Hotel group sees hospitality as a powerful force for good

Significant dates related to sustainability were observed around the world over the past month, including World Environment Day, World Oceans Day, and Biodiversity Day. These events highlight the increasing influence and impact of ESG (Environmental, Social, and Governance) factors in today's global landscape. ESG has become a focal point in international discussions, exemplified by recent events such as the 2024 Summer Davos in Dalian.

China, in particular, is taking significant strides in this area, as evidenced by the re-emphasized dual carbon goals set by the government. The goal is to establish a unified national standard by 2030, a testament to the country's ambitious yet clear commitment to ESG.

Hilton, a global leader in the hospitality industry with over 7,600 properties worldwide, has taken a significant step with the release of its 2023 "Travel with Purpose" report. This highlights the company's dedication to ESG practices, showcasing its commitment to having a positive impact on the environment, society, and governance within its operations and beyond.

We interviewed Jean Garris Hand, Vice President, Global ESG, Hilton, about the report.

Q: What was the progress in 2023 compared to previous years, and could you share Hilton's global ESG strategy behind these results?

A: Hilton was founded more than 100 years ago on the belief that hospitality can be a powerful force for good. Today, we continue to be inspired by this belief and guided by our responsibility to positively impact the destinations and communities where we operate.

Our efforts are guided by our global Travel with Purpose strategy and 2030 goals, which helps us drive responsible travel and tourism globally.

We are focused on reducing the environmental footprint of our hotels through efforts that reduce the use of watts (energy/carbon), water and the generation of waste while having a positive impact on our communities. According to our 2030 goal, there are going to be 5 million cumulative learning and career growth opportunities, meaningfully impacting 20 million community members and contributing 10 million volunteer hours.

Not only is Hilton's Travel with Purpose strategy authentic to this core belief of the positive power of travel, but we have also worked to make our targets ambitious. These 2030 targets are specific, measurable and validated by third parties such as the Science Based Targets initiative (SBTi) and aligned with the United Nations Sustainable Development Goals (SDGs), ensuring we can realistically meet our commitments to reduce our carbon emissions, create opportunities within our communities and do all this with accountability, integrity and transparency.

Travel with Purpose is integrated through every aspect of our business, including our operations, our supply chain and our engagement with our communities, in line with our shared vision "to fill the earth with the light and warmth of hospitality." We recently released our Travel with Purpose annual report, sharing our achievements and progress towards those 2030 goals. For example, we achieved a 26.5 percent reduction in water intensity from a 2008 baseline for managed hotels as of the end of 2023. We also impacted more than 5.48 million community members since 2022 and achieved more than 2.5 million total reported volunteer hours since 2017, including more than 377,000 in 2023.

Q: How do different regions localize their efforts under Hilton's global ESG strategy, and could you share some key initiatives that promote innovative and sustainable development?

A: As a global hospitality company, Hilton operates in local communities around the world, serving as local engines of opportunity for economies and the people that live there.

I have the pleasure of leading a global team of ESG professionals, who are embedded within the APAC, EMEA and Americas regions. This team works with hotel team members directly around the world to bring Travel with Purpose to life through a number of tools, resources and guidance that help them lower their environmental impact, increase their social impact or operate with more transparency.

For example, we're providing activation guides that help them reduce food waste, make informed architecture and design decisions and source from local or other small businesses.

In 2022 and 2023, we implemented the Travel with Purpose pledges in the region, supporting and recommending actions that hotels can take to make progress on our environmental and social goals. We established a consistent framework for the APAC region and each sub-region. These efforts are driven by a passionate network of Travel with Purpose regional champions, who are general managers of hotels focused on mobilizing their peers to make progress on our TWP 2030 Goals.

To support innovative and sustainable development, in 2022, Hilton announced a new commitment to venture capital fund Fifth Wall's Climate Tech Fund that will invest in software, hardware, renewable energy, energy storage, smart buildings and carbon sequestration technologies to decarbonize the US$10.5 trillion real estate industry.

Q: Please share your views on the achievements of ESG practices in China and your insight on the trend for future ESG development in the world.

A: Our hotels across China remain focused on their sustainability and social impact efforts. Today, they have a focus on reducing food waste, engaging with Hilton's industry-leading Meet with Purpose program and creating employment opportunities for youth and those with disabilities.

Despite our progress, we know this is a journey we cannot take on our own. Hilton is committed to partnering with governments, industry partners, owners, investors and guests. In Hilton's 2024 Trends Report, we've seen that travelers are increasingly prioritizing the purchase of experiences and are choosing to travel to learn about other cultures. In addition, two-thirds of travelers surveyed admitted that the subject of environmental change can be overwhelming as they consider their vacation plans. That's why we strive hard to continue making more sustainable choices available to our guests. As China is a key growth market for Hilton, we remain committed to driving responsible travel and tourism in this part of the world, leading the way in the hospitality industry to create positive environmental and social impact in the destinations where we operate.

Q: From an economic perspective, how will a company's ESG efforts contribute to promoting its future growth and the healthy development of its business models within the enterprise?

A: More than ever, guests are looking for brands that are embracing purpose and doing good for both people and the planet in the destinations where they travel. Hilton recognizes that the success of its business is linked to its ability to meet the expectations of guests while continuing to operate and grow sustainably.

In the hospitality industry, we often talk about the concept of "destination stewardship," which is based on the responsible use of resources that make up the destination, such as natural habitats, historical monuments, water and energy, etc. In other words, it's about encouraging responsible travel in a way that ensures the destination is protected for generations to come, so that hospitality companies as well as local communities can continue to benefit from tourism to the area. For the private sector, the benefit of this approach is that it strengthens business resilience, whether it's preserving products and investments in the destination, having positive community relations or having more resilient supply chains. For us to achieve our goals for destination stewardship, we cannot do it alone and need to work hand-in-hand with local governments, investors, industry partners, owners and guests.

Environment Protection and Green Supply Chain in China

China's State Council's action plan for 2024-25, announced on May 29, set ambitious targets for energy conservation and carbon reduction. The plan aims to decrease energy consumption and carbon dioxide emissions per unit of GDP by approximately 2.5 and 3.9 percent, respectively, reflecting the government's commitment to a greener and more sustainable future.

In this landscape of regulatory and market-driven demands, companies are stepping up their research and application of clean energy and low-carbon technologies. The transition towards renewable energy sources such as solar and wind power, along with the promotion of energy-saving technologies and equipment, is not just an environmental imperative but also a strategic business decision that enhances operational efficiency and reduces long-term costs.

In hospitality industry, an example is the Hilton Dalian Golden Pebble Beach Resort, where the installation of solar water heating systems has led to an impressive annual reduction of over 2 tons of carbon emissions. This initiative stands as a testament to the profound impact that such targeted efforts can have.

Conrad Tianjin, a Hilton brand hotel owned by CGDG, has improved the efficiency of its restaurant exhaust hoods through the implementation of an intelligent control system. This innovation has yielded annual electricity savings of over 220,000 kWh, underscoring the brand's continuous pursuit of sustainability.

As an effective measure to reduce carbon emissions in transportation and logistics, environmental protection measures can be greatly echoed by local suppliers and responsible conduct. In China, Hilton's sustainable seafood reached to 2.8 percent of total procurement costs in managed hotels in China by April this year. And Hilton is further expanding its purview to encompass a broader spectrum of recognized certifications, thereby enabling hotels to engage more extensively with local suppliers offering sustainable seafood and cage-free eggs.

Moreover, the embrace of artificial intelligence (AI) by the hospitality sector marks a significant leap into an era where operational excellence and guest experiences are fundamentally redefined.

The adoption of Winnow's AI technology is a case in point, offering a solution that accurately measures and mitigates food waste, allowing for more informed decisions in food preparation and production, currently at Conrad Shanghai and the Waldorf Astoria Shanghai on the Bund.

Consumer Advocacy Measures

The imperative to address environmental pollution and climate change is resonating with an increasing number of consumers who are recognizing the importance of environmental stewardship.

The 2023 Green Travel Trends Report by Ctrip found that over 70 percent of travelers consider green travel important, indicating a significant trend towards sustainability in travel choices. This trend is characterized by a heightened sense of responsibility, a willingness to pay for green options, and an expectation of a diverse range of sustainable travel choices. Travelers are progressively incorporating green travel into their daily routines, travel planning, and consumption habits.

Despite the positive momentum, the journey towards green travel is not without its challenges. Travelers are cautious about the additional costs associated with green travel and are still in the process of turning their positive attitudes into concrete actions. Moreover, there is a demand for improvements in green travel products on OTA platforms, with nearly 90 percent of travelers anticipating better product identification, a wider range of options, and improved cost-performance ratios.

In response to this cautious yet optimistic approach, the hospitality industry, including Hilton in China, is integrating sustainability into the core guest experience. Hilton's commitment to sustainability is evident through various initiatives such as reducing plastic and waste, advocating for low-carbon travel, and providing sustainable activity plans.

Hilton has taken a pioneering step in reducing plastic use by implementing the Digital Key system, which has saved around 100 tons of plastic annually by eliminating the need for plastic key cards. This system not only reduces single-use plastics but also enhances the guest experience by providing a seamless and eco-friendly way to access rooms. As of May, over 130 Hilton hotels in China offer Digital Key to guests.

Furthermore, Hilton's Meet with Purpose program invites guests to plan meetings and events that are considerate of the environment. This program allows for the orchestration of events with every detail, from low-carbon menu options to waste reduction strategies, thoughtfully designed to minimize the environmental impact.

In 2023, China's new energy vehicle (NEV) market continued to thrive, reflecting the growing advocacy and acceptance of low-carbon travel. The production and sales figures for the year reached an impressive 9.587 million and 9.495 million units, respectively, with a significant year-on-year increase and a robust market share of 31.6 percent. This surge underscores the public's inclination towards sustainable transport options.

The extensive growth of the NEV market is also mirrored in the hospitality sector's efforts to support eco-friendly practices.

Hilton, for instance, has made it easy for guests to embrace low-carbon travel by providing electric vehicle charging stations at over 1,800 of its properties, including nearly 150 hotels in China as of May.

This commitment by Hilton aligns with the broader trend in China, where the cumulative export volume of cars also saw a substantial increase of 57.9 percent year on year, indicating the country's significant role in the global automotive industry. The power battery production for these vehicles has also been on the rise, with a total of 545.9 GWh in 2022, showcasing the industry's readiness to meet the growing demand for sustainable travel options.

Integration with Communities and Local Culture

With hotels operating in more than 210 destinations in China, Hilton's ESG commitment also extends to local educational initiatives, such as the "Hilton Class" set up by Hilton Foshan, which offers training and internships to students from ethnic minorities, helping to cultivate local talent and bolster the tourism industry in Guizhou Province.

In Jiuzhaigou, Hilton has established the "Xi Ai Home" marketplace in collaboration with the Jiuzhaigou County Disabled Persons' Federation. This initiative supports differently-abled artisans by providing a platform to sell their handcrafted products, generating over 100,000 yuan in income for more than 100 beneficiaries in the past year.

Additionally, Hilton's Tibetan Family Experience program has transformed local Tibetan hotel team members' homes into guesthouses, offering visitors a unique cultural experience while providing a sustainable income for local families and preserving Tibetan traditions. So far, the two families have received hundreds of guests from different cities and countries, increasing their income while preserving and promoting local Tibetan culture.

The hospitality industry's embrace of ESG principles marks a significant shift towards sustainability and responsible business practices. With increasing regulatory pressures and heightened consumer awareness, hotels worldwide are prioritizing initiatives such as carbon footprint reduction, waste management improvement, and community engagement.

"As China's tourism industry recovers, we will continue to provide guests with diversified stay experiences while joining hands with owners, team members, guests and various parties to explore more localized and effective ESG practices. Together, we are going to leverage the powerful force for good of hospitality to contribute to the high-quality and sustainable development in the tourism industry and society," said Jin Qian, President of Hilton China and Mongolia.