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ITC Hotels: Designing Responsible Luxury

ITC Hotels: Designing Responsible Luxury

By Tonya Boone, Nalin Kant Srivastava and Arohini Narain

In this case study Professor Tonya Boone, Nalin Kant Srivastava and Arohini Narain document the ambitious and revolutionary journey that ITC Hotels undertook to create, execute, and implement the novel concept of ‘Responsible Luxury’. Management’s decision to retrofit eight existing properties and launch ITC Gardenia along LEED guidelines to attain Platinum ratings was fraught with various challenges.

In 2009 ITC Hotels launched its first LEED (Leadership in Energy and Environmental Design) Platinum Certified luxury hotel, the ITC Gardenia in Bengaluru. While it provided the highest levels of luxury, the Gardenia also became the largest LEED Platinum certified hotel in the world and the first LEED Platinum hotel in Asia. ITC was the only enterprise of its size and scope in the world to be carbon positive, water positive, and solid waste recycling positive.

ITC Hotels’ commitment to environmental responsibility began in 1988. The triple bottom line objectives of environmental, social and financial performance, with an emphasis on nation building, had become an essential part of ITC’s corporate vision.
Traditionally, hotels were positioned either as luxury or green hotels. Since ITC Hotels had an edge on both, it was decided to carve out a path to a third niche and amalgamate the two incongruent concepts of sustainability and luxury to emerge with the ethos of ‘Responsible Luxury.’

Nakul Anand, Executive Director, ITC Limited, challenged his team to push sustainability further in the Hotels Division while simultaneously raising its luxury aesthetic. In order to make ITC Hotels the world’s greenest luxury hotel chain it was needed to design the future properties along LEED guidelines to attain Platinum ratings, and also remodel the structural design, systems and processes at its other luxury brand hotels in India.

Before ITC Gardenia came up in Bengaluru, the Hotel Division headquarters, ITC Green Centre, in Gurgaon was the largest LEED Platinum building in the world. The building used locally produced and renewable materials.

The building had a chargeable carpool facility, showers and changing facilities for bicyclists. Most of the parking was underground in an effort to reduce heat islands and reduce temperatures inside the cars during the day. The building site and the building maximised natural light, and most of the managers kept lights off throughout the day. Instead of staying late in the office, staff were encouraged to leave by 6 pm so that lights would not be needlessly kept on. On visiting the building in early 2009, the then U.S. Secretary of State, Hilary Clinton had commented, “This building may not be a regular stop on the tourist map, and no one would confuse it with the Taj Mahal. But it is a monument in its own right. It is a monument to the future.”

The ITC Green Centre experience proved useful while building the ITC Gardenia, which was designed to minimise energy and water consumption while indulging the customer.

Energy and water management were critical to hotels in the luxury categories, especially those that served significant numbers of foreign travellers. Fuelled by rapid population growth and continued high levels of economic growth, India’s electricity sector was insufficient to cope with the rapidly increasing demand. Hotels, therefore, had to develop their own reliable electricity supply. ITC businesses used environmentally friendly sources of energy and devised innovative means to minimise energy consumption. In addition, waste reduction and recycling throughout the Hotels division was aggressively promoted.

To enhance its positive environmental footprint and manage its spiralling energy costs, ITC chose wind energy as a renewable energy source. Under its Clean Energy Initiative, ITC invested in a 12.6 megawatt wind energy generation plant in Tamil Nadu. Wind mills were installed in the states of Maharashtra and Andhra Pradesh and connected to the regional power grid. By 2011, 30.9% of ITC’s energy consumption was from renewable sources.

ITC focused on achieving the lowest specific water consumption (water used per unit of production) through conservation, audit and benchmarking. For example, in order to recycle wastewater, water from wash basins and bathtubs was captured and filtered. This filtered water was reused for makeup tanks, landscaping and horticultural projects around each hotel’s community.

While it provided the highest levels of luxury, the Gardenia also became the largest LEED Platinum certifi ed hotel in the world and the first LEED Platinum hotel in Asia. ITC was the only enterprise of its size and scope in the world to be carbon positive, water positive, and solid waste recycling positive.

By treating and recycling all of their wastewater, the hotels were able to eliminate any effluent discharge and reduce fresh water intake. ITC also engaged in rainwater harvesting. Such development projects consolidated ITC’s water positive status for nine consecutive years.
In India, solid waste was often disposed off at landfills and through dumping, making waste management a serious concern. Most landfills and dumping sites posed serious health threats for people living in their vicinity and also contaminated soil and water. ITC Hotels aimed to achieve zero waste generation status. For example, ITC Maurya installed an organic waste convertor (OWC) inside its premises in 2008. The OWC processed, separated biodegradable food waste from the hotel’s kitchens with friendly bacteria, converting the waste into high-quality manure. The entire waste conversion process took about 15 minutes, following which the raw compost was converted into manure over two weeks. Similarly, in 2008, ITC Grand Central, Mumbai installed an odour-free organic waste converter with a bone shredder which converted all bone waste into usable manure. The process took approximately ten days. The converter helped in cutting down on various costs. Not only did it generate dry, recyclable waste, it reduced the transportation cost of wet waste and the usage of plastic and garbage bags as well. The hotel planned to do away with the wet waste room, thereby also eliminating the resultant spillage and odour.

The focus on waste reduction and recycling was formally adopted under the auspices of  WelcomEnviron in 1992. In the years that followed, the ITC Hotels group implemented rainwater collection, shifted to energy efficient lighting, installed solar hot water systems in most of its hotels and installed variable frequency drive motors across all its luxury hotels. As a result, energy consumption decreased by 40%, water consumption dropped by 30% and the hotels were sharing their treated wastewater with their neighbours for their horticulture needs. The total rainwater harvesting potential developed by ITC Hotels was more than twice the total water consumed by its operations. The WelcomEnviron programme also stressed community engagement. The hotels were made accessible for their physically challenged workers.
In designing the Gardenia, the engineers looked at energy and water management so that on the one hand, the customer could have a comfortable and guilt-free luxury experience, and on the other, the hotel division could do justice to the fact that hotels sold sleep. In addition to storm and rainwater harvesting, only gray water was used in the flushes. The engineers began by searching for the most effective and efficient compressor and generation system. In order to conserve energy, they also designed a system that would optimise heating, ventilation and air conditioning (HVAC) when the guest was out of the room. This reduced overall energy consumption while increasing guest comfort.

Energy and water management were critical to hotels in the luxury categories, especially those that served signifi cant numbers of foreign travellers. Fuelled by rapid population growth and continued high levels of economic growth, India’s electricity sector was insuffi cient to cope with the rapidly increasing demand.

Among other initiatives to improve its social and environmental impact ITC Hotels changed the landscaping to drought resistant native plants, offered to-go lunches in disposal boxes, developed a WelcomMeal that would reduce waste and better serve the customer, and planned to provide plastic water bottles in every hotel room with ITC branded water in glass bottles. Staff at Gardenia were educated about the features of the property, the meaning of LEED certification and the effort required to maintain LEED certification.

ITC Gardenia demonstrated how responsible and luxury could be successfully combined. The hotel received accolades and recognition for excellence on both facets- luxury and sustainability. This success was instrumental in providing ITC Hotels division the motivation to consider retrofitting their other luxury collection hotels to get LEED Platinum ratings while maintaining high luxury standards.
Nakul Anand and his top management team were now faced with the possibility of retrofitting eight of ITC’s existing luxury hotels along LEED Platinum rating parameters. Retrofitting the eight properties would increase capital expenditures by approximately 15% over the next two years. Thus, the main question that Anand and his team had to answer was whether they should retrofit or not.

About the Case Study

ITC Hotels: Designing Responsible Luxury.” Indian School of Business case no. ISB016 (Indian School of Business, June 2013). Harvard Business Publishing. http://hbsp.harvard.edu/

About the Authors

Tonya boone, associate professor of operations management at The Raymond A. Mason School of Business, College of William and Mary

Nalin Kant Srivastava, PhD student of management at Texas A&M University

Arohini Narain, Proprietor, Writer’s World.

About the writer

Vineet R Bhatt is an Editorial Consultant at the Indian school of Business (ISB).

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