Green Practices Guide: Challenges to ‘going green’ in the UAE

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11/08/2016 - Hospitality

TFG Asset Management’s Green Series guide outlines some of the main obstacles the hospitality industry faces to ‘going green’.

In the Middle East there is skepticism towards sustainable practices with hoteliers hesitant to take the plunge despite green measures proving cost effective.

The main barriers to going green include the following:

Owner’s resistance: Green practices promise long-term benefits and high ROI. However, the initial costs required to invest in tools and equipment and the processes involved in seeking approvals from the relevant authorities, act as a deterrent for hotel owners. It is the job of the assigned asset manager (AM) to advise the owner that incorporating green practices will shield them against future risks such as energy costs, which are subject to annual increases. In addition, the investment in green initiatives that address the hotel’s CSR strategy will certainly attract more financing options for the hotel property.

Lack of investment: Despite the long-term benefit of adopting green measures, small or independent hotels often find it difficult to finance the purchase of tools or technologies to put them into practice. The inability to fund high-cost solutions is the main reason hotels overlook the option to ‘go green’. In a bid to overcome financial hurdles associated with green practices, Saeed Mohammed Al Tayer, Vice Chairman of the Dubai Supreme Council of Energy & Managing Director & Chief Executive Officer of DEWA recently outlined the potential development of a Green Fund as a solution to sustaining a green economy. Speaking at the World Green Economy Summit he stressed the importance of encouraging more green developments across the emirate. Government incentives can play a role in encouraging all types of hotel establishments to adopt sustainable operations without encountering financial difficulty.

Lack of measurement and benchmark practices: Many hotel operators wishing to implement sustainable practices often lack the benchmarking reports that are necessary to set realistic and achievable goals. The most effective benchmarking method is to share and compare expenses incurred from property to property to be able to analyse the effects of green practices on the expenditure of each hotel. However, another issue identified in this research is a lack of willingness and transparency among the hotels to share this data.

As part of its Hospitality Program launched in 2013, Emirates Green Building Council (EmiratesGBC) is developing a benchmarking and reporting tool to help properties compare their energy and water performances against their peers and the industry average. A detailed set of indicators, complementing the standard measure that is based on star rating, will allow them to review their achievements in a relevant way; i.e. they will be benchmarked against comparable facilities (resort with resort, tower with tower).

“The obstacles to going green are actually just misconceptions in the Middle East, because if you think long term, the benefits actually outweigh all of the initial costs,” said Mariano Faz, Head of TFG Asset Management.

“The main challenge here is to unite and ensure all hoteliers are on the same page to approaching green status.”

The article is also available in infographic