Sustainable Rehabilitation of Hotels

The event Sustainable Rehabilitation of Hotels that was held on November 8 in Madrid. The participant were Gema Sanz, Madrid Network ; Fernando Miñarro, General Director of Tourism Infrastructure of the Government of the Canary Islands; Pedro Balsa, Leapman CEO and Carlos Pampliega,  Leapman Construction Management Partner.

Fernando Miñarro indicates the importance of tourism in the Canary Islands, and its economic, social and environmental impact. The Canary Islands will end the year with a record 14.5 million tourists. This allows us to think of quality tourism that is incomprehensible if it is not sustainable tourism.

Pedro Balsa gives us some figures that illustrate the dimension of hotel Real Estate in Spain. In our country there are 16,500 hotels, total investment figure in the 2022 first semester has been €1,500 M, 35% more than the previous period, this allows us to think of record figures of €3,000 M of investment at the end of the year. The main clients are investment funds with a percentage of 61%.

According to Balsa, one of the questions that all managers are currently asking is how to make the ESG, environment, social and governance improve my income statement?

According to Balsa, one of the questions that all managers are currently asking is how to make the ESG, environment, social and governance improve my income statement?

The main customer funds in the hotel real estate sector require, from an ESG point of view, to be able to demonstrate the least impact on the environment (the E of ESG) and the use of the best Project Management practices from a governance point of view (the G for ESG).

Carlos Pampliega tells us about the challenges associated with opening or renovating a hotel asset that are associated with the extreme complexity of these projects and have to do with normally long life cycles in which organizations with often conflicting interests are involved.

The consequences of poor technical, operational and commercial planning of the project mean an average cost overrun of 35% only in the construction phase, according to the study "Root causes of Hotel Delays", PMI (2018). To this extra cost we must add the losses caused by the reduction in income or the incalculable reputational damage for tour operators and users. Hiring an experienced Project Manager as a conductor is critical to the success of the project. The key aspects to select the best professional are their experience in applying the best practices in project management and their knowledge of ESG aspects. The sooner we incorporate the project manager into the project, the greater its impact on the income statement.

Balsa emphasizes the importance of having specific building ESG certifications. There are not yet standards as dominant as those in the ISO family, the above group, but it cites at least BREEAM and LEED. Having these certifications has a direct impact on the income statement, by having financing at lower interest rates, and attracting more tourists who also stay more nights in the hotel.
Fernando Miñarro closes the event emphasizing the importance of public-private collaboration for the deployment of sustainable and green initiatives.