IHG Debuts ‘Low Carbon’ Hotels, Calls for Green Subsidies

InterContinental Hotels Group (IHG) debuted a program on Wednesday to showcase hotels whose operations have low carbon emissions footprints.

Participating hotels in IHG’s “low carbon pioneers” program must meet energy efficiency standards, draw power from renewable energy via local suppliers, and satisfy related requirements.

IHG is launching its effort with three hotels. It will put “badges” on their listings its booking platforms, starting with the IHG One Rewards app.

“We want to be able to scale it to be more,” said Catherine Dolton, chief sustainability officer at IHG. “I’m not pretending we’re going to get to thousands of hotels quickly, but this is going to help us to test and learn about those sustainability measures so we can then roll them out more widely.”

IHG has a global portfolio of more than 6,300 hotels. Its program aims to attract environmentally conscious travelers, particularly from corporate travel buyers whose companies have carbon neutrality targets.

Hotels’ green transition comes at a price

Why are there so few hotels to start? Hotels want to be green, but doing so can have high up-front costs. IHG acknowledged that the widespread adoption of low-carbon technologies faces significant hurdles. The high capital costs of upgrades like heat pumps and higher operational costs make the transition challenging for many property owners.

“In many markets, especially in Europe and the Americas, the cost of electricity is 3 to 4 times higher than that of gas,” Dolton explained. “So if you put something like a heat pump in, they’re much more efficient than your standard boilers, but you may not get a cost savings from switching to them.”

Hotels that are upmarket but low carbon

The Kimpton BEM Budapest is one of the few first members of IHG’s initiative.

It has avoided fossil fuels almost entirely, save for backup generators. Instead, solar panels on the hotel’s roof feed clean electricity into the building, while high-efficiency heat pumps have replaced traditional heating and cooling systems.

There are well-insulated walls and guest room controls that power down when visitors step out. And the kitchen is all-electric.

IHG calls for government help

To address these challenges, IHG is calling for increased government support. The company seeks subsidies for green technologies and incentives for renewable energy adoption, particularly for small and medium enterprises in the hospitality sector.

“Accelerating change at scale for both IHG and the wider industry requires broader support from governments,” said CEO Elie Maalouf in a statement.

IHG’s initiative distinguishes between “low-carbon” hotels, which have access to renewable energy sources from local power suppliers, and “low-carbon ready” properties, which have implemented on-site measures but may lack access to off-site renewable energy options in their markets.

As of today, IHG doesn’t have any “low-carbon ready” properties. But once it does, it will badge them similarly on its app and site.

“Some of the interventions these hotels [are implementing] are not cheap,” Dolton said. “So it’s about creating that broader commercial case to allow greater scalability in the future.”

Receiving operational certification from a program recognized by the Global Sustainable Tourism Council, such as Green Key, or a sustainable building certification (such as LEED, BREEAM, or EDGE) also has costs. Certification is required to stay in IHG’s program.

Testing ways to scale green hotels

IHG’s move comes as the hospitality industry faces increasing pressure to reduce its carbon footprint and adapt to changing consumer preferences for sustainable travel options. IHG’s initiative may serve as a blueprint for the sector, potentially influencing how other major hotel chains approach the challenge of decarbonization in the coming years.

“This is a start for us,” Dolton concluded. “Everybody appreciates that this is a long and complex journey. So, you know, we’re not pretending we have all the answers, but this is a really exciting program we’re proud of.”

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