Green Hotels = Big bucks for LOHAS

Written By Jeff Siegel

Posted August 18, 2005

Dear Wealth Daily reader:

Green Hotels equal big bucks for commercial LOHAS markets

I was first introduced to the world of sustainable travel back in 1997 while on a weekend trip to the Berkshire Mountains in Massachusetts.

My cousin was getting married at a local hotel/resort located in Stockbridge. The place was magnificent!

The hotel had been around since the early 1900s, and boasted an authenticity through a meticulous attention to detail. From furnishings to renovating and building materials (using the same variety of wood from local timber) to working fireplaces used to heat the lobby and dining rooms.

Of course, the charm of this place isn’t really the issue here.

You see, this particular hotel operated within the boundaries of LOHAS demands.

It was self-sustaining, natural cleaning supplies were used by the housekeeping staff, the kitchen only prepared organic meals using local produce and meats when possible and the grounds were kept in pristine condition without the use of harsh fertilizers and chemicals.

Understandably, I was more than impressed. Though after having a ‘sit-down’ with the proprietor – a great grandson of the original owners, I quickly learned that this particular hotel was not alone in the way it operated. In fact, at that particular time, there were nearly 100 hotels and lodges in the U.S. (almost all independent) operating within the same parameters.

But now here we are in 2005, and the world of ‘Green Hotels’ is no longer the domain of the independent and family-owned operators. In fact, some of the world’s largest hotel chains have not only embraced the philosophy of ‘Green Hotels,’ but in some cases – even reinvented the concept.

Take for instance the Rittenhouse Square Hotel in Philadelphia.

This 193-room, eco-friendly hotel is a LOHAS traveler’s dream – touting a 40-foot-high bamboo garden to oxygenate the air in the lobby and individual air filtration systems in every guest room.

The hotel also features recycled glass and aluminum for its room number signs, recycled granite for its countertops and flooring and recycled glass tiles for its front desk. All the beds are ‘organic sleep systems’ made from 100% organically-grown cotton (as well as the linens, draperies, bedspreads and upholstery), the hotel restaurant serves organically-grown vegetables and natural shampoos and soaps are used in the bathrooms.

The Rittenhouse Square caters to business clientele too…providing interactive conference rooms, high-speed internet and fully-functional work stations.

I’ve been to the Rittenhouse, and was more than impressed. But that’s not my reason for telling you about it today.

You see, it’s no secret that hotel chains spend big bucks on commercial contracts. From cleaning supplies to food service to lighting, fixtures, furniture and waste disposal – the hospitality industry spends billions every year.

But when it comes to operating a green hotel, especially like the Rittenhouse Square – conventional suppliers are of no use. And that leaves some explosive potential for LOHAS suppliers.

Of course, green hotels still only represent a small percentage of all hotels and lodges in North America. But like I’ve said a thousand times before – this is only the beginning. And if you look closely, you can actually see many more hotels – although subtly – using some of the very basic techniques Green Hotels have used for years.

Surely you’ve seen those signs posted in hotel bathrooms asking you to help them conserve water by using the same towel more than once or not requiring a changing of sheets every day.

Though don’t get the wrong idea. This isn’t just about being warm and fuzzy, claiming a concern for water conservation efforts.

This is about reducing operating costs and increasing profits. A win-win situation for hotel operators and LOHAS consumers.

But conserving water by decreasing laundry loads is just the tip of the iceberg. A number of major hotel chains are now starting to incorporate all kinds of LOHAS-based systems and techniques to reduce operating costs. From installing low-flow shower heads to using energy-efficient, compact fluorescent lights to utilizing solar-powered energy systems to heat and provide electricity for the hotel’s daily operations.

In fact back in February, Starwood Hotels & Resorts (owner of Sheraton Hotels & Resorts) entered into an agreement with FuelCell Energy (FCEL:Nasdaq) to provide the framework for fuel cell power plant projects for Starwood’s hotels.

On June 13, 2005, Starwood Hotels & Resorts dedicated Manhattan’s first high temperature fuel cell-powered electric plant – a 250-kilowatt system developed by FuelCell Energy and operated by PPL Corporation (PPL:NYSE). The system was to supply 10 percent of the hotel’s electricity and hot water needs as well as back-up electric service for a portion of the hotel.

Green Chip investors who acted on this news in early June were up more than 20% in 30 days as FuelCell’s stock price shot up from $8.63 to $10.48 following the announcement and well-orchestrated PR campaign.

Of course, this is just one example of how the sustainable travel industry can make investors a lot of money. And mind you, we’re just talking about one particular hotel chain embracing the LOHAS marketplace.

Sustainable travel is much bigger than just ‘green hotels.’ It’s a far-reaching concept and philosophy that embraces every segment of the tourism industry with guidelines and criteria that seek to reduce environmental impacts and contribute to sustainable development and environmental conservation.

And with an estimated worth of nearly $77 billion – there’s no question that sustainable travel is truly one of the giants in the LOHAS marketplace.

I’ll have a full report on the sustainable travel industry next month. Until then, keep a close eye on organic cotton, as organic bedding used by ‘green hotels’ is primarily manufactured with certified organic cotton.

And before you brush aside the concept of organic mattresses, think about this…

Last year, at an upscale organic furniture store in New York, over $5 million worth of organic mattresses were sold. This is one single organic furniture store catering primarily to the consumer marketplace. Now think about these kinds of numbers on the larger scale of commercial orders for hotels and lodges.

It’s estimated that the sales of organic mattresses and pillows are expected to grow at an average rate of 15% over the next 5 years.

Until next time…

Jeff Siegel
Editor, Green Chip Stocks

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