Environmental Management of Tourism Growth in China White Paper Prepared for Wyndham Hotel Group...

Environmental Management of Tourism Growth in China White Paper Prepared for Wyndham Hotel Group

Linda Powers Tomasso

Tourism-related expenditures in China, US$, 1995-2015

Source: Deloitte & Touche, 2011

1E118 presentation 11/17/2011

WTO PREDICTS THAT CHINA WILL BE

THE WORLD’S TOP DESTINATION FOR

INTERNATIONAL TOURISM BY 2020.

E118 presentation 11/17/2011 2

Inbound international visitation:

slowing of business travel > boom in leisure/adventure travel promoted by successful hosting of 2008 Beijing Olympics

100 million visitors by 2015 = 8% of global tourism market 5.2% of Chinese GDP, US $20 billion in foreign exchange

Chinese Domestic Tourism fueled by:

political restrictions on mobility lifted newly mobile middle class with disposable income government investment in national infrastructure 1.9 billion domestic trips in 2010, 3.3 billion by 2015

Compound growth rates: 8-10% luxury / 25% domestic travel

Twin Pillars of Tourism Growth in China:

3E118 presentation 11/17/2011

Key Environmental Challenges To Hotel Sector Growth In China:

Water Scarcity Energy Needs & Energy Delivery Systems Indoor Climate Management (IAQ) Air Quality at Building Sites Grey and Black Water Management Food and Solid Waste Management Workplace Health and Productivity Worker and Managerial Training 3-week vacation = “emergency situation”


Environmental impacts specific to hotel expansion trends in China:

1. Luxury hotel focus = average guest resource consumption

lighting and electricity draw business centers, personal computers & electronics water for bath, kitchen, & laundry HVAC use: larger room size > more heating/cooling

2. Resort area development (Boao) stresses environmentally pristine areas & creates tourist-related impact to coral reefs.

3. Rising income reflected in hotel celebration of Chinese banquets, generating huge amounts of hotel food waste.


Chinese response to hotel industry growth:

MoC goal to create 10,000 Green Hotels by 2012 “Green Measures,” or sustainability, officially added as

core criteria of CNTA’s Hotel Ratings System on 1/1/2011◦ Points for green design, procurement & consumption,

food safety, waste treatment, customer education ◦ use targets of 20% less water and 20% less electricity◦ waste reduction by foregoing one-off disposable

amenities Unclear oversight of hotel energy efficiency

requirements: Construction or Commerce Ministry? CNTA’s National Hotel Rating System vs its Green

Ratings System -- integration of five-star and five-leaf systems?


Building Energy Use in China:

China has the world’s second-

highest building energy use

behind U.S.

Energy for building operation &

construction currently = 45% of

China's total annual energy use

vs. a worldwide average of 39%.

Warning the hotel sector, MoC

faults hotel hot water use as a

major driver of China’s increased

building energy. LBNL, 2010


1970s 2006 20200%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Growth of Operational Build-ing Energy in China

National Energy Use

Ministry of Construction Building Energy Mandates:

2005 Energy Conservation Law> energy reductions over pre-code buildings of 50% by 2010 and 65% by 2020.

2012-2017 five-year plan> 1-star rating for all new construction, including hotels.

Government sell-off of State-owned hotels primed for energy retrofits and hotel chain growth.


Tools for managing building energy sector from an environmental perspective:

International Green Building Support Certification schemes: LEED vs 3-Star Best Practices and Tools suited to

China Renewable Energy Strategies:

15% government target by 2017

Global share of solar hot water/heating=58.4%

Low level technologies like insulationE118 presentation 11/17/2011 9

Sheraton Hotel Shenzhen Jing Ji Dameisha , China

Aecom Construction


Sustainable Features:

• S-shaped design complements surrounding environment

• Orientation that makes maximum use of natural sunlight • All rooms have an exterior view to oceanfront

• Energy-saving strategies: low-emissivity glass, lighting sensors, LED

Training franchisees in sustainable hotel management will be key for chain expansion:

Franchising a late-comer to hotel industry in China.

Ability to maintain branded standards past detriment to hotel franchising in China now changing.

Pool of franchise managers from State-owned hotels: 83% expressed interest.

2- & 3-star hotel managers looked to Super 8 and Jin Jiang as models.


4.418.7

52.7

18.7

5.5

Franchisee Pref-erence for Quality

of Hotel

5 star 4 star 3 star 2 star 1 star or less

Future challenges to sustainable hotel management in China:Rising living standards raise comfort

expectations for heating/cooling. ◦ Higher overall energy consumption and energy costs◦ Large hotel energy footprints will face mandated

reductions

Climate change:◦ Southern hot zone creeping northward, requiring more

energy-intense cooling than heating◦ Hotel building portfolios will reach emissions thresholds

Regional water shortage◦ Spread of drought in Northern cities◦ Glacier melt > water irrigation, food prices


Conclusions:Large-scale building environment dwarfs

sustainable development in hotel sector

◦ Few hundred buildings out of 50,000 high rises

Water use in water-scarce regions presents special challenges > water reclamation & reuse

Advancing technology hopeful but pace of change reduces payback window to 3 years for retrofits

Franchising opportunities pushing domestic owners toward foreign partnerships > influence toward sustainability


Conclusions, continued:Employee education in sustainable hotel

management necessary & key: IHG Academies

Stakeholder education critical to shape attitudes toward sustainable hotel travel among new generation of tourists

Domestic market is yet to be captured, although some previous brand loyalty for early entrants.

Sustainability can be a differentiator, but Chinese mass market not yet ready for value proposition sustainable tourism offers if it means more $.


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