InterContinental Hotels Group Talks Water Risk, Business Case for Tackling It

In its ongoing efforts to improve water management across its global portfolio of more than 5,000 hotels, InterContinental Hotels Group (IHG) recently completed what it says is the industry’s most comprehensive water risk assessment to date.

In partnership with the Water Footprint Network, IHG mapped all of its open properties and the majority of its pipeline hotels against risks related to both water quantity and water quality. The assessment also identified the actions needed to address these risks. IHG is not making the findings publicly available.

IHG says the water risk assessment will provide the foundation for the company to develop tailored water stewardship action plans for each individual hotel — its brands include InterContinental Hotels, Kimpton, Crowne Plaza and Holiday Inn, among others — based on the property’s age, the type and level of risk, and the business case for tackling it.

Environmental Leader caught up with Paul Snyder, IHG vice president, corporate responsibility, to discuss the water risk assessment and how IHG is translating that into action plans to improve the hotels’ water management. Below are his edited comments.

Q: What did the assessment find about risks related to water quantity and quality?

A: Through our work with the Water Footprint Network, we found that several different risks related to water quantity, quality and regulation need to be considered to determine what actions are appropriate for each hotel. Water is a local issue, and those risks vary greatly by hotel. That’s what makes this project so unique; it’s incredibly comprehensive and tailored to each hotel’s individual situation.

A hotel in a water stressed area will take different actions than a hotel in an area where water is readily available. Full service hotels with restaurants and meeting space have different needs than a smaller extended stay hotel.

Q: What actions did the assessment identify that are needed to address water risks?

A: This is the next step of our relationship with Water Footprint Network. Together we will identify the right actions to address the outlined risks, starting with a pilot in Greater China. Some of the actions will be operational improvements that we can incorporate into the IHG Green Engage tool, IHG’s online sustainability tool, while others will be local investments and partnerships that can benefit our hotels and their surrounding communities. The response will be based on the need; whether that is to improve water quality, quantity or local investment, for example. Water is a local issue, and we want to provide our franchisees with flexible options that will make the most sense for their hotels.

Q: What specific technologies or initiatives will IHG employ to address water risk and how soon do you expect to see a return on investment?

A: The specific actions that will result from our assessment with Water Footprint Network are still to come, but there are currently more than 30 Green Solutions in IHG Green Engage focused on water conservation. Some of these include rainwater harvesting, installing aerators to decrease the flow of water from faucets, installing low flow toilets and showerheads, and using native plants in landscaping, which requires less water.

The cost and ROI will vary by hotel and by market.

Q: Did the report measure any water conservation improvements in IHG properties?

A: The purpose of the risk assessment was to take a comprehensive look at the risks facing each of our hotels so that we can help them develop tailored action plans. It was not meant to track our performance historically.

This assessment and the action plans that will result will complement work already underway to conserve water at IHG hotels. In 2013, we set a target to reduce water use per occupied room by 12 percent in water-stressed areas by the end of 2017. Through the end of 2015, we achieved a 4.8 percent reduction, marking a 40 percent completion of the target.

IHG Green Engage is critical in helping achieve this target. This tool helps hotels to track, measure and report on their water use, carbon footprint and utility consumption and recommends more than 200 Green Solutions, which help deliver greater sustainability.

One example of how we are enabling hotels to conserve water is a toolkit provided to hotels in California. In 2014, following severe drought, we sent water conservation toolkits to our hotels in the state, which included aerators to minimize water flow in faucets and information on how hotels can easily conserve water through IHG Green Engage solutions. Water use per occupied room decreased by 10 percent in IHG’s California hotels from 2014 to 2015.

Q: How much money has IHG invested in water conservation efforts and initiatives?

A: IHG has a primarily franchised business model, meaning that we do not own and operate the majority of the hotels in our portfolio. IHG invests in tools like IHG Green Engage that empower our franchisees to conserve water through the operations at their hotels. The cost to the franchisee varies by location and depends on which Green Solutions are most appropriate to address the hotel’s unique situation.

We know that these actions are bringing cost savings to our franchisees. In the last two years, the IHG Green Engage program has resulted in more than $200 million in avoided costs in IHG’s managed properties — hotels that IHG operates on behalf of third-party franchisees — through energy and water conservation. We know that energy is the second highest operating cost to our franchisees, while water can make up to 10 percent of a hotel’s profit and loss statement, so both present significant opportunities for cost savings.