Future-proofing the Hospitality Industry with Sustainability as a Revenue Strategy
The recent Asia Sustainable Travel (AST) Forum in Subic Bay, Philippines, served as a platform for discussing sustainability and its profound impact on both the environment and business profitability. Co-hosted by the Hospitality Alliance of Subic Bay Freeport Zone, the forum brought together industry leaders to explore how sustainability can drive profitability and long-term success.
Key Insights from the AST Forum - Subic Bay
Susan Santos de Cardenas, Southeast Asia Partner and Representative for Green Destinations, was the guest speaker at the forum. A pioneer in sustainable hospitality development and management across Asia, De Cardenas presented data and insights on the commercial benefits of sustainable practices.
The Growing Demand for Sustainable Travel
De Cardenas highlighted the increasing consumer demand for sustainable travel options. Referring to the report from Booking.com in 2023, she noted that:
74% of travelers feel an urgent need to prioritize sustainable decisions to save the planet for future generations
80% of travelers confirm the importance of traveling sustainably
75% seek authentic experiences representative of local culture
66% aim to leave destinations better than they found them
69% are interested in understanding why specific options are recognized as more sustainable
These statistics signify a seismic shift in consumer preferences, offering a unique opportunity for the hospitality industry. By integrating sustainability into their business models, hotels and tourism operators can attract a rapidly growing market of eco-conscious travelers, thereby boosting their revenue.
The Market is Ready for Sustainable Investment
De Cardenas also shared that the market is increasingly prepared for sustainable investment. She cited reports from Morgan Stanley, the Global Sustainable Investment Alliance, the World Economic Forum, HSBC, and Intesa Sanpaolo, indicating that:
95% of asset owners worldwide already include or consider integrating sustainable investment in their portfolios
57% envision a future when they will only allocate to managers with a formal ESG (Environmental, Social, and Governance) approach
Investments in sustainability have grown by 15% over the past two years. They now account for 36% of all professionally managed assets, with assets under management reaching $35.3 trillion.
These statistics demonstrate the financial viability of sustainability. Hotels that adopt sustainable practices not only contribute to environmental preservation but also position themselves as attractive investment opportunities.
Screenshots from Susan Santos De Cardenas’ presentation
Revenue Management through Sustainability
De Cardenas emphasized that sustainability can be a powerful tool for revenue management. While revenue management might initially appear unrelated to environmental issues, integrating sustainability can significantly enhance profit margins by meeting the growing demand for eco-friendly travel options.
"Hotels that become more efficient in energy use, water consumption, and waste management—all of which are the foundation for a clean environment—end up saving substantial amounts of money. These cost savings should ideally trickle down to benefit guests as well," explains De Cardenas.
Tools for Analyzing and Implementing Sustainability
"Green Destinations program offers comprehensive tools to support your hotel's revenue management strategy from a sustainability perspective," said De Cardenas. "We help you define sustainability goals, adopt sustainable practices, and provide the necessary resources and guidance every step of the way."
From assessments like the Good Travel Scan and Climate Action Scan to top-level sustainability certification through the Good Travel Seal, hotels can achieve varying degrees of compliance with GSTC (Global Sustainable Tourism Council) criteria*. Level 1 compliance requires 36% alignment with GSTC criteria, Level 2 requires 67%, and Level 3 demands full compliance.
*GSTC Criteria are the standards set by GSTC to ensure that tourism practices are environmentally friendly, socially equitable, and economically viable. More information can be found here.
De Cardenas also shared the following benefits of sustainability certification programs:
Benefits for Destinations and DMOs
Protecting market niches: Sustainability helps governments safeguard their market niches as ecotourism or sustainable tourism destinations, especially against the threat of greenwashing.
Raising standards: Sustainable practices elevate standards in health, safety, environment, and social stability.
Lowering regulatory costs: Environmental protection through sustainability requires fewer regulatory expenses while providing economic benefits to communities.
Reducing poverty: Sustainable tourism initiatives can provide economic benefits and help alleviate poverty, especially in rural areas.
Benefits for Certified Businesses
Operational improvements: The certification process itself is educational, offering travel businesses with knowledge to make their operations more environmentally friendly.
Cost reductions: During the certification process, businesses take on initiatives that would reduce operating costs related to water, electricity, and fossil fuels without compromising service quality.
Access to resources: Certified enterprises find it easier to obtain technical assistance and financing for implementing new technologies.
Marketing advantage: Certification attracts environmentally and socially conscious visitors, a rapidly growing market. Certification also ensures that sustainable actions and efforts are publicly communicated, adding credibility and integrity to the establishment.
Case Studies
Grand Palladium Riviera Resort and Spa, Mexico
De Cardenas shared a compelling case study from the Grand Palladium Riviera Resort and Spa in Mexico. Remarkably, only 13% of their 200-hectare property is developed, with 87% dedicated to marine and coastal biodiversity conservation. According to Earth Check, Palladium Hotel Group has saved US$10 million by focusing on sustainability.
"This commitment to sustainability has saved the Palladium Hotel Group $10 million, thanks to practical measures like watering plants at night and recycling 80% of their water," shared De Cardenas.
Screenshot from De Cardenas’ presentation
Megaworld Hotels and Resorts (MHR)
This largest homegrown hotel operator in the Philippines has been implementing several sustainability initiatives, such as collaborating with SMEs and supporting local communities. One notable initiative is the Sampaguita Project, which is reviving the sampaguita—the national flower of the Philippines. The project involves the introduction of a Sampaguita-inspired menu and the creation of a signature Sampaguita scent used across their 12 properties.
At the AST Forum in Manila in April 2024, Cleofe Albiso, Managing Director of MHR, revealed that the Sampaguita menu has generated over 2.5 million Philippine pesos (or $42,810) in revenue from food and beverage sales since its launch in September 2023.
Screenshots from Cleofe Albiso’s presentation
Read more about their initiatives here.
Strategies for Future-proofing Through Sustainability
To effectively integrate sustainability into your revenue management strategy, consider the following steps:
Conduct sustainability assessments: Utilize tools like the Good Travel Scan and Climate Action Scan to assess your current practices and identify areas for improvement.
Set clear goals: Define specific, measurable sustainability goals that align with GSTC criteria.
Invest in sustainable technologies: Focus on energy-efficient appliances, renewable energy sources, and water conservation systems to reduce operational costs.
Gain a certification: Validate your sustainability efforts and attract eco-conscious travelers.
Engage stakeholders: Involve staff, guests, and the local community in your sustainability initiatives to cultivate and promote a culture of environmental responsibility.
By adopting these strategies, hospitality businesses can enhance their profitability and at the same time contribute to a more sustainable and resilient industry.
Venue Spotlight: The Garden by Pacific Ace
The AST Forum Subic Bay took place at The Garden by Pacific Ace. Virginia S. Dio, President of Pacific Ace Subic Bay Corporation which owns the property, welcomed the attendees with an inspiring speech highlighting the venue's commitment to eco-innovation.
"Our venue is enveloped in lush greenery, providing a serene and invigorating environment. This is not by chance but by design. Our commitment to sustainability has earned us the proud title of eco-innovation company within the Subic Bay Freeport Zone," said Dio.
The venue also features a rooftop restaurant serving Filipino dishes, with an onsite garden that grows vegetables and herbs for the restaurant. Additionally, the co-working space filled with indoor plants provides an ideal environment for productive work.
"Our commitment to sustainability extends beyond our physical environment. It is ingrained in our corporate culture and operations. We continually strive to implement eco-friendly practices, from energy-efficient systems to waste reduction initiatives. Hosting the Hospitality Alliance of SBFZ in such a green and sustainable venue underscores our shared values and inspires a better, more sustainable future," added Dio.
We extend our gratitude to our sponsors for the AST Forum in Subic Bay:
Le Charme Suites for offering us cozy accommodation during our stay in Subic. This hotel features spacious guestrooms equipped with in-room bike racks and a water dispenser on every floor.
TravelThru for providing us with reliable and comfortable transportion service to and from Subic Bay. TravelThru is a premium pre-booking airport transportation and car hire service available in 700 key cities worldwide.
