Mr. Weissman

Eco-Friendly Practices

Top Government Incentives for Greening Your Hotel

By Arthur Weissman, President and CEO, Green Seal, Inc.

Tax(1) incentives that are currently offered by state and local governments fall primarily into two categories: "hard" incentives such as grants, loans, tax breaks, or rebates that are given to developers and their clients by an agency; and "soft" incentives which include expedited plan review, permitting, and training or marketing assistance. The main difference between the two types of incentives is that hard incentives tend to focus more on building new relationships with prospective businesses to ensure resource-efficient facilities, and soft incentives tend to focus more on strengthening existing business relationships with a community to increase public awareness of environmental accountability. One example of a very common soft incentive that many state governments have already adopted is marketing to and encouraging their employees to use facilities for business travel and meetings that are managed in an environmentally responsible manner.

In comparison, hard incentives also tend to be very short-term and performance-based, which means they are awarded only after a developer completes the required design, construction, or operational requirement specified by the program. The extensive adoption of the US Green Building Council's LEED criteria by local agencies as metrics for grants or tax rebates is an example of incentives that are offered for energy, water, and resource-efficient planning and design by developers. The rebate programs from Southern California Edison1 and Pacific Gas & Electric(2) are examples of more long-term hard incentives for environmentally responsible operations and management.

A very thorough and updated listing for Energy Efficiency Incentive Programs available throughout the United States can be found in the North Carolina Solar Center's Database of State Incentives for Renewables and Efficiency (DSIRE)(3). Cities are also starting to offer carbon reduction benchmarking grants to businesses which voluntarily participate in third-party certification programs or other performance-based operational monitoring programs. Additional environmental planning, design, finance, and construction resources for developers can be found on the Green Building Finance Consortium(4) website.

Surprisingly, however, studies by both the American Institute of Architects (AIA) and the National Association of Industrial and Office Properties (NAIOP) have found that developers would rather see more soft than hard incentives offered by agencies. Since many environmental efficiency calculations now require specialized training and assistance from agency staff for businesses(5) and LEED criteria for building design and construction are becoming more popular for new real-estate development projects in the United States, developers are now asking how using environmental incentives will affect the speed at which any given property can come online and begin generating revenue(6). In response to this need by the development sector and to improve their ongoing support for existing businesses, many cities are now streamlining and consolidating their environmental incentives into green business programs.

Green Business Programs of Chicago, Los Angeles, and New York - Examples of Consolidated Government Assistance

In 2008, both the City of Chicago and the City of Los Angeles launched green lodging recognition programs as components of their larger green business engagement efforts; in early 2009, New York City and State have also begun discussions with their lodging associations regarding the benefits of green recognition programs. These cities, like many others which are working to develop city-wide climate action plans, are interested in developing green business programs as a means to re-engage with the local business sector and realize their commitments to the U.S. Conference of Mayors Climate Protection Agreement(7). In addition to recognizing local lodging facilities which are making efforts to adopt environmentally responsible practices, other business sectors covered by the green business programs of Chicago, Los Angeles, and New York also include restaurants, museums, office and retail spaces, and automotive services.

What is unique for each program, as a partnership with the private sector, is that they are making purposeful efforts to consolidate information and resources for their private-sector partners in the following areas: 1) All the business development and operational incentives offered by the various city departments, including economic development, permitting, planning, and environmental compliance for waste, water, and biodiversity preservation;2) Incentives that result from special climate change partnerships between the city and external groups or local utilities; and 3) Local supply sourcing and waste management networks that can help interested businesses realize their environmental goals. (8), (9).

In addition to these city-wide resources, both the Chicago and Los Angeles programs have developed specific marketing incentives within their green lodging tracks where lodging properties seeking certification by a third party receive co-branding opportunities with the city or achieve special recognition within the local market from the city for their environmental efforts. (In the interest of full disclosure, Green Seal is the third-party certification program chosen by Chicago and Los Angeles for their green lodging programs.) In addition to marketing, city employees managing these programs actively work with applicant properties to identify incentives that are most appropriate for the property's environmental compliance needs and goals.

Program managers also have held a series of informational workshops for interested property GM's to ask questions and learn more about the details of participating in the program.

Another potentially soft, but analytically helpful, incentive for participation in either Chicago's or Los Angeles's Green Business Program is access to the online databases that each program is beginning to develop in partnership with the International Council for Local Environmental Initiatives (ICLEI). By using ICLEI's Clean Air and Climate Change(10) software to benchmark applicant lodging properties and other companies, city program managers are beginning to track how the efforts that are being made by resident businesses reduce the overall greenhouse gas emissions output of the city. These databases are similar in design and reporting function as the environmental management and monitoring software systems currently in-use by individual lodging properties and chain brands. Participation within the city programs, where individual property metrics can be uploaded into the CACP database, can also provide an additional marketing analysis tool for property and chain managers who are interested in understanding and adapting their current environmental policies to the metrics used in the cities in which lodging properties are located.

Butler also points out that many of the incentives that are currently available from local governments for energy efficiency will only be around as long as green building standards are not the norm (11) As the incentives disappear, regulations stricter than California's AB32(12) may come into force, and include carbon taxation regimes for businesses operating outside the energy-efficiency targets of the city or state where properties are located.

While many hotels are incorporating environmentally responsible design, construction, and management polices into their operations, additional help for fully integrating environmental construction and management into lodging properties can be sought out from cities like Los Angeles, Chicago, New York, and others which are actively seeking ways to consolidate and package their technical services and fiscal incentives for businesses that share the communities' environmental performance goals. As environmental design and management become the standard, these opportunities are likely to be replaced with stricter regulation and taxation for businesses that do not comply with city, county, or state environmental goals. Why wait until then?

Preliminary research for this article was done by Rani A. Bhattacharyya, Executive Assistant to the CEO, Green Seal, Inc. She holds an M.S. in Recreation Parks and Tourism Management from Western Illinois University and has assisted rural communities in the United States and internationally with tourism development projects.


(1) "Case Studies: Hospitality". Southern California Edison. 12/30/08
(2) "Energy Savings & Rebates". Pacific Gas & Electric Company. 12/26/08
(3) "State & Local Energy Efficiency Incentives". Database of State Incentives for Renewables and Efficiency (DSIRE). NC Solar Center. 12/30/08
(4) "Section 11: Gov. Regulations and Incentives & Section 50.5 Trade Groups: Real Estate". Industry Resources Webpage. Green Building Finance Consortium (GBFC). 12/26/08
(5) "Local Leaders in Sustainability". The American Institute of Architects. 12/15/08
(6) "Green Building Incentives That Work: Look at How Local Governments Are Incentivizing Green Development". For The National Association of Industrial and Office Properties Research Foundation (NAIOP) By Yudelson Associates 12/10/08
(7) "The U.S. Conference of Mayors Climate Protection Agreement". The U.S. Conference of Mayors. 01/09/09 http://usmayors.org/climateprotection/agreement.htm
(8) "Where We Have Been". Chicago Climate Action Plan. City of Chicago. 01/09/09
(9) "Proposed City of Los Angeles Certified Green Business Program." EnvironmentLA. City of Los Angeles. 01/08/09
(10) "CACP Software". ICLEI. 01/08/09 http://www.icleiusa.org/action-center/tools/cacp-software
(11) Butler, James. "The Compelling "Hard Case" for "Green" Hotel Development." Entreprenur.com. Cornell Hospitality Quarterly. 01/09/09.
(12) "California Global Warming Solutions Act of 2006". State of California. 01/09/08.

Arthur B. Weissman, Ph.D., is President and CEO of Green Seal, Inc. He has experience in environmental science, policy, and standard-setting in public and private sectors. He has led the non-profit's resurgence as a force to make the economy more sustainable. He served as an international convener in developing the ISO 14000 standards for environmental labeling, and was the first Chair of the Global Ecolabeling Network. He has developed policy for the Superfund waste-cleanup program, served in the U.S. Senate as a Science Fellow, and worked for The Nature Conservancy. Mr. Weissman can be contacted at 202-872-6400 or aweissman@greenseal.org Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.

Receive our daily newsletter with the latest breaking news and hotel management best practices.
Hotel Business Review on Facebook
General Search:

NOVEMBER: Hotel Architecture and Design: Unique, Timeless and Memorable Design

Samuel J. Cicero Sr.

No matter how glamorous, there comes a time when every hotel requires renovation. Years of wear and tear, new fashion trends, and shifts in technology can prematurely age a property, leading to customer complaints and the need to lower room rates to remain competitive. Also, in this age of social media and online reviews, an aging property means lost revenue as travelers increasingly turn to the Internet for advice and not the hotel’s website. READ MORE

Patricia  Lopez

Guestrooms are getting smaller. With trendy micro and capsule hotels on the rise, brands everywhere are working with designers to shave off square footage and conceptualize new and improved layouts that use space more efficiently. But designing a versatile room is only functional to a point. If you want to create a space that responds to your guests’ needs without compromising the elements that turn a simple hotel stay into a luxury, then you have to strike a balance between tradition and innovation. And it all comes back to the art of crafting an experience. READ MORE

Pat McBride

The designs of the most renowned hotels and resorts give careful consideration to every aspect of a guest’s experience. This is no small task – the design team leads the way to ensuring a property has everything it needs to offer a memorable, comfortable and relaxing stay for customers, which ultimately determines the success of a property. Complicating matters is the fact that designers very rarely need to consider just one type of customer – there are honeymooners, young families, empty nesters, groups of friends and wedding parties to consider in the design process. The task of designing for still another subset of customers – business travelers – presents an interesting but surmountable design challenge. This is a group growing more and more accustomed to mixing business with leisure. Designing a property that appeals to business travelers, a critical source of revenue for many properties today, requires its own set of considerations that must be weaved seamlessly throughout the design of the property, from meeting and conference spaces to restaurants and guestrooms and beyond. READ MORE

Patrick Burke

Encompassing over 3.5 million square feet with a price tag of $4.4 billion, Resorts World Sentosa is one of the world's largest multi-recreational luxury parks. A city-within-a-city, the resort features six hotels, offering a total of 1,840 rooms; a large casino; a convention center, including a 7,000-square-meter ballroom, conference and meeting facilities; a multitude of theaters and entertainment facilities; a maritime museum, a large marine animal park and water park; a world-class spa and extensive retail stores and restaurants. Anchored by Universal Studios Singapore, the project required a design approach that would celebrate the unique site in a very special way. READ MORE

Coming Up In The December Online Hotel Business Review

Feature Focus
Hotel Law: Legal Issues Looming Large in 2015
In an industry where people are on-property 24/7/365, the possibilities are endless for legal issues to arise stemming from hotel guest concerns. And given the sheer enormity of the international hotel industry, issues pertaining to business, franchise, investment and real estate law are equally immense. Finally, given the huge numbers of diverse people who are employed in the hospitality industry, whether in hotel operations or food and beverage, legal issues pertaining to labor, union, immigration and employment law are also significant and substantial. The expertise of all kinds of specialists and practitioners is required to administer the legal issues within the hotel industry, and though the subject areas are vast and varied, there are numerous issues which will be in the forefront in 2015 and beyond. One issue that is gaining traction is how hotels are dealing with the use of marijuana by employees, given its ever-changing legal status. The use of marijuana is now legal in 21 states and the District of Columbia for certain medical conditions. Two other states, Colorado and Washington, have legalized recreational marijuana use for individuals who are 21 years old or older, and Alaska and Oregon currently have similar legislation pending. Most state laws legalizing marijuana do not address the employment issues implicated by these statutes. Therefore, it is incumbent on all hotel operators to be aware of the laws in their states and to adjust their employment policies accordingly regarding marijuana use by their employees. Other issues that are currently looming large pertain to guest identity theft by hotel employees and the legal liabilities which ensue; issues of property surveillance versus a guest’s right to privacy; and immigration reform could also be a major compliance issue. The December issue of Hotel Business Review will examine some of the more critical issues involving hotel law and how some managers are addressing them in their operations.