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
(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
(11) Butler, James. "The Compelling "Hard Case" for "Green" Hotel Development." 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 Extended Bio... retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by

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

OCTOBER: Revenue Management: Optimizing Income Streams Across All Avenues

Klaus Kohlmayr

Technology is having a huge impact on how revenue managers generate and optimize revenues at hotels. At the same time, it’s clearer than ever that the “human touch” is indispensable: Without capable front desk, sales and revenue professionals at the helm, the possibility for generating meaningful ancillary revenue is limited. Equally, with an increasingly demanding and diverse generation of travelers coming to market, it’s critical to be able to match the right kinds of accommodations with the right guests. This article examines the intersection of technology and human interaction in ancillary revenue generation at hotels today – with an eye not only toward enhancing revenues, but building guest experience and satisfaction as well. It pays special attention to the role of upselling, as a central piece to this puzzle. READ MORE

Bill Linehan

Disrupters and brand loyalty are the jargon de jour among retail based industries. Even loyalty is making its metamorphosis into the more descriptive recognition. The jargon is evolving in an attempt to keep pace with its ever-changing environment as brands struggle to gain and retain the fleeting attention of consumers bombarded with messaging. Retail sales is more than the sum of its product. It is a masterful and complex interlinking of imagery and awareness that lead the consumer to purchase and advocate within their social circle. You are what you buy. The hotel industry is a retail based industry and savvy marketers are using retail based modeling to grow consumer’s share of wallet and brand loyalty. READ MORE

Jon  Higbie

Hotels are no strangers to Revenue Management (RM). They were among the first industries to embrace Revenue Management, albeit by focusing exclusively on yield management. Retailers took notice and decided they, too, should employ Revenue Management, but weren’t certain how to do it since they didn’t have perishable inventory like hotel rooms. Instead, retailers zeroed in on price elasticity, giving birth to price optimization. However this time it was hotels that took notice. By the early 2000s, they were swiftly adopting price optimization of room rates and again transforming their industry. While this strategy has paid handsome rewards, it’s time again for hotels to emulate retailers – and even consumer goods companies – if they want to conquer the next frontier of Revenue Management. READ MORE

Stefan Wolf

The act of providing accommodation to travelers has been around for a very long time. But whilst actively selling and marketing hotels and resorts have been going on for some time already, revenue management in that context started only recently. In addition to being a relatively new function in the industry, the scope of revenue management has changed and increased at an incredible speed. In the past, revenue management focused on optimizing RevPAR using the right time, with the right price, right product, for the right customer and with the right channel approach, in isolation of other functions. This is no longer sufficient today. READ MORE

Coming Up In The November Online Hotel Business Review

Feature Focus
Hotel Architecture and Design: Unique, Timeless and Memorable Design
With hotel refurbishments typically taking place every eight to ten years for the soft elements, and every fifteen to twenty years for public spaces and bathrooms, owners and investors rely on architects and designers to get things right. Their solutions must satisfy a targeted demographic, be aesthetically timeless and durable, and fulfill the market’s desire for unique and memorable design. From re-thinking guestroom configurations to constructing dramatic public spaces, an effort is being made to recast hotels as the highlight of any business trip or vacation. In that regard, many architects have chosen to make a striking first impression, with an emphasis on the hotel lobby. These areas are being designed as multi-use spaces to accommodate casual or formal talks, individual or group work, and zones for social activity. Creative space segmentation is required, along with furniture that provides comfort and functionality. More extravagant entrance features also include indoor waterfalls, large chandeliers and multi-media stations. The bathroom is also an area of interest for designers in recognition of guest desires to experience luxury beyond their everyday lives. Spa-like features such as en-suite bedrooms, waterfall showers, over-sized bathtubs, his & hers sinks, giant towels, plush robes, and deluxe beauty items provide the promise of indulgent luxury. Additionally, hotel restaurants can no longer afford to be mere providers of three meals a day and a buffet. Signature restaurants are being designed to offer a genuine "wow" factor to both guests and external patrons alike. Along with sustainability concerns and an increased emphasis on local sourcing, these are some of the subjects in the fields of hotel architecture and design that will be explored in the June issue of the Hotel Business Review.