a better long term return for their shareholders through reduced costs, and improved sales derived from customer loyalty based on a strong environmental 'brand'. At a time when Corporate Social Responsibility (CSR) has

become an integral aspect of business strategy in many areas of the economy, no sector is immune from the same drivers of this philosophy. We are, however, better placed than many by being able to demonstrate our commitment to CSR through adopting visible environmentally-conscious modes of operation. Not only will these actions make businesses more attractive to customers, but a more careful and efficient use of resources at our disposal will lead to reduced costs, thereby improving profitability.

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ity industry, published by PricewaterhouseCoopers (PwC), shows that hotels in London have recorded five consecutive months of occupancy growth to January 2010, with occupancy in the final quarter of 2009 reaching 82.5 per cent. Over the course of 2010, PwC predicts that on average, hotel

operators in London should see RevPAR increase by 5.8 per cent with a further 7.8 per cent growth in 2011. Robert Milburn, PwC's

director for UK hospitality and leisure, added that the growth spurt should provide hoteliers with sufficient volume to push up room rates by around 3.5 per cent this year, to give an average rate of nearly £120. He said: "Visibility is limited

but reports of higher levels of transient visitors, more group conference bookings and a return of the business traveller (albeit slow) are all positive."

KPMG has revealed that the number of merger and acquisition (M&A) deals reached a new 10-year low during 2009 as the recession had a sharp impact on the hotel sector. Richard Hathaway, head of

travel, leisure and tourism at the business advisory firm, said that operators and investors are still being affected by challenges in finding available finance.

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Sector reaches 10-year M&A low

Hathaway said: "Prospec-

tive investors will need to develop creative deals that work for them, the banks and other lenders, if they are to entice them in to undertaking deals now." According to a recent study,

some of the world's leading hotel operators are expecting to need US$70bn (£46.2bn) of refinancing over the next five years; US$12bn (£7.9bn) this year alone.

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