Green Building Taking Off in Hospitality, Retail Industries

Green building is taking off in the hospitality and retail industries, says McGraw Hill in a new study.

This year, retail owners that are building green for over half of their projects rose to 38%, up from just 18% in 2011. That’s expected to rise to 52% by 2015.

The percentage is higher for the hotel industry where 48% are using green practices for over half their projects, compared to 28% in 2011. That’s expected to rise to 64% in 2015.

Green building projects are defined as either meeting LEED or another recognized green building standard, or one that is energy-efficient, water-efficient, and improves indoor air quality and/or engages in material resource conservation. 

Two-thirds of retail owners (65%) and 73% of hotel owners say they use green operations and maintenance practices.

What’s driving this trend? Strong business benefits, such as:

• Annual operating cost reductions:  8% for retailers. 1% for hotel owners
• Energy use reductions: 15% for both retail and hospitality 
• Asset value increases: 7% for retailers,  11% for hotels
• ROI increases: 8% for retailers, 14% for hotels

"Green building has taken such hold in the industry that even sectors with unique challenges, such as retail and hospitality, are making stronger investments," says Harvey Bernstein, vice president at McGraw Hill Construction. "Clearly the benefits that owners are reporting are key reasons for their green building investments, and as they find better ways to measure those impacts and quantify the value to their sales velocity and to the well-being of their staff, customers and guests, we expect even more rapid engagement in green."

While lower operating costs are the most frequently reported reason for going green (66% of retailers, 73% of hotels), other factors are also considered very important in their decision-making process:

• Utility rebates
• Protecting/enhancing brand – just as important as costs for hotels
• Improving ROI

Besides business issues, 44% of retailers and 50% of hoteliers say environmental health and the benefits to employees and customers are also important.

Challenges to greater investments in green buildings continue to be the higher upfront costs, budgeting challenges and getting corporate leadership buy-in. 

Energy efficiency is still a key goal, recycling and waste management are also critically important. A strong majority say they require green practices from suppliers, especially on waste handling (75%). 

This month, 23 global hotel companies joined to develop a standard way to measure carbon emissions – the Hotel Carbon Measurement Initiative. Another initiative seeks to eliminate bottled water and some, like Marriott, have electric car charging stations.

Here’s the report, "Green Retail and Hospitality SmartMarket Report: Capitalizing on the Growth in Green Building Investments":