Hotels to face green funding challenge

Hotel owners in Abu Dhabi must be prepared to make hefty investments in upgrading their properties in order to comply with the emirate’s new green hotel guidelines – part of Abu Dhabi Tourism Authority’s (ADTA) drive to turn Abu Dhabi into a sustainable tourism destination.

The green hotel guidelines for new hotels are being piloted at the Resort Hotel, Al Ain Wildlife Park & Resort, which is currently in the design stage.

But by next year all new hotels will have to follow the green design guidelines, and will be awarded a ‘green ranking’ alongside their star ranking. Current hotels will have to be retro-fitted in order to conform to green standards.

Speaking at the World Green Tourism Abu Dhabi event yesterday, Siegfried Nierhaus, managing director, Atlas Hospitality UAE said the biggest challenge in ‘greening’ the hotel industry would be securing the funds to make the investment.

He suggested that one solution could be for the government to offer incentives for hotels to help with the cost of implementing green initiatives.

“Studies show that an extra 20% investment needs to be made in order to green your hotel,” said Nierhaus.

“The biggest challenge is a lack of capital to invest in green initiatives. There are funding restrictions today. If you go to a bank for a loan to invest in new technology the banks are not lending. There is a lot of communication needed to be done with the banks.”

“Maybe incentives should be given by the government for compliance with best practice.”

Richard Riley, CEO, Abu Dhabi National Hotels said the green regulations would mean that, “many old hotels in Abu Dhabi will need to be redesigned.”

But Riley said hotels will have no choice but to start taking green initiatives seriously.

“As things like Estidama start to take effect, owners and operators will have no choice but to look at these things. No one here that owns a hotel wants it to lose a rating on the world market because it doesn’t comply with the sustainability rankings. “

Chiheb Ben Mahmoud, SVP and head of hotel advisory, Jones Lang La Salle Hotels Middle East told ATN that government incentives could be a “helpful solution - however they are a double-edge sword as they could introduce a state of dependence.”

He added that the ADTA fully understood the “profitability constraints” and would not put pressure on hotels to implement new guidelines too quickly.
“Nothing unreasonable will be required of hotels. The authorities are very much concerned about the financial profitability of projects. The authorities know the profitability constraints, so they will not kill the hospitality industry.”