Hilton has 5,500 hotels worldwide, with another 2,700 properties in development. And Hilton plans to make all of them sustainable and is very well on its way. Paulina Bohdanowicz-Godfrey, Senior Director of Energy & Environment EMEA at Hilton, joined Marina Franolic for the fifth episode of the IDEEA podcast.

In their conversation, Paulina shed light on the pillars of Hilton’s ESG strategy called Travel with Purpose and the accelerated progress the hospitality group is making towards its 2030 goals. There are so many vital insights she shares as a teaser to her panel session at IDEEA with other sustainability leaders on day two of the forum.

Marina also asked Paulina to shed some light on Hilton's top-class sustainability initiative, LightStay. The group launched LightStay in 2009, so its managed and franchised hotels could report energy, water, waste and social impact data (including volunteerism and food donations) every month. Over the years, Hilton’s LightStay platform has gained three International Organization for Standardization (ISO) certifications for quality, energy and environmental management.

There is no silver bullet for sustainability, but when asked to name some quick wins for hotels to adapt, a top one was awareness and behaviour. Without a full buy-in across its hospitality ecosystem, the goals will fall short of their mark. After the fanfare of sustainability initiatives, many tend to return to their old behaviours and routines. Hilton is ensuring it does not succumb to that egging on even travel managers for corporate clients to input ESG data into Lightstay for a better view of their environmental impact.

This 30-minute conversation is worth watching or listening to if sustainability in hospitality is your tea.

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TRANSCRIPT

Intro 00:00

Welcome to the IDEEA Podcast, a channel for the IDEEA Hospitality Investment Forum, which is an annual gathering for the Hospitality Investment Community in Eastern Europe. Tune in to insightful conversations between the IDEEA team and hospitality investment leaders and innovators across Europe. And now let's dive right into today's episode.

Marina Franolic: Hello everyone, and welcome to one more edition of IDEEA podcast. So we're lining up our speakers for the event that we will be having in Athens on September 26th and 27th. Today with us we have Miss Paulina Bohdanowicz-Godfrey; she's a senior director, Energy and Environment EMEA from Hilton. Paulina, it's a great pleasure to have you here with me today. Welcome!

Paulina Bohdanowicz-Godfrey: Thank you so much Marina and welcome to our listeners.

Marina Franolic: Paulina, we chatted just a little bit before and I am impressed by what you just said. So we've been talking about ESG for a couple of years now. It's been all in all the media, everyone wants to align with some type of ESG path. But you just said that you've been working with Hilton for the past 20 years. Can you please just share with us a little bit of your background, how you started, how it felt at the beginning, but also how you feel now when everything that you have been doing for the past 20 years is so much in focus?

Paulina Bohdanowicz-Godfrey: Of course! Thank you so much, Marina. Yes, I have been connected to Hilton for about 20 years now, coming from a university research background. And indeed, it has been a fantastic journey for me across sustainability across the years. And at the moment, it's an absolutely amazing time hearing everyone talking about environmental, social, and governance, and everyone wanting to be engaged and involved and actually caring about it. As a company, our trouble with purpose as a strategy for environmental, social and governance has been launched a decade ago. But our legacy in working with various aspects of sustainability dates quite a bit longer than that. We'll probably talk about light stay that has been born nearly 20 years ago in its previous forms. But something that I have found being an archivist by profession, almost, I have found one of the first memos that have that have been released to engineering departments across our Hilton International portfolio, and asking them to be very mindful about energy, looking at energy efficiency and energy conservation. And that memo dates back to mid-1970s. So yes, as a company, we have been engaged, we have been carrying for many, many years. But now is really the time when everything is taking off with engagement across the board, across our hotels, our partners, our owners, and also our customers.

Marina Franolic: I have to say, even now, when you said that again, it is impressive. I know how many companies are just bringing sustainability or ESG Directors. So being aware that you've been thinking about energy conservation for the past what, 40 years, impressive!

Paulina Bohdanowicz-Godfrey: It's a never-ending journey. There's always new technologies, new solutions, new ways we can do things; and also, human behavior is such an important factor. And we need to keep being reminded of what it is that we should be doing.

Marina Franolic: At this stage, really all I can say is congratulations. But let's talk about what Helton is also doing now in regards to energy, in regards to sustainability, to social and governance elements as well. Hiltons ESG strategy is called Travel with Purpose and its strategy to drive responsible travel and tourism globally. Can you tell me a little bit what are the pillars of this program?

Paulina Bohdanowicz-Godfrey: Of course, as you said, travel with purpose is our ESG strategy. We have launched it about a decade ago, as I mentioned earlier. We then launched our 2030 goals in 2018, and we have just updated our goals in order to build on all the progress and impact that we have already made, but also to ensure that Hilton continues to evolve our ESG strategy, in line with how the climate science and best in class programs are changing. So we have three pillars. We have environmental, social, and governance pillars.

The environmental pillar, our priority is really paving the way to net zero. And we want to continue doing it by focusing on climate action, as well as destination stewardship. And we will continue to advocate efficiency and reduction of use of natural resources within something that we call WATS water and waste. And in our WATS or in our carbon journey, we are aligned with science-based targets. We have first set our science-based targets in 2018, but we have just updated them this year to commit to 75% reduction in carbon emissions from our managed portfolio which aligns us with 1.5 degrees scenario. And we also updated our goal for our franchise portfolio to the well below two degrees by 2030. You may ask, what about the rest? So we also have a goal of [inaudible 06:56] having our water consumption, and [inaudible 06:59] the ways that we send to landfill by 2030, comparing ourselves to 2008. And if you ask how we are doing, we are about halfway through achieving our goals.

Marina Franolic: That's exactly what I wanted to say. So you still have eight years, which it seems like a long period, but actually it's very small ones, especially because you don't own your hotels, you need to remind all different owners and investors. So you're halfway there?

Paulina Bohdanowicz-Godfrey: We are about halfway there. But we have action plans and we continue to develop tools for our hotels to keep moving forward in our goals. One of the things that we have done in EMEA region to help us achieve our carbon emissions, is to have about a third of our managed hotels procuring renewable electricity, which allowed us to reduce our carbon emissions by about 10%. But of course, we will focus on our efficiency and reductions in energy use and other resources. And we do that by having every hotel having its individually set target on an annual basis that the teams are working towards. And the heads of engineering departments in managed hotels are actually targeted on achieving those targets. So we believe we have a good strategy and good structure on how to achieve that. But that's environmental, we still have social and governance. If you want me to talk about those.

Marina Franolic: Well, I just want to touch a little bit -- The thing is, we are in hospitality, social and governance is very important. But I definitely would like to focus a little bit more on this E and the environmental because it seems that this is somewhere where we're coming to a point where maybe we won't be able to turn around so it feels like it's a little bit more urgent. I wanted to ask you something you have ESG strategy called travel with purpose, but you also have the ESG management platform called LightStay. So how does this work?

Paulina Bohdanowicz-Godfrey: Okay, so you can't act unless you measure and monitor what you're doing. So very early in our careers or in our journey towards sustainability we decided to develop a platform that will allow us to monitor performance of our properties. The platform in Current form was launched in 2009. But I will be slightly biased, I've worked on its development for nearly two decades. So my opinion, as I said, may be quite bias. How does it work? Well, light stay is best in class, cloud-based environment, sustainability or ESG management platform that all of our hotels have access to. It is also a brand standard for all of our properties. It does allow us to not only track and report on any ESG related aspects, but also analyze performance of our properties, and informs us how are we progressing against our 2030 goals. Light stay and our work with LightStay is also a support to our certification to ISO 14,001 and ISO 50,001 certification. And LightStay has also been recognized by global sustainable tourism council, which we all know is a gold standard of ESG certification in the tourism sector. So what is LightStay, apart from being a cloud platform? Well, LightStay allows our hotels to report their sustainability features, as well as social priorities. And those could range from building features, building characteristics such as level of LED lights, or on-site renewable energy, all the way through various controls that may be employed, levels of training of our team members, behavioral practices, as well as additional certificates and awards achieved by the properties. And then on a monthly basis, we asked our hotels to report on their environmental and social performance, whether it's utilities, whether it's social or volunteering events, whether it's team member engagement and team member training, as well as various projects that our hotels are asked to always an energy, water and waste improvement projects, and LightStay, they can also provide them ideas on which areas of improvements would be best for the property. A very unique feature of light state is that it can actually provide forecasts of utility performance per hotel per month, based on occupancy, past performance and weather factors. So the hotel could check, how are we doing not only against our annual targets, which every hotel has, but also they could check their performance against the forecast considering occupancy considering weather or they could check they could be able to verify whether the projects that they have implemented are making a difference compared to the forecast. So there are quite a few unique features. And as I said, every hotel uses it; we also use it to communicate with our customers. As part of our meet with purpose program, we are able to calculate environmental footprint of every meeting that happens in our hotels. And that covers carbon energy, water and waste food, waste footprints or impacts with our sales teams are able to provide to our customers and should they decide we can even make it a carbon neutral meeting through our partnership with South Pole who is the company that provides us with carbon certificates for gold and carbon verified type projects which are located in destinations that are also important for us. So it's a very comprehensive tool. There is quite a lot of environmental but also social features that the hotels can report; and as such LightStay is our governance tool as well.

Marina Franolic: Well that's actually very interesting when you say that you can measure the how every meeting effects because this is also what we at Bench are working now. Now we're putting down the document we will be sharing with our suppliers with our partners. In the future, we want to make sure that our events if they're not carbon neutral, at least we follow and we know how much we use, we spend, and maybe how we can return. We also want our delegates to be aware of how on one side travel is not, I would say energy efficient, really. But then if you actually travel, but you travel in a way that you will combine more meetings, in one travel instead of traveling more times, you actually are succeeding both in your business, but also on saving the planet. That Polina I wanted to ask you when you're talking about LightStay? So do you are properties able to compare between each other? And do you have some -- you set a target, and then a property actually exceeds it a lot? Do you encourage them in some way to be more efficient? I'm aware that we all understand, we need to be more energy efficient, but sometimes, that's not always easy, easy task. So do you encourage them? Do you give them the maximum amount? And then you say, you know, if you do this, again, actually you'll have to be out of the Hilton brand, because you just don't comply with our standards. So it's not the best way. But how do you actually communicate and encourage them and do again, with initial question, are they able to compare each other within the Hilton brand?

Paulina Bohdanowicz-Godfrey: Of course! Well first of all, we focus on individual properties and we focus on encouraging them to improve their performance, hence, individual annual goals; because every hotel will, will tell us that they are unique. And to large extent, yes, every hotel is unique, because they have different features. Hence, it's best to compare their own performance to their performance from previous years or months. And that also encourages continuous improvement, which is one of the key elements of Certification to ISO, and any good practice. Having said that, we do have a feature that allows the hotels to compare themselves to their peers. And by peers, we mean hotels that we use, use some research with the US Department of Energy to find the best classes of the hotels, which may be per brand, but it may actually be per type of the hotel, how many rooms what the floor areas are. So it's not necessarily straightforward by the brand. But yes, we do allow them to compare themselves to their peers. In terms of minimum and maximum performance, no, we have not gone there, we believe that encouraging them to have a continuous improvement process, at this point in time is still the right thing to do. Whether there will be or we will be looking at what are the limits? I think it's always a point of discussion, we always want to improve the way we do things, but at the moment, individual targets, as well as providing our hotels with tools on what they can do to improve if they don't have any ideas. But they have loads of ideas as well. So I think best practices, various tools for verified energy, ROIs, innovations that are coming from our [inaudible 19:03] process that have been tried and tested in our hotels, and having open conversations that the hotels can have with their owners, looking long term and thinking long term, that's probably best on how we can do that. And in terms of encouragement, yes, in EMEA region, among our managed portfolio, we actually have a recognition program called driving value, where energy, water, waste are some of the factors that the engineers are measured on. And obviously they have targets for it. And we do recognize best performers within this program. So yes; and as I said earlier, our engineers are actually also internally measured on their performance within the light state space.

Marina Franolic: And tell me Is there any country or countries in Europe where you see that hotels actually give more attention to energy consumption? And I assume you're gonna say Northern Europe, but I'll leave it to you. I'm really interested to hear.

Paulina Bohdanowicz-Godfrey: It really depends on destinations and individual assets. Each of them has different opportunities for improvements. And we will celebrate all the successes regardless of the locations. The drivers that are there are typically legislation requirements, that will definitely be something that the owners/developers will look at as a first priority. And it, I would say, is probably the most compelling driver for engagement. However, we have seen that the engagement and personal priorities of owners and developers could make an immense difference in how the projects, especially new projects are being developed, but also how existing properties are being supported by the ownership. And we've also seen in operational hotels, the engagement and passion of an individual, whether it was the Director of Operations, an engineer, or someone else from the team that was passionate about Sustainability and Environment. The moment they had the right support structure behind them, we've seen absolutely amazing results and how big of a difference they were able to make. So I think I wouldn't say there is a country, I would rather call out individual hotels, ownership groups, developers and individuals that are driving it with their own passion and their own priorities.

Marina Franolic: Since you did mention individual hotels, I would like to point out that The Spring is part of the Hilton so Hotel Marcel: New Haven, which is part of the tapestry collection by Hilton is the first NetZero Hotel opened in US. Can you share with us maybe a little bit of technology that has been used to achieve this amazing goal?

Paulina Bohdanowicz-Godfrey: Of course! Yes, we are very, very proud to have the Hotel Marcel: New Haven among our tapestry portfolio, tapestry collection. And we do believe indeed that it is the first NetZero operations hotel that has opened in the US. The way the person behind it, the driving force behind it, Mr. Bruce Beckett talks about it, he wanted a building that doesn't use any fossil fuels in its operation. So it's fully electrically driven. There is over 1000 PV collectors on the roof and on the parking canopies of that hotel, that help provide electricity that is required. There is also a very big battery storage on site but it's not everything. You know, providing renewable energy is one thing. But before we do that, it's really important to make sure that the building is optimized. And they have done that looking at passive methods, such as the wall thickness, or having very efficient windows in order to stabilize temperatures indoors and reduce the demand, but also using various innovative solutions within the property. And something that they are calling out is Ethernet lighting, which means it's a low voltage system that provides lighting but runs on less power than traditional wiring. The other element that is being called out for that property is regenerative braking technology for lifts which means that when the lift is descending, it's actually generating electricity, which can then be used to to help the lift ascent. And those are the technologies that we've also seen in our hotels here in this region. So yes, there is technology there, but also what the team is looking at is could we develop our operations in a slightly more efficient and effective manner. So I've heard that the culinary team is looking at developing lower carbon menus that would potentially reflect fewer fried foods and meals that require warmers in the kitchen that is already fully electric. And they're also looking at local ingredients to possibly minimize the transportation miles. So this will be a hotel that all of us will be continuing to keep our eyes on, especially now that we are awaiting certification from both US Green Building Council, but also Passivhaus Institute. So more to come from Hotel Marcel, the tapestry collection.

Marina Franolic: It's going to be very interesting exactly to follow and to see what they're doing. At IDEEA this year, we also have the Six Senses for Total, that will be open in Norway, 2024 I think and it's planned to be net positive Hotel. So it's impressive how we're developing so fast technology, they can actually save us and save the future of this planet. And I hope that this level of development of this technology is just going to increase through years as quickly as possible. So we will be able to -- make the all live net positive in the future, to give more and to give back instead of just using. Paulina, I have just one more question, because I think we're gonna prepare ourselves for the panel quite heavily. I would say maybe even quick wins, or the most beneficial way that hotels can implement some sort of the energy efficient models? What would you say they would be something that would be the first or the second step in bringing the energy level lower, but not necessarily investing very, very high amounts of money.

Paulina Bohdanowicz-Godfrey: Okay, that's a really, really good question Marina. Because whilst Hotel Marcel and the six senses are, in a way, either new builds or conversions, and almost being new, a lot of our hotels, majority of portfolio of every brand is existing buildings. And that's the portfolio we all need to be looking at. There is no silver bullet for the journey to lower energy efficiency. And I would probably have about six points, but let's just go with the first two, since you've asked about points that are low cost or no cost. I believe in awareness and behavior. We are humans, we are able to change, we can change to behave and perform better, but we also forget the best practices, and we tend to go to our old habits. So I would say behavior, doing the right thing, at all times, is really the first step that every hotel should take. Bring the best practices, use the resources that are available from various partners that exist within this space, such as Sustainable Hospitality Alliance to name just one of them. They have loads of resources; make sure that the team members understand what is the good practice, what's the best practice and they act accordingly. And the main thing here is, whatever best practices we learn in the hotel, we can take home, because hotel and home is really very, very similar. You have kitchen, you have bedroom, you have entertainment space. So whatever is good in terms of conserving resources in the hotel, you can take it straight home. So that's the first one. The second one, I would say controls and commissioning of large equipment. That may require a level of cost at times, but sometimes it's just understanding the BMS system, the Building Management System that exists and using it correctly. We've heard stories about BMS as being sophisticated clocks. Hopefully we don't have those stories anymore, but really controlling the equipment we already have. Making sure that it is not operating outside of set parameters. It will again have a significant positive impact in terms of reducing energy consumption and recognition. And recommissioning of equipment, everything needs to be calibrated and maintained. So sometimes looking at large pieces of equipment such as chillers and boilers, recommissioning them to what they were supposed to do, maybe two or three years ago would be a really, really strong positive impact for energy conservation. And then there are other measures, which I'm hoping we can discuss during the panel discussion, once we meet in Athens.

Marina: I was thinking, it's so important, what you mentioned just a little bit before is that we need to focus a lot on the existing properties, because that's the most of the real estate actually out there are the existing and wellbeing the future. So I think that the measurement is something that we can all do in some way, start measuring what we spent, and then understand, and how we can actually make that more sustainable, how we can just do little things, little steps day by day and save the energy.

Paulina Bohdanowicz-Godfrey: Absolutely. And again, there are tools that exist for hospitality industry, I will call out Sustainable Hospitality Alliance once again, because they have been the drivers for various hotel carbon measurement initiative hotel water measurement initiative, which were done in partnership with a large number of hospitality players. So it's something that we as an industry, all believe in, all want to measure in the same way so that the customers can actually reasonably compare different hotels between different brands. And also, we can all respond along the same lines, because we're all going in the same direction together.

Marina Franolic: Well, Sustainable Hospitality Alliance, will also be joining idea in Athens. And I'm really glad that we took this topic on a very high level. We really want to showcase both from the operational and the real estate development aspect, how effective they can be, in order to support any new developer, investor, brand operator to do just a little bit more than than it has been done by now. Paulina, I have to thank you so much for joining me today, because you actually made my day. I think that just showcasing what can be done and what the industry is doing, it just feels so positive that we are going into the right direction. Paulina is going to be joining the session on sustainable real estate hotel development, leading the change and IDEEA on September 27th. And I can't wait to meet you also in person, and to all to have actually the entire audience here what Hilton is doing in this regard. Paulina, thank you once again, for being here today with us in for joining Ida in Nathans. And, once again, I'm looking forward to meet you in person.

Paulina Bohdanowicz-Godfrey: Thank you so much, Marina. Likewise, I'm really humbled that I was able to talk to you and I look forward to the panel session at ideas in Athens and to meeting other participants, other panelists, thank you.

Marina Franolic: Thank you. Bye bye.

Outro: Thank you for listening to the IDEEA Podcast, the channel for the IDEEA Hospitality Investment Forum. You can find a full transcript of this conversation in the Content Library on ideaa-forum.com. With other reports and insights. We look forward to welcoming you and your colleagues in person at IDEEA in Athens, Greece on the 26th through 27th of September 2022. If you haven't registered yet, please go to ideaa-forum.com to purchase your pass today and save before ticket prices increase. Please feel free to email us with any questions at hello@thebench.com.

Until the next episode, stay safe and keep well. Bye-bye for now.