Cornell Finds Sustainability Revenue Neutral for Hotels

globeA recent analysis of sales and rates for 9,000 hotels has demonstrated a net neutral effect for the hotel industry's efforts to implement sustainability.

The Cornell study concluded that the hotel industry's fears of losing business due to implementing "green" operations is unfounded. However, on average, hotels also don't see a revenue boost from going green.

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The study, "Hotel Sustainability: Financial Analysis Shines a Cautious Green Light," was published by the Cornell Center for Hospitality Research (CHR) and presented at the 2013 Sustainability Roundtable, at the Cornell School of Hotel Administration.

The analysis was made possible by a database maintained by Sabre Holdings, including Travelocity. 

The study notes that Sabre has created a green "Eco-Certified Hotel" label for hotels that have earned any of a dozen international sustainability certifications.

This green flag appears both on search results and in the Sabre Global Distribution System. The study compared the revenue results for each of 3,000 green-label hotels to a comparison set of hotels drawn from 6,000 non-certified hotels.

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Authors Howard G. Chong and Rohit Verma, commented: "The hotel industry has moved ahead with sustainability," said Chong, an assistant professor at the School of Hotel Administration, "but there's a nagging question about whether installing green programs interferes with the hotel's quality standards and its ability to provide guest luxury. Some hotels have been reluctant to go green because they might lose business. This study shows that, on average, the hotel industry doesn't lose sales or rate from sustainability."

Verma, who is a professor at the School of Hotel Administration explained that some individual hotels may see a drop in revenue from going green, while others may improve their sales. "We are indebted to Sabre for providing its database," he said. "Using that database of millions of individual bookings we could see the overall effects of a green label."

Added Chong: "It was not possible to address the situation of any individual hotel, but we can conclude that going green is compatible with existing quality standards of hotel service, and that advertising green status doesn't hurt a hotel's revenues. But it may not help either. In other words, green is not a 'silver bullet' strategy."