News Brief

Cornell Reports No Revenue Boost for Green Hotels

Eco-certified hotels do not bring in more booking revenue, but researchers say it’s safe to go green, if only for the operational benefits.

Proximity Hotel in Greensboro, North Carolina, was the first hotel to achieve LEED Platinum. The green hotel trend doesn't appear to affect revenues directly, according to new research.

Photo is in the public domain.

A report published by the Cornell Center for Hospitality Research has found that sustainability certifications don’t allow hotels to charge higher rates or increase bookings—but they also don’t hurt. Howard G. Chong and Rohit Verma, authors of the study, say that their findings leave the door open for hotels to pursue green certifications, even if operational savings are currently the only financial benefit.

Researchers used information from Sabre’s Global Distribution System and Travelocity.com websites to compare the average daily rates (ADR) of 6,000 conventional hotels to 3,000 similar hotels flagged as “eco-certified.” A small green leaf on these sites marks hotels that have earned at least one of a dozen of international sustainability certifications, including LEED and Energy Star.

On average, this marketing had a neutral effect: the going rates and number of bookings were neither higher nor lower for the eco-certified hotels. Even though the study did not gather data on reduced energy costs, the authors argue that those who have hesitated to implement green programs with demonstrated operational savings should be encouraged by the fact that widely advertised green status isn’t hurting booking revenues.

“Though revenues overall may not have risen, cost savings from sustainability programs are still real benefits to the bottom line,” according to the report. “The pragmatist should see this as a green light to continue measured improvements in hotel environmental performance.” The report does not address the extent to which hotels realize other financial benefits from green certifications, such as tax or development incentives or increased asset values.

 

Published December 2, 2013 Permalink

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