{"id":13179,"date":"2016-11-04T17:50:15","date_gmt":"2016-11-04T21:50:15","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/time-for-marriott-to-check-in-to-climate-change\/"},"modified":"2016-11-04T17:50:15","modified_gmt":"2016-11-04T21:50:15","slug":"time-for-marriott-to-check-in-to-climate-change","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/time-for-marriott-to-check-in-to-climate-change\/","title":{"rendered":"Time for Marriott to \u2018Check-in\u2019 to Climate Change"},"content":{"rendered":"

Climate change has the potential to destroy Marriott International\u2019s business as we know it. From its resorts nestled along the beautiful white sandy beaches of the Caribbean to its majestic mountain ski lodges, Marriott is profitable when weather is stable and predictable, infectious diseases are kept in check, and traveler disruption is kept at a minimum. With Marriott\u2019s recent $13 billion acquisition of Starwood Hotels, can the world\u2019s largest hotel company rise to the occasion and curtail the effects of climate change?<\/p>\n

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What climate change means for Marriott<\/strong><\/p>\n

Science has spoken: there is no longer any reasonable doubt \u2013 or at least there shouldn\u2019t be \u2013 \u00a0regarding the formidability of climate change. For Marriott, which features more than 1.1 million rooms in over 110 countries, climate change means extreme, unpredictable weather, decreasing snow cover, and rising sea levels at its global properties \u2013 all of which yield decreased profitability.[1]<\/a> In fact, a study from Cornell University calculates losses from weather-related events to have increased by an average of 2% annually for the past 40 years.[2]<\/a><\/p>\n

Environmental impact drives profitability<\/em><\/p>\n

The extreme weather conditions are potentially devastating for Marriott, its customers, and the local community, including enhanced risk of flooding, drought, severe storms, heat waves, and infectious disease proliferation. These unpredictable, extreme weather events result in decreased revenue as guests will be displaced or even require a complete property shutdown. For example, during 2011-2012 revenues dropped 15% at its ski resort properties due to lack of snow.[3]<\/a><\/p>\n

Furthermore, the Caribbean development report estimates that the cost to replace a hotel that has been damaged by a rising sea levels ranges from $9-80 million, not including costs associated with business interruption.[4]<\/a> Naturally, insurance premiums are also expected to rise with the additional risks that climate change causes. With rising insurance premiums, Marriott\u2019s bottom-line will shrink.<\/p>\n

Consumer preferences drive satisfaction<\/em><\/p>\n

Customers are also weighing in on the debate of climate change, making purchase decisions based on a hotel\u2019s sustainability practices. Numerous studies of the hotel industry show that commitment to environmental practices improves a hotel\u2019s profitability.[5]<\/a> Marriott, however, recognizes that although consumers value its sustainable efforts, overall service quality should not diminish.<\/p>\n

Regulatory impact<\/em><\/p>\n

The hospitality industry counts for between 4-6% of greenhouse gas emissions with forecasts expected to increase to 10% by 2025. Research from the University of Cambridge indicates that in response, governments are likely to consider carbon taxes to curtail greenhouse gas emissions.[6]<\/a><\/p>\n

Marriott\u2019s sustainability efforts <\/strong><\/p>\n

Recognizing the threat of climate change, Marriott established its global sustainability program in 2007. Through its sustainability practices as outlined below, Marriott aspires to be the global hospitality leader for environmental sustainability. [7]<\/a><\/p>\n