The Confluence of Sustainability and Profitability: A New Paradigm for Independent Hotels

Words from the 2023 Boutique Hotel Investment Conference by BLLA

In an era marked by accelerated change and unpredictability, staying ahead in any industry calls for adaptability and foresight. The recent BLLA conference on the investment advantages of small-scale operational adaptability spotlighted the criticality of these traits, particularly in sectors beyond the realms of technology. Independent brands, characterized by their operational flexibility, stand in a unique position to lead the way in sustainability, a commitment increasingly interlinked with profitability and long-term survival.

The Looming Threat of Climate Change

Climate change, a looming crisis detailed in CitizenM‘s sustainability report, places additional emphasis on the need for urgent action. The report states, “Climate change is one of the biggest threats our world is facing. Transparency regarding climate-related risks and opportunities will be critical to maintaining the trust of stakeholders.”

The sentiment resonates strongly within the hospitality sector, where independent hotels find themselves well-positioned to make transformative changes. Larger corporations often struggle with bureaucratic layers, whereas independent brands can execute decisions more swiftly, an advantage that could prove decisive in adapting to a rapidly evolving global climate.

Unifying Stakeholder Interests

In a dialogue between Marissa Ballan of citizenM Hotels and Benedetta Cassinelli of Considerate Group, the importance of aligning stakeholder interests was highlighted. The hospitality sector comprises a plethora of stakeholders — from brand owners to equity investors — each with divergent interests and perceptions of value.

“Sustainability is a lens through which we can align the interests of these diverse stakeholders,” said Cassinelli. “It’s about making them understand the shared value and benefits that investing in sustainability can bring to the table.”

Real Estate and Environmental Responsibility

Real estate, responsible for a substantial share of global emissions, is integral to the hospitality industry. Marissa Ballan emphasized that as both brand and real estate owner, CitizenM is uniquely situated to implement significant changes. “As real estate developers and owners, making these changes isn’t just the ethical thing to do; it’s a critical part of risk mitigation and long-term profitability.”

Investments that Pay Off

Sustainability is not merely an ethical choice; it’s an economically viable one. In the short term, tools like waste stream monitoring and resource consumption data can yield immediate financial benefits. “The capital return on these types of investments is often realized very quickly,” said Cassinelli.

The long-term benefits are equally substantial. As Ballan pointed out, “Reducing energy consumption isn’t just good for the planet; it’s good for the balance sheet.”

Aligning Sustainability and Profitability

Boutique hotel owners like Raul Leal of SH Hotels & Resorts and Andrew Zobler of Sydell Group echo this sentiment. Their companies are actively working toward achieving net-zero status by restructuring operations, thereby showcasing that commitment to sustainability and profitability can go hand in hand.

The Future is Now

Climate change forces the hand of every industry to reconsider its practices. For the hospitality sector, it’s a wake-up call that carries both a threat and an opportunity. The agility of independent hotels makes them ideal candidates to not only adapt but lead the way in marrying sustainability and profitability. Doing so won’t just be beneficial in the short term; it will secure the long-term future and relevance of these brands in a world that increasingly demands both.

Further Study

You can watch all panel sessions from the 2023 Boutique Hotel Investment Conference by BLLA on-demand here. All BLLA members can watch the sessions in the portal by logging in here. Continue the conversation on October 10 & 11, 2023 in California for the Boutique Hotel Owners Conference by BLLA.