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The Business Case for Living Infrastructure in the Hospitality Sector

By Jock Gammon

Paragon Hotel

Paragon Hotel, Sydney

The last few years have seen the benefits of green or living infrastructure become more widely accepted than ever before. Green walls in office and retail spaces are not as mind-boggling as they used to be (though they still elicit delighted sighs). Building owners are coming around as the research data continues to roll in. Today it makes more business sense than ever to incorporate living infrastructure into new builds, renovations and upgrades. So I think now is the perfect time to start out for the latest frontier – the hospitality sector. Let’s run through the business case for living infrastructure in the industry that looks to serve others.

Biophilia

Over the last couple of years I’ve written quite a bit about biophilia – the innate emotional connection humans feel toward nature and other life forms[1] – that’s because its benefits can be applied across a range of projects and industries.

The hospitality industry can benefit from living infrastructure’s biophilic benefits just as the retail and healthcare sectors and white-collar business before it. However, because hospitality is quite literally the business of welcoming, entertaining and pleasing guests, biophilic design is even more of a ‘no brainer’ here than in the other industries.

Studies have shown that green elements in living environments can reduce stress, enhance mood, improve cognitive skill and scholastic performance, it can also prompt higher levels of self-reported physical and mental health[2] so patrons feel better in your space.[3] And when they feel better in your restaurant, bar or hotel, they are more likely to visit, stay a while and part with their cash.[4], [5], [6]

Furthermore, resident preference and behaviour studies confirm that trees and vegetation make a place more enjoyable to work, play and live. This leads to increased expenditure in the area, from housing costs to social activities and engaging with the local economy.[7]

In fact in a study on the effects of urban greenery on the consumer retail experience, customers said they were willing to pay 8-12% more for goods and services in areas with a mature tree canopy.[8] So entwined with this ‘feel good’ biophilic reaction to living infrastructure is the added consumer perception of luxury.

From shabby, to chic, to essential

Remember when products with the ‘environmentally friendly’ tag were seen as a little bit daggy and unpolished? Then the product improved and so did the marketing – green became the premium, luxury choice – an upgrade of sorts, for those who could afford to pay more. Now we are seeing consumers view sustainability as an essential ‘response to the challenges of today and tomorrow’.[9] It is an expectation that all businesses have a meaningful corporate social responsibility (CSR) program to meet these challenges.

With political uncertainty around climate change and mitigation strategies, it seems the people are taking the lead and these days, consumers aren’t so easily led. As Becky Willan, Director of sustainability specialist agency Given London, noted: “An inflated brand image does not sell your product or service any more as people are starting to see through the hype.”[10]

Willan continues: “Consumers are looking for something more, something with tangible value that has a positive impact on them personally. Hotels should be improving the whole experience for guests, whether it’s offering locally sourced produce or inviting them to get involved in local wildlife or cultural initiatives. It’s about getting hotels to think about what they do already and look at how they can create more value for guests on a personal level.”[11]

And the research supports this. The 2009 Hartman Group study, Sustainability: The rise of consumer responsibility found that even in hard economic times like the global financial crisis (GFC), the consumer desire to do ‘the right thing for the common good’ was a strong guiding principle for purchases and patronage because it inspired hope and represented forward-thinking.[12]

The report goes on to say these beliefs and aspirations surrounding sustainability behaviours are quickly becoming a ‘broadly focused expectation to find such qualities reflected in the stores, employees, brands and products they buy, interact with and use on an everyday basis’.[13] So what is your company doing to sate this growing consumer thirst for sustainability?

Yes but how much will it cost me?

Republic Hotel

Republic Hotel, Sydney

So you’re not yet swayed with the qualitative benefits of biophilia and the market research above? Think it will cost you more than what these ‘warm and fuzzy’ benefits can deliver? Actually no. After the initial set-up costs, living infrastructure can deliver ongoing savings through lower energy and water costs, higher rental rates and reduced infrastructure life-cycle costs.

One of the cool (pardon the pun) benefits of living infrastructure like green roofs, walls and facades is the potential to cut energy costs by reducing building heating and cooling requirements. ‘Green walls and facades can reduce heat gain in summer by directly shading the building surface. Green roofs reduce heat transfer through the roof… improving the performance of heating, ventilation and air conditioning (HVAC) systems’.[14]

Hotels and restaurants with landscaping and edible gardens can save on water costs by integrating living infrastructure systems that capture and filter rainwater for reuse around the site. It is worth noting though, that opportunities to save and recycle rainwater vary greatly depending on ‘the non-potable water needs of a given property, local water rates, and the number and intensity of storms throughout the year’.[15]

Living infrastructure like green roofs can reduce life-cycle costs associated with property improvement. Unlike conventional bare roofs, green roofs do not need to be replaced as frequently because the plant life acts as an additional barrier to the elements. It protects roof integrity and the waterproofing membrane from temperature fluctuations.[16],[17] In fact, green roofs are typically considered to have a life span of at least 40 years – double that of their conventional counterparts.[18] For example, on a building with a 40,000ft2 roof (3,716m2), a green roof could ‘avoid a net present value of over $600,000 in roof-replacement costs over 40 years; a medium-size office building, with a roof half that size, could save over $270,000’[19] – great news for owners in the hospitality sector.

Cutting costs is one thing, but living infrastructure can also boost your bottom line. A 2013 study in the USA found that the presence of quality vegetation and greenery added approximately 7% to average rental rates on office buildings and an average of 22% to rental rates for retail buildings.[20],[21]

Sure those stats aren’t hospitality sector specific, but those studies haven’t yet been done. What we can glean from these trends is that living infrastructure pays off and this could translate to an increased room rate for your hotel, or plate and drink prices at your eatery. It really does pay to be green.

I could go on and on, there are just so many benefits associated with living infrastructure. Unlike some sustainability solutions, it’s also scalable to your budget and the size of your space so there really is something for everyone.

What I find most exciting though is the potential for living infrastructure to revolutionise the hospitality sector. As the Hartman Group study has shown, consumers are wanting more from businesses no matter the size. We are on the precipice of something really big and those brave enough to take the first step will benefit most.


[1] Beatley, Timothy. (2011.) Biophilic Cities: Integrating nature into urban design and planning, Island Press. P.3

[2] Beatley, Timothy. (2011.) Biophilic Cities: Integrating nature into urban design and planning, Island Press. P.6

[3] Joye, Y. et al. (2010.) The effects of urban retail greenery on consumer experience: Reviewing the evidence from a restorative perspective. Urban Forestry & Urban Greening, 9. P.60

[4] Ong, B. (2014.) Urban Greenery: Good for business and liveability. Green Cross Australia. Pp.2-3

[5] Lohr, V. I., Pearson-Mims, C. H., & Goodwin, G. K. (1996.) Interior plants may improve worker productivity and reduce stress in a windowless environment. Journal of Environmental Horticulture, 14. Pp. 97‐100

[6] World Green Building Council. (2016.) Health, wellbeing & productivity in retail: The impact of green buildings on people and profit. P.16

[7] Dwyer, John F., Gregory McPherson, E., Schroeder, Herbert W., Rowntree, Rowan A., ‘Assessing the benefits and costs of the urban forest’, Journal of Arboriculture,  18(5): September 1992, p.229

[8] Clements, J., St Juliana, A., Davis, P. (2013.) The Green Edge: How Commercial Property Investment in Green Infrastructure Creates Value. Natural Resources Defense Council (NRDC) Report. P.9

[9] The Hartman Group, Inc. (2009.) Sustainability: The rise of consumer responsibility. ‘Executive Summary’. January 2009. P.2

[10] Donoghue, A. (2010.) ‘Do customers care’, The Green Hotelier, 15 October 2010. Accessed 4 February 2018.

[11] Donoghue, A. (2010.) ‘Do customers care’, The Green Hotelier, 15 October 2010. Accessed 4 February 2018.

[12] The Hartman Group, Inc. (2009.) Sustainability: The rise of consumer responsibility. ‘Executive Summary’. January 2009. P.2

[13] The Hartman Group, Inc. (2009.) Sustainability: The rise of consumer responsibility. ‘Executive Summary’. January 2009. P.2

[14] Department of Environment and Primary Industries for the State of Victoria. (2014.) Growing Green Guide: A guide to green roofs, walls and facades in Melbourne and Victoria, Australia, Melbourne. P.9

[15] Clements, J., St Juliana, A., Davis, P. (2013.) The Green Edge: How Commercial Property Investment in Green Infrastructure Creates Value. Natural Resources Defense Council (NRDC) Report. P.10

[16] Clements, J., St Juliana, A., Davis, P. (2013.) The Green Edge: How Commercial Property Investment in Green Infrastructure Creates Value. Natural Resources Defense Council (NRDC) Report. P.10

[17] Department of Environment and Primary Industries for the State of Victoria. (2014.) Growing Green Guide: A guide to green roofs, walls and facades in Melbourne and Victoria, Australia, Melbourne. P.8

[18] Clements, J., St Juliana, A., Davis, P. (2013.) The Green Edge: How Commercial Property Investment in Green Infrastructure Creates Value. Natural Resources Defense Council (NRDC) Report. P.10

[19] Clements, J., St Juliana, A., Davis, P. (2013.) The Green Edge: How Commercial Property Investment in Green Infrastructure Creates Value. Natural Resources Defense Council (NRDC) Report. P.10

[20] Clements, J., St Juliana, A., Davis, P. (2013.) The Green Edge: How Commercial Property Investment in Green Infrastructure Creates Value. Natural Resources Defense Council (NRDC) Report. P.9

[21] Clements, J., St Juliana, A., Davis, P. (2013.) The Green Edge: How Commercial Property Investment in Green Infrastructure Creates Value. Natural Resources Defense Council (NRDC) Report. P.35