SPECIAL REPORT
IoT are not a good fit in all hotels , particularly luxury properties that need to live up to 5-star rating requirements . At the Wynn Las Vegas , putting the room temperature in a “ setback ” mode to save energy every time a guest leaves the room is just not feasible , according to Erik Hansen , chief sustainability officer at Wynn Resorts .
“ We don ’ t have things like automatic setbacks , because it goes back to the guest experience ,” he says . “ If you are staying at a 5-star resort like Wynn , and you leave your room and it ’ s 70 degrees , the last thing you want to do after you ’ ve been outside at the pool in 100-degree heat is come back to your room and it ’ s 80 degrees .”
Hansen says Wynn monitors its energy efficiency on a macro level through a smart building management system . Wynn Resorts also opened its own off-site solar facility in June to offset 75 % of its peak power needs ; solar panels cover 100,000 square feet of its rooftops .
RETRO-COMMISSIONING For older hotels , it ’ s not always financially feasible to upgrade to an IoT network . But that doesn ’ t mean upgrades can ’ t be done in other ways . “ Investing in newer equipment is typically a larger capital outlay and a longer payback period ,” says Rick Tonielli , building optimization program manager at the ComEd Energy Efficiency Program , run by an Illinois utility company .
He advises hotels to consider retro-commissioning existing equipment . Finding ways to operate that equipment more efficiently , as well as making smaller-scale replacements such as upgrading to LED lighting , can keep costs down while increasing energy savings .
“ We only ask the customer to pay for improvements that are going to pay for themselves in 18 months or less . So it ’ s a quick ROI ,” he says . “ And not only are they recovering that money , the energy savings go on indefinitely .”
GREEN FINANCING
There are multiple ways for hotel companies to keep operations in line with sustainable initiatives , but financing can be an environmentally responsible endeavor , too , thanks to green bonds . Green bonds work much like other investment bonds , with some additional layers of auditing and reporting , except they fund climate-minded projects such as renewable energy , green buildings , sustainable transportation and climate-resilient infrastructure .
Available in the market for about 10 years , green bonds are quickly becoming attractive to institutions and asset managers seeking to raise capital for a sustainability-related project — or just trying to be more socially responsible about investments .
“ Green bonds are great to issue if you have a significant , upfront , big capital cost ,” says Meg Crocker , an independent financial consultant in San Francisco . “ That ’ s why a lot of cities will do it for climate resiliency and water plans . And you can pay it back with proceeds from the investments you ’ ve made .”
Sustainable projects Swire Properties , parent of Swire Hotels , recently issued its first green bond in Hong Kong ; proceeds will fund green projects . This year , France ’ s AccorHotels acquired its head office building in Paris using a green mortgage loan . While the franchised nature of the hotel industry complicates the issuing and investment in green bonds , there are ways for management groups to get involved .
“ In most cases , it will be the owner of a property or asset , rather than the hotel management group , that will seek out green bonds as a means to finance a sustainability-related project ,” says Michael Laas , founder of Sustainable Futures Group , a Miami-based sustainability consulting company . “ However , hotel management groups are an important partner in the process and can use green bonds as a creative tool for capital expenditure , if it meets the requirements of a green bond .”
Laas cites examples of REITs using green bonds to finance projects with high green building standards such as LEED certification , as well as for building retrofits related to energy performance , water and efficiency . “ It is not far off that soon a REIT will use green bonds to finance debt or development of new or existing hospitality properties ,” he says .
While investing in green bonds might boost a company ’ s green status , especially when it comes to marketing and branding , sound investing is key . “ Green bonds must be a competitive or better option to traditional debt financing for it to be an attractive alternative ,” Laas cautions . “ So make sure the interest rates are beneficial for business .”
According to Bank of America , which has issued four corporate green bonds totaling about US $ 4.25 billion since 2013 , there are four types of green bonds :
Green Use of Proceeds Bonds : Issued by financial institutions and corporations , the proceeds are used for green projects .
Green Asset-Backed Bonds : A smaller group of assets can issue these bonds for things like rooftop solar panels and mortgages for energy-efficient homes .
Green Project Bonds : Issued for large-scale green efforts like a wind farm or transportation projects , assets and profits fund the green bond debt .
Pure Play Bonds : Issued by companies in green industries and whose revenue comes from the environment sector , such as a solar farm , electric-car maker or a waste-recycling plant .
28 hotelsmag . com January / February 2019