Greenwashing customers

Like nearly every hospitality conference in the world, the Lodging Conference in Phoenix AZ,  devoted some time to green initiatives though more as a by-product of other topics.  Most hospitality operators remain firmly convinced of the bottom line driven aspect of these initiatives and with some exceptions it is largely true.  Whether using compactors to reduce waste size, bio-mass boilers and other renewable energy sources for hot water or ensuring bio-degradable disposable materials for guest use it is considered de-rigueur as customers seemingly demand it. 

Nevertheless, It is not clear that customers believe an estabilishment's claims on green initiatives much less pay a premium for it. The latter point was underscored in a survey  by market research firm GfK research conducted last year where it was found that "green awareness and engagement do not necessarily translate to green purchase."  Unfortunately, greenwashing, where customers are misled deliberately or not about a product or service's environmentally friendly aspects, occurs with distressing regularity and involves big and small firms.  For instance, a recent finding by an ombudsman in Denmark showed that Coca-Cola’s PlantBottle advertising campaign
was misleading and that it failed to change policy when breaches were brought to
its attention.

Unhelpful from a pricing perspective for green initiatives is a fresh report courtesy of the Heartland Institute which quotes peer-reviewed research as noting that "anthropogenic carbon dioxide emissions are not causing a global warming crisis." Picking up on that is a recent issue of the Advertising Age where an article points to increasing skepticism among consumers about the veracity of greenclaims as the "percentage of consumers who say they don't know if companies'
environmental claims are accurate doubled to 22% between 2008 and 2013".

The foregoing does not indicate a stalling of green initiatives as there are tangible cost savings that companies derive whether or not customers are prepared to recognize and pay a premium for them. For instance, triple glaze pane for windows, widely used in cold weather Scandinavian countries and mandated in Switzerland, not only reduces the "u-value" or thermal performance of the building but also  serves to reduce the noise level exponentially when compared to double glaze which is pretty standard in US hotels. Apart from dramatically lowering heating/cooling bills (one internationally acclaimed architect at the Lodging Conference noted
with just a hint of exaggeration that a Swiss home can be heated by a
hair dryer) hotels in high decibel cities like New York actually could translate that into a premium from guests grateful for a good night's sleep. The latter benefit besides being a USP has, thus far, apparently not been adequately heralded.


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.