HRS Product Chief Martin Biermann talks...
- Increasing traction of Green Stay hotels
- Making traveler decision-making easier
- Sustainability actions leading to cost savings
A BCD Travel survey published
in October showed that sustainability was among business travelers’ lowest
priorities. Yet travel managers—especially those in large global companies—still
are tasked with delivering business travel emissions reductions as the
Corporate Sustainability Reporting Directive goes into its second reporting
year in 2025. The directive creates transparency into emissions trajectories and
portends a more competitive posture commercially for companies that manage
emissions downward. Hotel solutions and procure-to-pay platform HRS is counting
on that competition in the hotel market itself to win RFPs, but also among global
buyers who must source with an eye toward reductions for their own companies. Data
from the company’s Green Stay initiative, which received
ISO certification this summer, indicates increasing engagement for
hoteliers and travel programs that can show value via sustainable choices. HRS
chief product officer Martin Biermann spoke with BTN editorial director Elizabeth West last
month about the findings.
BTN: What was the original objective of slicing into the
larger data set of Green Stay bookings. What were you looking to find or
provide with the data?
Martin Biermann: We launched Green Stay in 2020, and
ultimately the goal for it was to obtain the most accurate data points for our
customers to optimize their carbon footprint, but also other aspects of
sustainability like water and waste. To do that, we need to take in a variety
of data attributes from our hotel partners, small or big, to do the necessary
calculations so they can move from reporting [emissions data] to reducing emissions
to removing. While we're doing this, of course, we found a lot of interesting
insights we could provide to the industry, especially with the context of
booking behavior, procurement behavior and priorities of our customers. A lot
of times these insights can remain uncovered or isolated on a per-customer
basis.
BTN: The top-line numbers found hotel emissions
becoming a larger percentage of overall business trip emissions. The insights
underneath that, though, are more revealing.
Biermann: On the one side, trip durations that we see
tied to length of stay are still more than double compared to prior to the
pandemic. It was 1.8 nights average prior … and 4.2 nights a short time after.
We see this now coming down to 3.8 nights, but it’s still double the length of
stay—so that’s one reason. The second is that, particularly in Europe, we see a
lot of people changing from air travel to rail because European Commission
taxes on kerosene and [regulations around] alternative fuel usage also … [have
resulted] in airfare surcharges, which force people to stay in policy and
consider more rail. That flips the emissions equation more heavily toward
hotel.
BTN: So Green Stay hotel emissions per night are not
increasing.
Biermann: No, they are not.
BTN: In what types of hotels are you seeing the
largest emissions reductions? Is there a brand or a stock category that is
doing very well? Or, is there no pattern?
Biermann: A five-star luxury property oftentimes
consumes a lot more energy and water. Yet depending on the property’s strategies
and sustainability measures with recycling water onsite or having more
efficient laundry or using LED lighting … under full production, the stock category
alone does not really direct sustainability. There is a correlation in some
markets but not all.
BTN: In order to reduce emissions, do you see
travelers trading down service tiers?
Biermann: That is not something we see in the data …
and we did look for it. Our Green Stay indicator in the platform shows clearly that
while two properties may be equal on price and service level, there is a
significant difference on the carbon emissions—this one is Green Stay, and the
other isn’t. So giving travelers a very simple label to say, “Here, you are
making now a sustainable choice. Over here, you do not.” That's where we found
that people can easily operate. It doesn’t demand that they do their own
comparisons on different attributes or try to understand the carbon
calculations.
BTN: Unlike some other studies—notably BCD Travel’s survey
released in October—you do see business travelers choosing green options
through Green Stay and increasingly so?
Biermann: Green Stay hotels saw a 15 percent
year-on-year increase in bookings from HRS clients from 2022 to 2023 with a 45
percent market share of all room nights. Based on projections drawn from
bookings made in the first six months of 2024, Green Stay hotels are projected
to see a further 17 percent increase in room nights booked from HRS clients in
2024. From a comparison perspective, non-Green Stay hotels accounted for 55
percent of bookings by HRS clients in 2023. Again, based upon pacing metrics
drawn from the first two quarters of 2024, non-GSI hotels will account for just
48 percent of bookings from HRS clients in 2024.
BTN: Individual companies configure their own
sustainability scorecards in the Green Stay program, which introduces some
variability in how Green Stay can be applied. Do you see any differences
between regions in, say, the rigor of their hotel sustainability scorecard
demands?
Biermann: The North American strategy is a little bit
looser than the European strategy, and consequently the efforts that are taken
on a regional basis to communicate and train employees can vary. But we do have
some customers with a very centralized approach and who educate everybody in
the same way. They may also make decisions that a hotel must be in Green Stay in
order to be in the corporate hotel program.
BTN: To that point, you are seeing across both Europe
and the U.S. markets that Green Stay hotels are winning bids at a higher rate
than non-participating hotels.
Biermann: In the U.S., we see Green Stay hotels
continuing to increase their chances of success in customer RFPs with 29
percent more Green Stay hotels accepted into customer programs this year
compared with last year. The top-rated Class A Green Stay
hotels have had so far a 78 percent success rate in RFPs for 2025. [That
compares] to a 29 percent win rate for hotels that are not yet part of Green
Stay.
BTN: You found as a whole Class A Green Stay hotels—those that have really leaned into a sustainability strategy
with HVAC changes, electrical and lighting changes, waste water recapture and
the like—also had a another unique attribute that might be encouraging RFP
success, aside from their sustainability credentials.
Biermann: We see hotels that do these investments
ultimately are bringing down the average daily rate effectively. This is what
we see in the bookings and the RFPs. We have to assume that this is due to the
efficiency gains on how they basically leverage a lower energy footprint. In
the U.S. across all Green Stay hotels, ADR is down by 3 percent compared to
2023.
BTN: Color me skeptical, Martin. Why wouldn’t a hotel
let savings like that drop to the bottom line?
Biermann: Maybe they are actually saving more and
just handing part of the savings to the buyer. We can’t know that. But we see
quite a significant reduction in ADR when Green Stay hotels are accepted into RFPs.
Our customers [are] not changing the qualitative aspects on the criteria. So
it's not like they now choose more bed-and-breakfast properties which have a
lower footprint. The qualitative parts are quite stable in terms of location
and average service level. Otherwise, [the programs] would have a dramatic
issue of travelers not [complying]. And we are not seeing that.