Credit crisis’ impact – when green trumps green.

The impact from the financial crisis is being felt in virtually every aspect of economic activity with eco-friendly initiatives beginning to come under the budgetary axe. The Financial Times reports on how “The green agenda is at risk of being sidelined by the credit crisis, in spite of attempts to keep issues alive in the commercial property industry”.

The paper notes that “a recent study of more than 100 directors responsible for real estate by Knight Frank showed that concerns about the environment and energy efficiency had fallen to the bottom of the agenda. On a list of the 10 most important factors when considering a building, sustainability was 10th. The top issues were rental cost and staff retention”.

The Knight Frank survey, though limited to the UK, goes contrary to recent findings in North America where a recent survey found almost 20 per cent of travelers choose hotels because of environmental practices, including housekeeping services that only use non-toxic cleaning agents. The survey also found that “going green in the hotel industry is not just in vogue — it’s sound business to consume less energy, less water and create less waste”. The Green Building Council has certified only four U.S. hotels as “green,” while more than 800 office buildings already have its seal of approval.

While the Marriott Corporation arguably is at the forefront with its green initiatives encompassing the calculation of its carbon footprint with a view to aggressively minimizing its impact, others from Fairmont to Accor have taken significant steps on the green path including purchasing clean and renewable wind energy for its US hotels. All of that was before the credit crisis began snowballing. A paucity of funds and contraction of travel that seems all but inevitable likely will stifle if not abort many of the green initiatives as hotels scramble to focus on the green(back) rather than on green initiatives.

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.