The hospitality industry's €768B journey to net zero – PhocusWire

Hotels and other accommodations have a long and costly road to achieving net zero by 2050, according to a report.

The EY Parthenon and study estimates that the accommodation segment will have to invest €768 billion to achieve net zero in the timeframe.

The €768 billion can be broken down into €243 billion, said to be the “full abatement potential of current technologies,” while the remaining €525 billion is investment in “greening the energy production.”

The multibillion-euro investment would involve the implementation of more efficient technologies, such as heating and cooling systems, as well as switching to renewable energy sources.

The investment required is the equivalent of the combined annual revenue of all hotels and accommodations, according to the Road to Net Zero Emissions report.

The study, which reveals that accommodations emit 10% of total tourism sector annual emissions, also identifies the barriers for the accommodation industry in adopting these new technologies, highlighting lack of urgency and financial resources.
Broadly speaking, accommodation players fall into three mindsets when it comes to taking sustainability seriously and taking action.

Spectators, about 32% of the market, don’t pursue sustainability goals and have only taken steps that help reduce costs.

Partakers, about 61% of room coverage, are happy to take steps, but sustainability comes secondary to core business goals.

Frontrunners, the remaining 7%, are those that are proactively driving sustainability action. It is “deeply engrained in their operations and part of the guest offering.”
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The study also highlights four steps the industry can take to get to net zero, including more efficient use of natural resources, sustainable behavior by guests and employees and transitioning to renewable energy sources.

While consumers say they are prepared to travel more sustainably and feel a certain responsibility toward sustainability, most feel the responsibility lies with governments and the industry.

A report by Lufthansa Innovation Hub (LIH) on Asean travelers revealed that about a fifth feel governments and the industry should carry the cost.
Overall, 59% of all respondents believe sustainability is the travel industry’s responsibility, 53% say it’s down to citizens, 49% say it’s the aviation industry’s responsibility and 49% believe governments need to take responsibility, according to a Skyscanner report.
The report also echoes much of the LIH study, finding that consumers feel there’s little information regarding sustainability and that what’s available is confusing.

Skyscanner’s Sustainability in Air Travel report also reveals cost continues to be the deciding factor when it comes to booking flights.

In addition, many travelers don’t believe carbon-offsetting initiatives help reduce global travel emissions, but believe the solution could be sustainable aviation fuel as well as more fuel-efficient planes.

Despite the sentiment that it is governments and the industry that should take responsibility for driving sustainability, most consumers say they are making more sustainable choices than they were a year ago.

According to the Skyscanner report, 58% say they are more convinced than ever that everyone needs to play a role in taking care of the planet.

In addition, 40% say the pandemic has made them realize they need to make changes and take more sustainable actions.

Respondents also say they’re willing to pay up to a fifth more for tickets if suppliers provided more sustainable options.

It remains unclear whether this would happen in practice, with a report from LIH and Hopper published earlier this year revealing consumers don’t walk the talk.
Alongside air and accommodations, other parts of the industry must play a role.

The cruise industry is no exception, and industry body Cruise Lines International Association recently published its own report on progress made toward net zero.

Initiatives highlighted include connecting to shore-side power so that engines can be switched off in port, with 35% of global capacity already fitted to use shore-side electricity.
Further initiatives such as liquified natural gas, exhaust gas cleaning systems and wastewater treatment are also contributing to sustainability goals, with CLIA members aiming for a 40% reduction in the rate of carbon emissions by 2030.

Highlighting how great the challenges are and the investment required is one small step towards decarbonization, but education and collaboration across the whole industry, including investors, as well as a giant change in behavior from consumers, are needed to drive real change.


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