Going Green Embracing Environmental Initiatives & Incentives SPRInG 2015 California Hotel & Lodging Association 11 HISToRICALLy, “GREEn” HoTELS HAVE BEEN little more than very basic cabins found in natural habitats—called “eco lodges”—that appealed to modern day travelers who were concerned about their ecological footprint. As environmental sustainability and responsibility have become more global and financiallyincentivized, however, green hotels are now every bit as luxurious as their non-green competitors, and located anywhere from rustic settings to city centers across the globe. And while there is little uniformity amongst the states regarding environmentally-conscious building codes and regulations, California has been at the forefront of the green hotel movement. Several California cities and counties including Los Angeles, San Francisco, Santa Clara, and Sonoma, for example, have enacted legislation mandating that hotel properties be built according to green criteria. Also, the California Green Building Standards Code (commonly known as “CalGreen”) was the first statewide green construction code in the United States, and applies to new residential and non-residential buildings constructed after January 1, 2011. It requires that these buildings, including hotels and motels, be built using environmentally advanced construction practices. In that regard, hoteliers need to be aware of new CalGreen requirements going into effect later this year, as well as updates other green regulatory organizations are making to their certification systems. Incentives Fortunately for developers, building green hotels isn’t just trendy, it’s profitable. According to a study published last year by Cornell University, hotels gain a significant benefit when they are Leadership in Energy and Environmental Design (LEED) certified. The study actually found “substantial increases” in average daily rates and revenue per available room (RevPAR). Aside from these common profitability measures, green building incentives are found in other areas as well. For example, federal, state, and local governments will often offer: • Tax credits, offsets, and rebates, i.e., the Internal Revenue Code (IRC) section 179D for energy efficient buildings • Zoning incentives, such as increased floor area ratios (FAR) and decreases in required parking areas, which results in lower building and maintenance costs • Expedited permitting and approval process, in addition to reduced building permit fees • Lower operating costs, including insurance discounts Trending Regulatory Developments Because 2015 is proving to be a watershed year for green hotel standards, it is important that hoteliers be on the lookout for new trends and developments in this evolving and complex area. The following are a few that are particularly important. LEED The LEED rating system, established by the US Green Building Counsel (USGBC) in 1994, has become the most popular and widely used green building rating system globally. Currently, there are more than 69,000 LEED building projects located in over 150 counties and territories and, as of February 2015, California was ranked 7th in the nation in terms of square feet of LEED space available per state resident. There are four levels of LEED certification: Certified, Silver, Gold, and Platinum, each of which is based point rating system that measures: • Sustainable sites • Water efficiency • Energy and atmosphere • Materials and resources • Indoor environmental quality • Innovation and design Currently, the LEED benchmarking system is in a state of transition, upgrading from version 3 to version 4. LEED v4 is set to be implemented in November 2016, and with its hospitalityspecific adaptations, its changes are likely to have a profound impact on the industry. Indeed, LEED v4 marks the first time that LEED has ever been specially catered towards the hospitality industry. It is now easier for hotels to get higher marks in LEED v4 based on the way certain credits are calculated. Density credit, for example, is now given to hotels based on their proximity to other commercial establishments, rather than the rededication of land in an urban environment. Likewise, a lighting pollution credit can now be earned through the use of lighting controls to optimize energy use By Vincent Loh, Esq.
CHLA lodging News Spring 2015
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