A new study from Cornell University has found
that hotels gain a revenue benefit when they are certified under
the LEED sustainable building program.
By comparing LEED certified
hotels with a competitive set of non-certified hotels, the study
found substantial increases in ADR and RevPAR for the LEED hotels.
The study, "The Impact of LEED
Certification on Hotel Performance" by Matthew Walsman, Rohit Verma, and Suresh Muthulingam,
is available at no charge from the Cornell Center for Hospitality
Research (CHR) at the School of Hotel Administration.
"The hotel industry has embraced environmental
sustainability and several hotels have registered for or earned
"green" certification under the LEED program," said Verma, who is
the Singapore Tourism Board Distinguished Professor at the School
of Hotel Administration. "But LEED, which stands for Leadership in
Energy and Environmental Design, is really aimed at controlling costs by limiting resource use. So, the question was whether there
also is a revenue benefit from LEED. We found that the answer is,
The study compared the performance 93
LEED-certified U.S. hotels (the number for which operating data
were available) to that of 514 comparable competitors, and found
that the certified hotels obtained superior financial performance.
The authors completed this report by analyzing comprehensive hotel
performance data provided by STR, a Partner of the Center for
Walsman, a doctoral candidate in Service
Operations Management at the School of Hotel Administration,
pointed out that many of the hotels had only recently been
certified, so the study could compare their revenue experience for
a period of just two years.
"We'll have many more hotels to study
in the future," he said, "since companies like Marriott have now
included LEED as part of their own design specifications for new
The researchers found that the revenue
benefit applied in hotels of all types, although most hotels in
the study were upscale or luxury properties located in urban or
"This makes sense, because many of the LEED
standards involve a hotel's connection to public transit or other
resources typical of urban areas," Verma added.
by the United States Green Building Council in 2000, the LEED
certification process gives commercial buildings a scorecard for
meeting standards relating to such areas as location and
transportation, materials and resources, and water efficiency,
among others. The more points under the program, the higher the
certification level. Although the initial LEED standards were not
directly aimed at hotels, numerous hotel properties nevertheless
have earned certification. The most recent version of the LEED
standards specifically include hotels, along with other commercial
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