Operations and Environment- EMS System

Executive Summary

The aim of this report is to create, present and defend a suitable Environmental Management System (EMS) for implementation at our chosen hotel, which would be the Shangri La Hotel in Sydney. Over this report, we will discuss what an EMS System is, and its benefits to the company, the current strategies Shangri La has Implemented towards the Environmental movement, what makes and effective design and the relationship of it with Sales Profitability and as well as an evaluation of the changing nature of operations. Along this report, we will also discuss some of our recommendations for the property.

Contents

1. Introduction

2. Introduction of property

3. Environmental Management System (EMS)

4. Design

a. Connection with Sales Profitability
b. Elements of Effective Design

5. Long Term Advantages

a. What is sustainable tourism?
b. Economic Benefits
c. Social Benefits

6. Current Environmental Management & Principles

a. Waste Management
b. Water Management
c. Energy Management

7. Evaluation of the changing nature of operations
a. Operations Management
b. Environment Management

8. Recommendation

Introduction
As stated by Browne, 2006, “The hospitality industry will no longer be able to ignore its environmental responsibilities as it will have to respond to a number of pressures. For example, the “green tourist” will demand “green” accommodation; legislation with regard to the disposal of waste has implications for the hospitality industry; and the continued increase in energy costs will necessitate reduction in usage.”

Therefore, the Environmental Management System is becoming more known in the tourism and hospitality industry over the globe. Almost all hotels have begun using it in varying degrees. It is a way for the management to deal with and control possible effects on the environment as well as its activities, products or services.

Introduction of property
In 1971, Robert Kuok was inspired to establish and name his hotel, Shangri-La, from a famous novel, Lost Horizon (1993). Shangri-La itself has a meaning of tranquillity and serenity. Shangri-La hotel is a worldwide and well-known 5 star hotel group that is based in Hong Kong. With a total of 83 properties and 34,000 room inventories, Shangri-La hotels have expanded their brand throughout Asia Pacific, North America, Europe and also the Middle East, with more hotels around Asia and UK being under development. Every aspect in the Shangri-La chain hotels should follow the standard by the developers of Shangri-La hotel. In order to prove to society that Shangri-La has a high standard of management and service, Shangri-La achieved many awards in the different regions and different categories. Shangri-La hotel not only create strategies to generate more revenue but also create a plan how to minimise the damage to environment as well as sustain the earth. By applying the Environmental Management Systems to many of their hotels in the world, Shangri-La committed to give a good effort to nature as well as to their guests and also to ensuring all the staffs to apply EMS in their daily basis, Shangri-La promotes and implements the environmental awareness to the guests and to staffs. On the other hand, Shangri-La hotel Sydney also show their commitment to sustain the environment in 5 different areas; climate change, waste disposal management, ozone depletion, water use management and indoor air quality. Further discussion about how Shangri-La hotel Sydney to sustain the environment will be conducted in this report.

Environmental Management System (EMS)

Nowadays, many luxurious hotel brands have presented to society that they are currently applying EMS to their daily activities. However, only a few people know and understand what the meaning and function of EMS is, in hospitality and tourism industry.

Hospitality and tourism industry is known as one of the largest industries that consume a big portion of natural resources as well as a high-volume of wastage. EMS has been introduced in order to help many hotels to minimise the usage of natural resources, as well as to reduce the wastage. In the other words, EMS is a new way to control all aspects that has a negative impact to the environment.
EMS not only gives advantages to environment either at present or future, but also it gives a numerous benefits to the hospitality industries.

In term of costs, EMS will help a hotel to lower the operation costs by managing the wastage and consumption of resources more efficient. By adopting EMS in the daily operation of a hotel, you might achieve many certificates and awards. These kinds of recognitions will enhance the image of business as well as the credibility. So, more revenue will occur from adopting EMS. Making the workplace safer and healthier is another benefit from EMS. It means the number of work-related accidents; illnesses or absenteeism will reduces dramatically.

Moreover, there is an increase in the number of guests who are becoming more environmentally aware. EMS enables hotels to meet this demand so at the end hotel will stand out from the competition. Although the long-time benefits are very obvious to understand, not so many hotels could adapts and implement the system. By starting to create a policy and procedure of EMS, hotels should be able to introduce to the entire staff about EMS. In fact, EMS is very challenging and difficult to adapt, but it is very useful in order to bring a many advantages for two parties; hotels and environment.

Shangri-La hotel is known as a 5 star, luxurious chain hotel that is located mostly in busiest city in the world. In Sydney, Shangri-La is located close to the Opera house and Darling Harbour, which is the main attraction point of tourism. Shangri-La, Sydney has become one of 5 star hotels that are concerned about environment. Based on research, Shangri-La hotels and resorts create their own campaign called “Sustainability”. Under the brand Sustainability, Shangri-La hotels and resort, together, focus on 5 different main areas, such as Environment, Health and Safety, Employees, Supply Chain and Stakeholder Relations. On their website, Shangri-La stated “Luxury need not cost the earth”, that statement very obviously tells us that in order to be a luxurious hotel or to bring a luxury service to guests, minimising the damage to earth needs to be considered.

In the term of environment, under the Sustainability campaign, Shangri-La issued several reports known as Sustainability report, which mainly consists of description of company’s social, environmental and economic impacts. In April 2013, Shangri-La released the newest 2012 Sustainability Report.

Policies and Environmental Projects

Shangri-La has committed to take part solving environmental issues that are currently happening. To be good stewards of the environment, ensure all the properties highly respect to the local traditions, natural habitats, conserving biodiversity and be able to manage all wastage output and energy. Their policy is to make sure all their daily operation within their hotel brand, put an effort to promote and implement the practice of environment and do improvements.

Examples of some of environmental projects from Shangri-La hotels and resorts are; since 2011, Shangri-La participates in the Carbon Disclosure Project (CDP), CDP is an international organization that has a mission to provide full information about environment and how to manage it. Moreover, Sanctuary is another environment project from Shangri-La. Launched in 2010 with a mission to make an effort towards biodiversity conservation as well as the protection their habitat. Hotel will monitor, develop, and track the biodiversity that they take care of. In Asia, Shangri-La shows a lot of participation in the preserving and protection of the environment. For example, from the Reef Care project that usually happens in Fiji Island and the Maldives, Care for Nature project that take places in Malaysia and China, Dugong Care project that held in Malaysia, and also Orang-utan Care project in Malaysia.

From these projects and policies, Shangri-La hotel and resorts put a high efforts and commitment towards environment and be able to apply EMS in their daily basis operation.

Design

Connection with Sales Profitability

The Shangri-La story came about in 1971 with the first deluxe hotel in Singapore. Having a long history in the hospitality industry, Shangri-La created their unique operational and facilities design to increase their revenue. Hotel eco design was not a mission for Shangri-La, but rather their way of surviving in the industry, as the hotel’s design will affect the sales and profitability in the future.

There are three assumptions to analysis and measure the relation between performance of the hotel design and profitability.

The first being, perfect design will bring higher average daily rate. Next, the hotel will receive higher occupancy by perfect design. Last but not least, the Revenue per Available Room, RevPAR, will be increased by perfect design and reasoning profitability, assuming the perfect hotel design will minimize the costs and maximize the profit.

There are four parts related to cost, namely; labour, energy, maintenance and operating efficiently.

High effective use land and eco design can bring positive effect to the hotel profit. American tourism society recently did research that, forty three million American consider themselves as eco travellers and would rather pay 8.5% extra to the hotels that are aware of environment design. In other words, people are willing to pay more money to reduce water consumption, energy, wasting and pollution. Maximizing the room view, in general, the room rate with a good view will cost 10% to 25% higher than the room without good view; therefore, maximizing the room view is one of the most important factors in hotel design for earning more profit.

Shangri-La Sydney is an ISO 14001 certified hotel, which means that it is a member of the International Organization for Standardization. ISO 14001 standard requires identifying all aspects of the community organization’s activities, products, and services that could have a significant impact on the environment, including those that are not regulated.

ISO 14001 helps the Shangri-La Sydney set performance objectives and targets for the environment management system. It is not only the responsibility for the hotel to follow, but also it could be good business for industries if they have effective environment management system.

Shangri-La Sydney achieved 16% reduction of co2e per guest night in 2012 and set another target that is 20% reduction of co2e per guest night in 2015. Co2e was produced from the energy consumptions, meaning, the Shangri-La reduced the energy consumption such as electricity, fuel, and gas without decreasing guests’ satisfaction.

20% reduction of potable water per guest night in 2012 versus 15% in 2015 target set by ISO 14001. Shangri-La did incredible work in potable water reduction, exceeding the target for 2015 by 5%. The design of the water tap, showerhead by using the recycling water system, dominates the water usage.

Hotels also have the capacity to address local resource management issues through innovative solutions such as glass water bottling, rainwater harvesting, use of solar energy and the incorporation of composting and herb gardens to manage food waste.
Obviously, the operations or facilities have a close relationship with sales increase and profitability. Good design will increase hotel sales and bring more profit for the industry.

Elements of Effective Design

There are few elements will impact the design decision-making process, first one will be the request of a creative brief. Shangri-La hotel Sydney will ask the designer or strategist for a creative brief, which is an outline of the project goals to be adhered to over the course of the project. Take for example a decrease water pressure water tap by 20% will help reach the goal of a 20% overall reduction in water usage.

Shangri-La does not only pay attention on the internal environmental issue, take for example Shangri-La’s Care for Nature Project which aims to make a concerned effort towards biodiversity conservation and habitat protection. Shangri-La delivers the concept of this project to the guests who come to hotel and that can increase the reputation of this company. Because guests are willing to pay more to support Shangri-La corporations ensure the project, they will feel that they have participated in the project.

Evaluating the alternatives has been said to be one of the most important stages in the design making process. Shangri-La should find out the advantages and disadvantages of each option. Disadvantages may include large investments to rebuild the hotel or renovate facilities; it will be the advantages for the hotel by applying forward thinking. Some hotels would not change to eco facilities because of the big investment, not to mention the long-term benefit.

One stage would be to make a decision, where Shangri-La would have to analyse before preceding the decision come up with a better solution. All the staff would get involved with the next step, which is to implement the solution. It is essential to work together for reaching the target or decision the hotel made. The staff should have eco thinking to support the new hotel environmental design, bring out their own opinions to improve the design better and educate the guests with use of some environmental posters, booklets, and providing the discount for the guests who do not change bed sheets during their stay.

Monitor the solution, it is crucial to keep eyes always on the process, and correct the error during the process. Shangri-La may need to measure the implemented result to meet their expectations. Monitoring the solution is a tool to help industry to find out their mistakes and come up with best solution.

Long-term Advantages

Tourism is known for being one the industries that brings benefits and opportunities to an economy. Only recently has it been recognised that it is interdependent with the environment.

What is sustainable development?

According to our Lectures, Sustainability is about being able to continue an activity for a prolonged period of time while minimising the risk to the environment so that it would not compromise the ability of future generations.

Though there may be barriers and obstacles with regard to the application of sustainable development in an organisation, it will give us the following benefits in the long run;

Economic Benefits

It will be seen as an investment for a number of reasons.

The cost you spend to make the hotel more environmentally friendly may seem large, but you will get the returns, if thought out and carried out correctly and carefully.

Firstly, the financial saving you will receive from the local government, in terms of reduced tax, only if you are participating as an eco-friendly hotel in the environmental programs, or if you are a certified eco-friendly hotel.

Also, as you reduce the amount of energy you are using, you are making it much more cost efficient. Purchasing environmentally friendly machinery and products can enhance this, for example, the dual flush toilets and low-pressure showerheads. The difference in cost afterwards is very significant.

Social Benefits

Another benefit would be social image, which can also be classified as brand image; the way the community sees your organisation. There is a gradual increase in the number of customers who have started to consider the environment as part of their accommodation choice. Several brands have already repositioned their target market towards the more environmentally and socially conscious younger generation.

Although Shangri-La is already a very reputable brand, by building a stronger and larger target market or customer base, it will gain a competitive advantage amongst other hotels.

Not only will this benefit the view of people externally, it will also benefit internal morality. When you adopt the environment movement, your staff will take pride in the good that you are doing for the environment. This will increase the staff overall moral and pride of the organisation, which will benefit the organisation in the long run. It will spread good word of mouth to potential customers and may reduce the number of staff turnovers. They will be more happy and enthusiastic about their work and responsibilities, which will then lead to an improved efficiency.

Current Environmental Management & Principles

Waste Management

Waste management is one of the biggest environmental concerns in tourism and hospitality industry. Hotel businesses generate a significant amount of waste, which has direct impact to financial issues to the business itself, and environmental consequences. Also, it creates a bad reputation of the image and brand of the hotels. Therefore, it is very important for managers in hotel industry to obtain cost-effective and environmentally sustainable waste management solutions.

According to the chart below, which is based on waste research from 15 Melbourne hotels investigated by Great Forest Australia in 2005, 22 percent of waste is reusable and recyclable which is the biggest percentage out of other wastes and this study found out that over 80 percent of waste generated by hotels can be potentially reusable, recyclable and compostable before being sent to landfills (melbourne.vic.gov.au).

(melbourne.vic.gov.au)

Shangri-La hotels have been participating actively with recycling programme based on ISO 14001 standards and inspected semi-annually. The efforts made from the hotels to reduce waste are further demonstrated below.

a. Recycled materials are correctly separated into different categories and picked up by recycling vendors. Also, cooking oil is distributed by putting it in drums and garbage disposal companies remove wet garbage.

b. Utilising vermiculture composting, including food waste such as coffee grounds, tea, fruit, vegetable peelings and eggshells, has reduced over 30 precent of landfill-bound food waste. These are used in agriculture both as fertilisers and natural pesticides, which reduced use of chemical products to fertilize.

c. The hotel group has undertaken a green IT policy programme in 2009, which prevent needless waste in energy consumption for computer usage. In addition, this programme has a requirement in purchasing efficient equipment, which are often qualified as Energy Star, RoHS (Restriction of Hazardous Substances Directive) or WEEE (Waste Electrical and Electronic Equipment Directive). In result of this programme, the hotel group saved a total of 6.85 tonnes of e-waste including 242 Pc monitors, 223 desktop units, 18 server units and 483 printers. Nowadays, more and more hotels are joining into this programme.

Water Management
Water is a basic natural resource in maintaining life of human beings and other organism. Water is used in every operation both directly and indirectly and people don’t realize how valuable it is until it comes to be limited and facing water shortages. Water is irreplaceable while other resources are often replaceable. Therefore, for managers of every organisation need to grasp importance of the water management and take an action to reduce consumption of water in every way possible. A study of water resource in the world shows only 1.3% of Earth’s water is usable by human out of 2.5% of fresh water and 96.5% of water from oceans. The chart below helps understanding of distribution of water resources in the world. It is clear that the water is one of the most important scarce resources and it needs to be well managed in usage from every individual especially in tourism and hospitality industry.

(ga.water.usgs.gov)

There are many ways for hotel industry to apply water management system into reality, which will be further discussed in this section.

Firstly, each property needs to know which areas are most likely consuming larger amount of water. These areas can be distributed by few categories such as bathrooms, laundry and kitchen areas.

a. Installation of dual flush toilets, which gives customers to choose for a shorter flush, reduces significant amount of water used in bathroom compared to older models. If the hotel can’t afford to change all the toilets, more feasible way to save water is simply by placing a brick in the cistern
b. A study found out that leaking toilet could lose up to 750litres of water a day (greenhotelier.org). Maintenance needs to ensure there is no leakage from not closing water inlet valves properly.
c. Installation of low flow technology can save huge volume of water in many areas in hotels as well as minimising influences on the guest service. Overall water flow in hotels can be restricted especially in showers and back of the house in kitchen and housekeeping department.
d. Most importantly it is vital to educate and encourage people who are related to the business. It can be done by educating customers the importance of saving water and also giving them opportunity to use water wisely. Encouraging them to have a shower instead of taking a bath and not leaving the tap while they are brushing their teeth, which can save up to nine litres if they do so (greenhotelier.org).

Energy Management

In tourism and hospitality industry, energy consumption is one of the main expenses that dominate operating costs within the business. In result of economic crisis, people are more concerned about environmental issues. Especially in hotel industry, it is critical for managers to adopt efficient energy management systems which will reduce significant amount in operating costs and energy bills as well as making a commitment to worldwide environmental issues such as emissions of greenhouse gases (CO2). The key concept of efficient energy use is to carry out the same task by using less energy. The main systems, which consume the most energy in hotels, are heating, air conditioning and ventilation, lighting, hot water production and electricity from other equipment. A research shows that 50% of energy usage is from heating and ventilation and air conditioning (HVAC) in most hotel properties (academia.edu)

Hotels can use renewable energy resources into their energy systems. Renewable energy resources are from the natural environment such as wind and solar power. These resources are unlimited and can be used without impacting environment.
There are many other energy management systems, which give solutions to hotel industries for more efficient energy consumption. One of the most common methods is eco-labelling which is practiced by hotels across the world. This is for the accommodation properties to be identified and certified with the programs based on energy, water and resource conservation. For hotels, one of the programs of EMS can be by developing insulation system of the property which reduces the amount of energy needed for heating and cooling or automatic lighting control which turns off the lights automatically when the guests are out of the room. Also again, educating and encouraging people who are related to the business like staff members and guests are critical as if they are not aware of what they use and how much it affects to the environment, all the efforts will be meaningless.

Evaluation of the changing nature of operations

Evaluate the changing nature of operations and environment management trends, specific to a hospitality and tourism facility through emerging literature.

The tourism and hospitality industry has always followed the trends in the industry and as proven by a track record has always proved to be the most profitable. The section of the report will highlight some off the operations and environmental trends in the hospitality and tourism industry and how it is changed over the years.

Operations management

The Trend of how the hotel operates and manages itself has definitely been changing over the years and can be directly linked to the changes in the consumers’ wants and needs not forgetting the ever-increasing globalization.

Back in the 1980’s, when globalization was not so apparent, hotels mainly relied on domestic travel and thus, less cross-cultural issues surfaced. But as globalization became more apparent, issues such as understanding cultural diversity and accommodating to these guests surfaced. (Frink 2009)

Operations in turn followed, such as the hiring of a more culturally diverse team to provide more of a sense of home for the guest and for food and beverage outlets with different themes and different nationality cuisines present.

Also as the world became more globalized, the employee to employer relationship has also changed due to increased awareness and laws such as the Australian Labour Law which not only dictates the maximum hours each category of employment (E.g casual, part-time, full-time) but also the minimum wage of each individual dictated by the clearly listed (AU GOV) Policies such as these has caused the operations in the industry to change such as the hiring of more casual staff due to the high manpower cost to maintain a high number of full time staff during low season and the restructuring of operations to use less manpower.

The “personal” relationship between employee and employer has also been changing over the years, which could also be due to globalization. In the past there was not many job opportunities around the world but in this day and age, having a global career is becoming more common and as such companies have to change they way they treat staff in order to keep talents in their company. In the past Operations regarding staff were fairly simple as all the staff were there for was to work and earn money and it was the trend to treat the staff however the company wanted, and the staff would stay for a long period of time. The staff had a “I’m lucky to be given a job” attitude where as in this day and age the staff tend to have a more “if it don’t like this job ill just move to another” attitude and with the increasing turnover rates in the hospitality industry over the years.

Leading companies in the industry has recognized these problems and has come up with solutions such as employee development and having in company rules such as anti-bullying. What this would mean for operations is that managers would have to spend more time not only teaching but nurturing employees and employee relationships while still providing the required level of customer service.

Environmental Management

Environmental management and sustainable development has been a long and growing trend in the hospitality and tourism industry.

In the past environmental management policies were mainly government imposed and will be explained in the following sentences. According to an article on “comparative evolutionary trends in environmental policy: reflections on tourism development found in the international journal of tourism research by Atsuko Hashimoto. It states that the earliest conventions on a multinational scale with relations of environmental management which affected the tourism industry was in 1967 on ecology, tourism and recreation in Morges (Hashimoto 1999)

His article due to the published date can be used as an insight to the environmental trends in the 1990’s – 2000’s the concept and reason for environmental management as explained by him then was that the “Natural and cultural assets are a core feature in enhancing tourists ' experiences, and consequently in sustaining the attractiveness of destination areas. In other words, tourism 's survival relies heavily on the quality of the natural and physical environment.” (Hashimoto 1999)

The report also goes on to breakdown the world into different regions and state the steps these governments have taken which effected the hospitality industry has taken namely “land and animal conservation” with also a major focus on pollution. (Hashimoto 1999)

In comparison to the trends that can be seen in this day and age, environmental management has become as much as a selling point as they are the socio-corporate responsibility of the company.

According to the article “Green is the new black” found in the Journal of property management states that there are three advantages in “going green this day and age” namely 1) Reducing operational costs 2) Increasing attractiveness to consumers/competitive edge 3) sustaining the environment that the company is in for the future.

The policies, which are in place, are very much similar to that of the past with exceptions to new technological advancements such as solar power and bio waste management systems. The visibility of these policies, however, is a different story with companies showcasing prominently their effort on environmental management; Take for example the Shangri-la group one of the leading hotel chains in Asia, they have a sustainability and even generate yearly reports to highlight their effort to save the environment in the form of methods such as only buying food from sustainable sources to showcase their greenhouse gasses emissions across all their properties. This clearly shows what Environmental has become over the years but as more and more companies adopt this trend, it almost has or is going to become and industry norm as if you take a look at all the major hotel chains worldwide, they have some form of environmental management system in place and display it proudly.

Environmental management trends started off with bring only forced by government bodies on companies but over the years has not only become a money saving trend for companies but also as a promotion too for companies to distinguish themselves form the others to almost becoming an industry norm.

Recomendation

After weighing out the pros and cons of the Shangri-la Sydney and comparing it to current environmental trends it can be seen that the Shangri-la Sydney is currently lacking a proper waste management system or rather that by having one in place would further compliment their current efforts on sustainable development

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