According to a new report by McGraw Hill Construction in partnership with Waste Management, entitled “Green Retail and Hospitality SmartMarket Report: Capitalizing on the Growth in Green Building Investments,” owners of retail and hotel establishments are reporting growing levels of green building activity planned over the next two years. The report is based on a study of 79 retail, 30 hotel and 22 restaurant owners conducted in 2013 by McGraw Hill Construction.
The study defined a green building project as one built to LEED or another recognized green building standard, or one that is energy-efficient, water-efficient and improves indoor air quality and/or engages in material resource conservation. Notably, by this definition, the percentage of retail owners that have taken a green approach in over half of their building projects rose from 18 percent in 2011 to 38 percent this year, and is expected to rise to 52 percent by 2015. Hotel owners show an even greater investment in green building — the percentage of those owners that have taken a green approach in over half of their building projects rose from 28 percent in 2011 to 48 percent in 2013, and is projected to rise to 64 percent by 2015.
Owners note strong business benefits from green building investments and green operations and maintenance practices, helping to drive this growth. Most notably, they report the following when comparing the performance of their green buildings to traditional buildings:
- Annual operating cost reductions: Reported by 66 percent of retail owners (at an average reduction of eight percent) and by 51 percent of hotel owners (at an average reduction of one percent)
- Energy use reductions: Reported by 58 percent of retail owners and 67 percent of hotel owners at an average reduction of 15 percent for both
- Asset value increases: Reported by 61 percent of retail owners (at an average increase of seven percent) and by 71 percent of hotel owners (at an average reduction of 11 percent); and
- ROI increases: Reported by 67 percent of retail owners (at an average increase of eight percent) and by 85 percent of hotel owners (at an average reduction of 14 percent).
There are many factors driving these owners toward adoption of green building investments and practices. While operating cost reductions are the most highly reported reason for going green (by 66 percent of retail owners and 73 percent of hotel owners), there are several other factors considered highly important in their decision-making process:
- Utility rebates: according to 63 percent of retail and 70 percent of hotel owners
- Protecting/enhancing brand: according to 51 percent of retail and 73 percent of hotel owners (for hotel owners, this is as important as operating cost decreases); and
- Improving ROI: according to 52 percent of retail and 67 percent of hotel owners.
However, business factors alone do not account for the increasing commitment to green building. Forty-four percent of retail owners and 50 percent of hotel owners find that human impact benefits have also been an important factor in encouraging their decision to invest in green building projects. Seventy percent of retail owners see meeting government regulations and standards as a key factor in their decision to do green projects in the future. In addition, more than half in both sectors report that improved environmental health and well-being has a strong impact on their decision to make future green investments.