Hospitality Operators Lean In to Sustainable Models

Hospitality assets are among the biggest energy users in the real estate market. But, that is changing. Carbon Lighthouse has a profitable climate change solution that turns energy efficiency into an increase in NOI. Hotel companies are leaning into the model, and in the past year, the company has seen a significant increase in demand for the program. JJ Steeley of Carbon Lighthouse talked about the adoption of the program at ALIS in Los Angeles this week.

“Adoption of our energy efficiency as a service approach is growing rapidly, in part due to emerging requirements from the capital market participants,” Steeley, EVP at Carbon Lighthouse, tells GlobeSt.com. “Our GP clients are increasingly competing during fundraising using sustainability impact as a lever. As a result of this and the general need to contain spiraling costs, Carbon Lighthouse is continuing to see strong growth.”

It isn’t only hotels that are seeking energy efficiency through this type of model. Carbon Lighthouse is also seeing demand from office and retail owners as well. “Outside of hotels like Claremont Club & Spa, A Fairmont Hotel, Westin Maui, Montage Beverly Hills and Royal Lahaina, we have top tier financial firms in office and retail including Carlye Group, Alexander & Baldwin, L&B and AEW,” Steeley says. “In 2019 alone, our CRE client wins represented upwards of half a trillion dollars in assets under management and we’ve analyzed 100M sq. ft. of data across more than 700 buildings in the U.S.”

In 2020, there will only be increasing pressure to find a path to sustainability. “As societal and investor pressures continue to mount, property owners will be looking for measurable sustainability solutions,” says Steeley. “GRESB is now front and center as LPs review their asset managers. And smart companies are starting to make those investments.”

Host Hotels, Hilton and IHG have already been leaders in sustainability for hotel properties, and they have real data on their energy savings. “Technological advancements in AI, digital sensors and controls will bring costs down further and allow us to better reduce energy waste and tap into the $45 billion in efficiency reserves out there in the commercial properties of the U.S.,” says Steeley. “In areas where owners are particularly affected by increased costs due to extreme weather events and fires such as insurance premiums and utility rate escalation, we expect to see faster adoption of cost reduction through efficiency-driven technologies like ours.”