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See how green we are

A small set of hotel chains shows that eco-friendly practices help boost profits, not just a caring image.

Anumeha Chaturvedi | Print Edition: August 22, 2010

After a stock market listing in October 1994, Kamat Hotels Chairman and Managing Director Vithal Kamat was looking for the next big need to meet in the hospitality business. A conversation with close friend and Technical Director Param Kannampilly at Mahabaleshwar, a hill station in Maharashtra, steered him towards building an environmentally responsible hotel that could fill a niche in the hospitality industry.

Three years later, Kamat and Kannampilly's plan came to life in the form of Asia's first eco-friendly hotel — yes, it was the first such hotel in the region certified by HVS New York, a global consulting and services organisation — branded The Orchid. This five-star property in Mumbai, targeting the business traveller, was located near the airport and competitively priced. The Orchid was an instant success. Recognition also came in the form of over 63 international awards for its energy conservation efforts.

Between 1997 and now, the go-green wave in the hotels business in India has gathered momentum. And how. HVS has certified seven hotels in the country and will add at least four more to that list this year. A second agency, LEED, short for Leadership in Energy & Environmental Design, a Washington D.C.-based agency, has certified two with a third one set for opening in September. Their clients include names such as ITC-Welcomgroup, The Park Group and Club Mahindra.

At The Orchid, meanwhile, the success was such that Kamat and Kannampilly set up a consultancy, Concept Hospitality, which got into a management contract for Hotel Rodas — owned by realty major Hiranandani Group — in the Mumbai suburb of Powai. In 2009, Kannampilly bought Kamat's stake in Concept Hospitality, and launched a new brand of hotels called The Fern, positioned as a chain offering hospitality with responsibility. The first Fern Hotel came up in Jaipur last year with plans to add half a dozen such green hotels to the group's catalogue this year.

"The cost of an Ecotel is about 5-10 per cent more than a regular hotel, but the long-term savings and benefits most certainly offset the investment," says Kannampilly, now Chairman and MD of Concept Hospitality, adding: "A proper implementation of eco-friendly practices reduces wastage and the operating profits are optimised." Ecotel is HVS's rating and hotels badged by it are commonly called Ecotels in the industry.

He is speaking from experience of running an Ecotel for a decade. Hotel Rodas, say environment specialists from the hotels business, is a fine example of sustenance — both environmentally and financially. Its arched façade, glazed windows and internal walls are not just visually arresting, but also play a critical role in reducing loss of energy from the sides of the building and maintaining lower temperatures within.

The hotel uses excess heat generated by its air conditioning units to heat water for its bathrooms and kitchen, doing away with boilers in the process. This heat recovery system alone saved Rodas upwards of Rs 14 lakh between January 2008 and October 2009, estimates HVS. Energy efficient lights and signage translated into savings of Rs 34,000. Use of recycled paper, filing equipment and stationery added about Rs 1 lakh to its kitty.

The growing green consciousness among Indian hotel chains shows that such initiatives clearly add to the bottom line, not just add a new dimension to a hotel's brand identity. Environment friendly practices elevate a hotel's profile, and save a lot of money, as eco-friendly materials require less maintenance. Use of energy efficient lights, recyclable materials and drip irrigation systems bring down energy and diesel costs, too, says Akshay Kulkarni, Executive Director for South Asia, Cushman and Wakefield Hospitality.

For instance, at the Jaipur Fern, the hotel is saving Rs 166,000 a year merely by replacing conventional bulbs with compact fluorescent lamps, or CFLs. Replacing a regular cistern with interleaved plungers for three-litre and six-litre flushes reduced water consumption and resulted in savings of Rs 27,000. "If you'll earn more money in 10 years, then spending a little more now is a much more sensible decision," says Kulkarni.

Such practices have typically been honed and implemented by the likes of HVS or LEED, whose teams make plans around energy management, water management, solid waste management, environment commitment, and employee education and community involvement. HVS was launched in the United States in 1994, but gradually lost ground there as hotels started focussing solely on bringing down waste management costs.

But in India, the services offered by the likes of HVS have gained quick acceptance. "Environmental awareness has increased over the past two years, and we plan to launch the Ecotel concept worldwide — this time from India," says Manav Thadani, MD of HVS Eco Services.

Club Mahindra's Coorg and Goa properties, which recently received Ecotel certification, and two LEED-certified properties — The Park in Hyderabad and ITC Royal Gardenia in Bangalore — are recent examples of the growing demand for green certification. ITC-Welcomgroup, in fact, comes from a stable that prides itself in offsetting the carbon footprint of its core cigarette and paper-making businesses. The group says it is water and carbon positive. Simply put, for every litre of water it uses, it produces two litres by reducing water consumption, using recycled water, and operating about 2,500 check dams in areas where it promotes social forestry in India.

It was the first to introduce the now ubiquitous water-saving sensors (taps that stop the flow of water once the user finishes using the tap or urinal) to India in 1992. "If we're reducing our water consumption by 30-40 per cent, aren't we laughing all the way to the bank," reasons Niranjan Khatri, General Manager of WelcomEnviron Initiatives, and the man credited with the chain's go-green moves. Some 31 per cent of the power the company used over the past one year came from renewable sources like wind, sun and biomass, he adds.

At ITC Royal Gardenia, which opened in November 2009, the lobby and the multi-cuisine restaurant Cubbon Pavilion were designed with four columns of vertical hanging gardens that eliminate the need for air conditioning. That, and CFL and light emitting diode or LED-based lighting together with large double insulated windows, which reduce the need for daytime lighting, have resulted in savings of Rs 1.5 crore on electricity annually. "Rainwater harvesting that pipes water through toilets, drip irrigation systems and recycling black and grey water has reduced water consumption by half and spending by Rs 40 lakh a year," says Anand Rao, General Manager of ITC Royal Gardenia.

What about the costs of installing eco-efficient devices which deliver such savings? Recalling the first greencertified building in the group, Khatri says that ITC Green Centre, the company's office in Gurgaon and India's second LEED-certified building, cost it 15 per cent more than what a comparable non-green structure would "as most of the (building's fittings) were imported". But now, products like CFLs and certified wood are easily available in India at cheaper rates. Elsewhere, in Hyderabad, The Park procured most of its materials from within a radius of some 800 km to reduce transportation costs.

Steel and wood came from Visakhapatnam and Vijayawada in Andhra Pradesh, respectively, fly ash blocks from Pune in Maharashtra, and concrete locally. "Our estimated energy savings, as compared to a baseline building, are 32.4 per cent. We are spending Rs 1.65 crore less on electricity," says Deepak Bali, Vice President of Apeejay Surrendra Park Hotels. While there is a clear cost incentive for hotels, especially new ones, to go green, the jury is still out on whether it attracts customers.

"Reduce, reuse and recycle works for operating profits, but whether it gets you guests is a matter of debate," says Kulkarni of Cushman and Wakefield. A survey by research firm Market Search India had about 47 per cent respondents saying they would opt for an eco-friendly hotel, if an option was available at the same price point. Ashu Paul, owner of an eponymous architecture firm, is one such green-conscious customer.

"I might be a drop in the huge ocean, but by opting to stay in these hotels, I feel like I've done my bit for the ecosystem," says Paul. Paul, who designed The Fern in Jaipur and The Orchid in Delhi, insists he is not biased by his association with the hotels, and predicts custom will grow for green hotels in the years ahead.

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