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From the
July 2008 issue of:


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Going – and growing - Green in the resort industry Part 2
 
by Alan N. Schlaifer
Principal
Law Offices of Alan N. Schlaifer, P.C.
 
Before we follow those thoughts down a green path, let’s go on an adventure. Whether or not you’ve seen the latest Indy film, “The Kingdom of the Crystal Skull,” pretend you’re a real life Indiana Jones. Your challenge is not fictional - Russians, ancient Peruvian jungle secrets, or escapes from other hazards - as in the latest in this series.

Instead, you have much more serious real life issues facing you in a national and global economy that seems to have more spills than the bullets always headed toward Indy. Unless you can successfully stay on track, your company may suffer fatal wounds.

Since the first part of this article was published, consider these troublesome developments and their Spielberg-Lucas-like and other labels. We bring you Indiana Jones and…..
    • The Temple of Doom-Like Gas Pains: Oil has risen to about $130/barrel, pushing gas above $4/gallon in the U.S. and even higher levels overseas
    • The Kingdom of Food for Thought: Food prices have continued to escalate, fed by skyrocketing corn (think “corn ethanol”) and other commodity prices. Some nations are facing food shortages and riots.
    • The China Syndrome: Demand from emerging economies, such as China and India, has continued strong, despite slowing in the U.S. economy
    • The World of Sky High Airfares and Dark Skies: Fares have shot into the stratosphere, accompanied by flight cutbacks and delays, baggage fees (for luggage that’s often lost), fuel surcharges, airline bankruptcies, and more bad news ready to precipitate like a storm cloud that’s ready to burst. Worldwide airline losses are expected to up to $6.1 billion this year, on top of over $36 billion in the red since September 11, 2001. Crowded planes and poor “service” mean those who arrive at resorts are often stressed out.
    • Silly Staycations: Many consumers have indicated they’ll be cutting back on vacation time, outlays, and distance traveled. A new category for time off has emerged: “staycations,” which Bill Geist parodied on CBS’s “Sunday Morning.”


You put on tanning lotion and dress in beach clothing, but stay home.
    • The Domain of the Jobless: unemployment has crept up in the U.S., while consumer confidence has dropped
    • The Finger-Pointing Olympics: not in Beijing, but continuing in Washington, D.C., and in state capitals across the land, with little responsive action. Politicians vary as to which finger(s) they choose to point…..
    • The Home Stretch: Home prices continue to drift lower, especially in certain markets, as foreclosures continue at high rates.
    • The Fourth “R”: The “R” word – recession – has been uttered by more economists, as growth seems stalled.


Life is Not a Stress Rehearsal
That’s the title of a popular book by author-speaker-humorist Loretta Laroche. And thank goodness, despite all the negatives above and more, which the media obsess over, many positive signs have appeared.

You can see them in whatever positive state, Indiana (Jones) or others, such as enthusiasm, which you happen to be in. One of the ways to conquer the blues is to go – and grow – green, as we discussed last month and more now. Your new green weapons, together with creative marketing, responsive to consumers’ needs, may keep you growing.

Employment is 19 times as high as the level of those out of work, many households are surviving (albeit with more effort), and more families are modifying behavior to deal with the new economic realities.

Inflation has stayed low thus far, despite the two “f” words, fuel and food. More vacations are likely to be by car than otherwise might have been the case.

Luxury buses at cheap prices, the so-called Chinatown buses, provide phenomenal values, such as $35 roundtrip between New York City and Washington, D.C. (Maybe some resorts should charter buses, à la Atlantic City trips for seniors, or take other steps to make going by “planes, trains, or automobiles,” as in the John Candy film of that name, easier?)

Good to great vacation values and experiences, such as those offered by timeshares, should appeal to the majority of Americans. They are also a fabulous deal for visitors from other lands, such as European, Asian and Latin American nations – who can still afford vacations, especially with their strong currencies.

Magic Moments
The always creative and dynamic members of the resort industry are showing their resiliency in many ways. These include promotions to cut costs, demonstrate affordable ways to travel, focus on vacation benefits, and using green to reduce resource usage and costs, while attracting travelers.

Some travel and resort companies and others are promoting travel and gas incentives. The most heavily promoted is Chrysler’s $2.99/gallon cap for 3 years (on up to 12,000 miles/year of driving). Even churches have gotten positive press by offering gas with anywhere from a 50 cent per gallon discount to a 50 cent per gallon total price!

As with past gas price spikes, many timeshare and other resorts and hotels are offering gas allowances for mini-vacations and tours. This is a popular from Boston and other East Coast destinations, through the Midwest, all the way to Ventura, California and other Pacific venues.

The longer the trip, the greater the incentive needs to be. A $25 gas card may work for locals but has little appeal to a family flying hundreds or thousands of miles. Vacation value packages may coax distant voyagers to depart. Disney is offering free meal incentives, the Disney Dining Plan (one each: quick service, snack and table-service meal per day), and low-cost timeshare villa packages ($104/day per person) in Web ads.

They are also extensively advertising their “Magic” on primetime TV: affordable dream vacations. Varying level of accommodations, from value and modest to luxury and luxury villas (the timeshare units) are on its websites.

You can check out disneyworld.com/affordable:
Discover how a Disney vacation is more affordable than you might think. Find out about Resort hotel benefits (from $82/night). Explore room, tickets and dining options and see how you can customize a vacation package to meet your family's budget.

Need airfare? Add flights to your Magic Your Way vacation package and cover your travel needs in one easy, convenient reservation.

Go for the Green, and Not Just in Golf
Instead of going for the gas – or getting gas (internally), your company may want to go for the green.

ARDA Convention keynote speaker Rick Barrera pointed to many examples of companies that succeeded by not following the conventional wisdom: under promise and over deliver in building your brand.

Your company can use this approach to attract and retain customers and owners by becoming “greener,” to cut power, water and other costs of operation and even construction and renovations. You will then have lower long-term costs to pass to attract and retain your guests and owners.

It is essential to communicate about environmental initiatives with your stakeholders, such as customers, employees, shareholders, suppliers and members of your community. Yet, it is always challenging to plan, execute and measure the results of your actions.

Take your guests, for example. They may not be the traditional green consumers at all, but travelers who simply want the best vacation experience.

Carol Holding, President of Holding Associates, a New York City brand consultancy firm (www.holding.com), says the proportion of green consumers has increased to 23% this year from the relatively constant 10% who have lived green lifestyles.

She says, “Being green is expected - consumers react negatively to companies that aren’t green by refusing to buy their products. But they won’t change their behavior for a product just because it’s green. That takes creating a better product, as it always has.” Her data indicate that 39% of consumers want to help the environment and about the same number are willing to pay extra or alter their habits to do so.

The real benefit to being an authentically eco-friendly property is that it builds your brand power. According to a study by her firm and others, brand power goes up when a company engages in environmental practices and communicates about them, regardless of whether the practice demands the involvement of customers.

“This translates directly into financial benefits, as the value created by a stronger brand goes directly to the balance sheet in higher margins from repeat business” she says.

You can engage other stakeholders for bottom-line benefits. Holding notes, “Even more dramatic results come from enrolling staff and communities in eco programs. Wal-Mart, is cutting its energy costs by 25-30% in each of its stores by making employees its agents.” That company continuously and thoroughly monitors energy usage in each store; it can tell when an employee might have left a freezer door open if there’s a sudden spike.

David Cross, Partner, R-evolution Partners (r-evolutionpartners.com), Atlanta, GA, adds, “There is a significant need to educate stakeholders. Business partners need to understand a company’s sustainability practices in order to identify business opportunities.”

He says, “Research supports that consumers have a strong desire to do the right thing for the environment (90% care about the environment), but very few actually take action (25% making changes to their lifestyle). This happens because they don’t fully understand issues like global warming or carbon footprint, and what they can do as an individual to have an impact.”

They do, of course, understand the impact on their personal and family finances of rising fuel costs, and are driving and flying less.

Telework It Out
Higher gas prices affect your employees, too. Different approaches should be explored to cut driving and fuel usage. Another benefit is that pollution, with greenhouse gas emissions, declines.

Restructuring the workday, perhaps with flextime to allow some staff to work longer but fewer days may help.

Another approach with great green appeal is telework, also known as telecommuting.

Jean-François Orsini, Ph.D., President of Pin-Stripe, a Washington, DC, consultancy (pin-stripe.com), says, “In the debate about global warming, the parties’ credibility depends on their willingness to adapt quickly and commit strongly to solutions with solid premises. Telework is a proven solution that offers a ‘win-win-win’ benefit to employers, employees and the community.”

“Employers get many benefits from telework, such as agility in using skills of dispersed personnel and better managing growth and their workforce,” he says. “Employees can more easily manage their time, improve work-life balance, gain greater job satisfaction, and can live in less expensive areas. Communities have less pollution, traffic congestion, and fewer accidents.”

Dr. Orsini’s firm offers an online course, used successfully by Fortune 500 and other firms, to get workers in different – and often distant – locations, to collaborate more successfully without meeting face-to-face.

He says, “The number one barrier to implementation of telework programs is managers who fear that they will be losing control over their people. Work accountability and reporting programs need to be in place.”

Dr. Orsini concludes, “Telework training programs that teach the use of collaborative software and hardware tools, and how to follow special telework task development, performance and reporting policies are not enough. Teleworkers and distance workers need to learn how to lower their cultural and behavioral barriers to collaboration.”

Better Water Management
You could say this is the “blue” component of green. In a world with over 6.5 billion people, of who more than one billion lack ready access to potable water, more polluted oceans, and drought in parts of the U.S. and elsewhere, water is an issue whose time has come.

The Orange Lake resorts in Orlando and elsewhere have taken actions to address critical water management issues. Scott Nassar, the company’s Senior Vice President of Resort Operations, Orlando, FL, says, “Orange Lake took the initiative to restrict our water usage starting in 2008 to do our part to protect the local environment. Shortly after we started budgeting water usage, our water management agency, in response to a two-year drought, imposed their most stringent rules to control irrigation on golf courses.”

He says, “This severely limited our resources for water during the driest months of the year, reducing our budget 45%. Also, we were limited to watering common landscape areas once per week. Plant beds, turf, and flower beds suffered.”

“It will take time to recover from the drought and restrictions,” Mr. Nassar says. “The resort landscape may continue to looked stressed and brown in areas until we get into the summer afternoon rainy season. But we will continue to do our part to preserve the environment and be green.”

Their practical approach also applies to having their waste company separate out recyclable materials deposited in over 2,400 trash receptacles on their vast property. Orange Lake also uses as many “Green” cleaning items as possible.

Green to the Core
Bruce Piasecki says Hilton “has been going green in Europe since 2006 with its four lens focus on water efficiency, chemicals selection, energy efficiency and waste reduction.”

“Marriott,” he says, “does it by looking at supply chain, green buildings, employee and guest engagement and by water and waste and energy reduction—plus some new special programs on protecting the rainforest.”

He adds, “These leading resort and hospitality firms are competing on these social needs, as a way of increasing their appeal, and attracting the guests of the future.”

This ties directly in to branding. Eco-friendly focus by being green could be another way to over promise and over deliver for branding. Marriott’s Green Marriott campaign has taken on that colorful dimension.

That initiative began with no smoking and other eco-friendly policies at the company’s lodging properties. Its success in engaging customers and staff has led to actions at the company’s headquarters, timeshare offices, golf courses (34 to become Audubon Society Certified Sanctuaries by end of this year), and more.

The company has gone beyond its facilities to help the planet, with a $2 million grant to protect 1.4 million acres in the Amazon Rainforest of Brazil.

“At Marriott, we believe the future of business is green,” says Arne Sorenson, Chief Financial Officer and co-chair of the company’s Green Council. “Building on a 20-year track record of responsible energy consumption and waste reduction, we believe rainforest preservation is critical to reducing the greenhouse gas emissions that cause climate change.”

By the end of 2008, Marriott guests and customers will be able to offset greenhouse gas emissions generated by hotel stays by contributing to the rainforest fund. In addition to offering this carbon offset, Marriott is taking a wide range of new steps to reduce the company’s water, waste and energy consumption; green its supply chain; build greener hotels and resorts; and engage employees and guests to take action.

The company is also working with Conservation International, a global conservation organization, on all of these efforts. These are a few details on a thorough part of their work together; you may adapt these to your own company’s situation:

Recycled Bic Pens • Supply Chain
Engage the company’s top 40 vendors to supply price-neutral greener products across 12 categories of its $10 billion supply chain. Some of the first products to be rolled out are
    • BIC Ecolutions™ pens designed made from pre-consumer recycled plastic
    • Low VOC (Volatile Organic Compounds) paint
    • “Room-ready” towels by Standard Textile, which save 6 million gallons of water annually by eliminating the initial wash cycle.
    • Other items under consideration include compostable key cards, recyclable carpet, and more responsibly packaged soaps and shampoos.


This is another part of the initiative from Marriott’s release, which may inspire your colleagues, owners and other guests:
    • Employee and Guest Engagement – Educate and inspire employees and guests to support the environment through their everyday actions at home, while at work and on travel.
    • Also, for timeshare operations and at corporate headquarters, Associates (employees) traded in plastic utensils and Styrofoam cups and plates for “Green Initiative” branded thermal travel mugs and tumblers. They replaced plastic utensils in break rooms with SpudWare™, durable utensils made from potatoes and 100% biodegradable within 100 days.


An important part of the company’s commitment, and one you can apply to your lodging or other operations, is to cut fuel and water use 25% in the coming decade.

“An integrated green strategy is a business imperative,” says Kathleen Matthews, Executive Vice President of Global Communications and Public Affairs and co-chair of Marriott’s Green Council.

She was a keynote speaker at the Wharton School Club’s Green Business Summit: Adapt – Innovate – Transform, on June 5 in the Washington, DC area. (whartondc.com).

The Rule of Law, or of Reason?
In the midst of this Green Wave, laws, regulations, court decisions and government actions are playing a part. Many states, including resort industry states such as California, belong to consortiums with other states to control greenhouse gas emissions.

The Supreme Court issued a seminal decision last year in Massachusetts v. EPA (Environmental Protection Agency) that has served to spur those types of efforts. The Court held that because greenhouse gases fit well within the Clean Air Act's broad definition of "air pollutant," EPA has the statutory authority to regulate emission of such gases from new motor vehicles that are contributing to damages from climate change.

The state’s injuries include loss of winter snowpack and rising sea levels that have begun to “swallow” its coastal land – all injuries that should concern firms in the resort industry. Under these circumstances, EPA’s failure to dispute the connection between emissions and warming or to regulate such emissions “contributes” to the state’s injuries, in violation of the Clean Air Act.

Voluntary actions, such as those of the companies listed above, have played a growing role in dealing with many facets of climate change and resource challenges.

An Inconvenient Statutory Truth
Proposed national laws, such as the so-called “cap-and-trade” schemes supported by all of the presidential candidates and now under consideration in Congress, have produced a very mixed review. Writing in the Washington Post and Newsweek, moderate columnist Robert Samuelson calls them a bad way to try to do something about the weather, despite being “the darling of the environmental groups and their political allies.” The bill seeks to cut carbon emissions by 66% by 2050.

A recent forum at the U.S. Chamber of Commerce displayed a labyrinthine graph that would make solving the old Rubik’s cube seem like child’s play. Yet, Samuelson writes that the complexity allows supporters to deceive the public by creating “lofty goals that are impossible to achieve. We’ve had ‘wars’ against poverty, cancer and drugs, but [all] remain.”

He notes that “carbon-based fuels (oil, coal, natural gas) provide about 85% of U.S. energy and generate most greenhouse gases.” To stop emissions by regulating them out of existence, firms would buy government-issued allowances, or quotas, and sell what they don’t need or buy what they do.

The projected emission reductions are mostly, he writes, “make-believe. If we suppress emissions, we also suppress today’s energy sources, and because the economy needs energy, we suppress the economy. . . . As emissions cuts deepen, the danger of disruptions would mount.” Rising prices for permits could expand government enormously, with about $1 trillion to the Feds from the Senate bill between 2012 and 2018. Congressional critics say the bill’s cost over the next 42 years could be $3.3 trillion (not a misprint), and President Bush estimates a $6 trillion hit.

Samuelson concludes that this scheme will fail unless “we find cost-effective ways of reducing the role of fossil fuels.” A direct tax would be better, “more visible and understandable,” while providing incentives for clean tech and reductions in carbon (dioxide).

If he is correct, the current “cap-and-trade” proposal could be the proverbial “wolf in sheep’s clothing.”

Not even Indiana Jones could escape from this fiscal and economic monster. Adopting Mr. Samuelson’s conclusion, let’s call this horror film what it is, if ever enacted, “Indiana Jones and The Wrath of ‘Cap-and-Tax.’”



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