2015
Sustainability Report
6 major markets
55 hotels
8,763 rooms
2.5 million guests
A
Message
from
Hersha's
CEO
EarthView® continues to materially reduce our hotel portfolio's environmental impact, enhance engagement in communities across the country where we do business, and positively impact our bottom-line. EarthView demonstrates Hersha's differentiated approach to managing our business as active owner-operators of high-quality hotels with a constant drive to innovate and build new capabilities.
During 2015, we implemented Guestroom Energy Management Systems across the portfolio in addition to other energy efficiency initiatives. Our work last year led to substantial energy savings across our portfolio and added to our competitive advantage versus lodging peers.
We were pleased that our sustainability efforts this past year were once again recognized by the industry. For the third time in four years, EarthView was awarded NAREIT's Lodging & Resorts Leader in the Light award for superior and sustainable portfolio-wide energy use practices and sustainability initiatives. Beyond the prestige of the award, the acknowledgement affirmed our commitment to sustainable environmental, community and financial practices, furthering our leadership position in the industry.
We take our responsibility to guests, business partners and investors to implement sustainable and innovative practices seriously. We will look forward to updating you on our approach to lowering our environmental impact and increasing value for all of our stakeholders.
Jay H. Shah
Chief Executive Officer
Hersha Hospitality Trust
OVERVIEW & PERFORMANCE
Hersha Hospitality Trust embraces environmental and community stewardship as integral to maintaining and building a successful and growing business. To pursue these objectives, we created the EarthView® program in 2010 with a cross-functional team from our hotels and corporate office.
EarthView takes a triple bottom line approach to sustainable hospitality. We are committed to implementing sustainable and innovative practices that will benefit the environment, our local and global communities, and positively impact a hotel's financial performance.
Our approach to sustainability is thoughtful and pragmatic. We apply a rigorous quantitative analytical methodology to measure our financial impact, in addition to our environmental and community impact. We are pleased with our results and EarthView's recognition as an award winning program, for its innovative practices, and steadfast commitment to sustainability practices.
At Hersha, we are committed to implementing sustainable and innovative practices that will benefit the environment, our local and global communities, and the performance of our business.
2015 AT A GLANCE
Financial
Impact
$4.8 Million
Since inception, EarthView has recorded $4.8 million in savings from energy initiatives implemented across our portfolio.
Environmental
Performance
16% Carbon Reduction
8% Water Reduction
45% Waste Reduction
Reduced energy consumption across our portfolio resulted in a decrease in carbon emissions by 16% per occupied room in comparison to our baseline year of 2010.
Reduced water consumption across our portfolio by 8% in comparison to 2010. Equivalent to 57 million gallons or 90 Olympic sized swimming pools.
Reduced waste sent to landfills across our portfolio by 45% in comparison to 2010. Equivalent to 150,000 cubic yards or 19,000 dumpsters.
Community
Engagement
21,000 Pounds of Soap
51,000 Clothing Items
$90,000 Raised
920 People Provided Access to Clean Water
Donated 21,000 pounds of soap to Clean the World, which created 58,000 new bars of soap that were sent to developing nations.
51,000 clothing items were donated by hotel clothing drives in 2015.
$90,000 was raised for Autism Awareness in 2015.
Provided clean water for 920 people for 21 years through funding from EarthView water sales.
Our focus
on the
environment
has increased
value for our
shareholders
Financial
Impact
EarthView has created $4.8 Million in utility cost savings since 2010
EarthView has driven savings by building efficiency initiatives with measurable and timely returns. Initiatives rolled out as part of EarthView's comprehensive approach to sustainability are designed to achieve an overall positive financial return and, to date, these initiatives have achieved a net savings of $4.8 million.
In 2015, we completed the installation of Guestroom Energy Management systems across 28 hotels in the portfolio. These systems reduce energy consumption while rooms are unrented or unoccupied. Once installed, these systems are able to reduce guestroom heating and cooling costs by 25% to 35%. With an initial capital investment of $2.1 Million, and annual savings of approximately $1 Million, the payback period for these systems is just over 2 years.
2015 ENERGY STAR Certifications
In 2015, eight of Hersha's hotels received the EPA's Energy Star Certification. Buildings that earn this Certification use 35% less energy and generate 35% fewer greenhouse gas emissions than similar buildings across the nation.
| PROJECT NAME | REGION | SCORE |
|---|---|---|
| Courtyard - Alexandria, VA | Washington DC | 86 |
| Hyatt House - Gaithersburg, MD | Washington DC | 85 |
| Hyatt House - Pleasanton, CA | West Coast | 85 |
| Holiday Inn Express - Manhattan, NY | New York City | 80 |
| Hampton Inn - Washington DC | Washington DC | 77 |
| Courtyard - San Diego, CA | West Coast | 76 |
| Hyatt House - Scottsdale, AZ | West Coast | 75 |
| Hilton Garden Inn - JFK Airport, NY | New York City | 75 |
Hersha embarked on an LED (light emitting diode) retrofit across our portfolio in 2015. LED lighting uses less electricity than fluorescent and incandescent lighting to produce the same quality and color of light. Additionally, LED lighting has a longer lifespan which translates into lower replacement costs, less maintenance, and higher guest satisfaction. Our hotels had a total net capital cost of $1.1 Million. With annual electricity savings of just under $800,000, the payback period is approximately 1.5 years.
LED Savings Impact on Our Hotels
Our focus on sustainability also translates to how we engage with potential guests at our hotels. For many of our business transient guests who are increasingly interested in tracking their environmental footprint while traveling, we are equipped to provide environmental information for Request for Proposals (RFPs) from corporate travel managers as well as leisure guests seeking a green stay while traveling.
Additionally, sustainability is not only becoming an expectation for guests, but also for regulatory bodies. Over the past several years, we have seen regulations for energy, water, waste, and reporting increase across the U.S. and in many of Hersha's core markets. As environmental and social initiatives move from electives to mandates, Hersha is well positioned to comply.
For the third time in four years, Hersha was awarded NAREIT's Lodging & Resorts Leader in the Light award for superior portfolio-wide energy use practices and sustainability initiatives. Last year, Hersha was also awarded the GRESB Green Star award for achievement in the Global Real Estate Sustainability Benchmark.
Resources that we use to heat our hotels, light our lobbies, and fill our pools are essential to our everyday operations. Therefore it is imperative that we are responsible stewards of the environment, especially as we continue to grow our business. Our unique approach to environmental preservation allows us to work across our company to implement innovative initiatives that reduce our environmental footprint.
Environmental
Performance
Changes in the planet's climate have the potential to impact our business as well as the communities in which our hotels operate.
The EarthView program was implemented in 2010, making it our baseline year for tracking and managing energy, water, carbon emissions, and waste data. Today, we have sophisticated and reliable systems in place which allow us to not only track actual data, but also to share this data with the teams at our hotels, our procurement teams, as well as the cities in which we own and operate hotels. The ability to monitor this data allows us to not only flag potential issues, but also to identify opportunities for improvement and share best practices across our portfolio.
Each hotel utilizing the EarthView program has a significant role in ensuring the innovation and evolution of the program. Associates are introduced to EarthView during their initial orientation upon hire. Larger hotels have "EcoLeader" teams that meet regularly to discuss results and opportunities at their hotel. Hersha has implemented a sustainability resource center on our internal intranet page where associates can access training materials, learn how to implement various initiatives, and share ideas.
We recognize that our guests play an important role in creating an environmentally sustainable community and business. To that end, we offer guests the opportunity to help us in our mission by providing information and inviting them to participate in initiates such as in-room recycling and towel and linen reuse programs. Additionally 100% of Hersha's hotels owned for more than one year are certified under TripAdvisor's GreenLeaders program. This program allows us to share each hotel's green practices with guests who are interested in booking a green stay.
"Lots of recycling, good environmental practices, very green, eco-friendly, and trendy."
- Guest at NU Hotel, Brooklyn NY
"I loved that this hotel was eco-conscious, from its construction to its everyday practices. So important, and well-done here."
- Guest at Hyatt Union Square, NYC
Energy
In 2015, Hersha continued to make strides in its commitment to sustainable hospitality. Starting in Q2 2015, each hotel across the portfolio underwent a lighting audit to determine opportunities for LED (light emitting diode) replacements. LEDs are two to three times more efficient than incandescent and fluorescent lighting with a much longer lifespan. Once installed, this lighting will save 5.5 million kWh of electricity and $800,000 annually.
Initiatives such as LED Lighting and the implementation of Guestroom Energy Management Systems have led the way for energy savings across the portfolio. In 2010, the reduced energy consumption across our portfolio resulted in a decrease in carbon emissions per occupied room of 16% versus our baseline year of 2010.
16% Carbon Reduction
Reduced carbon emissions per occupied room versus our baseline year of 2010.
Water
Water was under particular strain in 2015, particularly on the West Coast. The EcoLab Aquanomic Laundry program was implemented across all hotels with in-house laundry. This system has helped our hotels reduce costs of natural gas and water associated with laundry cycles by 13% by utilizing cold water and shorter washing times.
These initiatives, combined with water control valves and new water efficient irrigation systems have resulted in reduction in water usage per occupied room by 8% versus our baseline year of 2010.
8% Water Reduction
Reduced water usage per occupied room versus our baseline year of 2010.
As a hotel company, we engage with people from all around the world - from the guests that check in to our rooms to the farmers who grow the food we serve to the craft workers who build the furniture in our lobbies. The choices that we make as a company have an impact across our entire supply chain as resource constraints continue to grow. For this reason, we work to create a more sustainable supply chain which includes converting to recycled materials where possible, reducing unnecessary disposable products, using bio-based products for laundry and cleaning, and establishing an energy and water efficient purchasing policy.
Recycling
In 2011, Hersha implemented in-room recycling in all guest rooms across the portfolio. We then were able to identify several other waste streams to reduce waste generated at our hotels as well as to create a better place to live, work, and play for our guests and associates.
We endeavor to use products that have recycled content wherever possible and have created a set of sustainability-minded guidelines that inform our development and renovation processes. We use only low and no-VOC paints and work with our contractors to donate, reuse, or recycle any furniture, carpet, and other materials which would otherwise be discarded in a renovation.
45% Waste Reduction
Reduced waste sent to landfills across our portfolio versus our baseline year of 2010.
HOTEL SPOTLIGHT
In November, two Hersha hotels received awards from the New York City Hotel Association. Hyatt Union Square was awarded the 2015 Environmental Protection Award and Holiday Inn Express Times Square was awarded the 2015 Sustainability Innovation and Leadership Award.
Our West Coast portfolio installed water control valves in all guestroom sink faucets and shower heads. These units reduce water usage without sacrificing water pressure for our guests.
Our Hampton Inn DC hotel installed 2 Electric Vehicle Charging Stations. These stations will allow costumers with Electric Vehicles to charge their vehicles during their stay as well as to reduce emissions and promote clean-energy vehicles.
The Independent Collection (IC) has implemented the use of L'Occitane bath products in all IC hotels. This initiative is designed to provide high quality amenities to guests, reducing waste by using dispensers which can be refilled with bulk product rather than using containers that are for one time use only.
Community
Engagement
In 2015, Hersha partnered with Autism speaks to host over 30 families of children with Autism at the Philadelphia Zoo for a fun-filled "Blue at the Zoo."
The philanthropic achievements of our associates earned Hersha Marriott's Spirit to Serve Award in 2015. The award honors Marriott partners that demonstrate extraordinary associate engagement to ensure that their communities are healthier, more vibrant, and more prosperous as a direct result of their hotels' efforts.
Since 2011, we have donated enough soap to produce over 350,000 new bars to families in need.
Community is one of Hersha's core values and we have a long tradition of social responsibility and community engagement. This tradition began with Hersha's founders, and continues today with the EarthView program. As a company with hotels across the U.S., we engage in community stewardship that spans both here and abroad. In 2015, Hersha supported over 115 organizations.
This focus on community stewardship is important to our guests, investors, and business partners who would like to ensure they engage with corporate citizens that uphold ethical standards and values, and operate in a way that is beneficial to the communities in which they operate. In 2015, Hersha launched an Autism Awareness Campaign in collaboration with Autism Speaks. Through this campaign, supported by our hotels, corporate offices, and thousands of guests nationwide, we were able to donate over $90,000 for the research and awareness of Autism.
In 2012, we developed a corporate philanthropy program with a designated committee that convenes monthly. Through this program, we have identified specific areas of philanthropy where we can have the most impact including community stewardship, education, and the arts.
In 2015, we began a partnership with the Germination Project, a Philadelphia-based non-profit that aims to provide young leaders with opportunities to develop their skills and energize their ambitions. In September, Hersha hosted a trip for the 14 high school fellows to the New York Stock Exchange as an opportunity for them to learn about the stock exchange and global markets.
We continue to embrace our ongoing partnerships with organizations such as United Way, Cornell University, and the AH&LA Educational Foundation as well as fostering business practices that promote the public good.
We are proud to continue our partnership with Clean the World, the not-for-profit organization that collects partially used soaps and other hygiene amenities from our hotels. Clean the World sanitizes these items and distributes new bars of soap to communities around the world where the leading causes of death include hygiene related diseases, particularly in children. In 2015, we donated 21,000 pounds of soap and bottled amenities to Clean the World, which translates to over 58,000 new bars of life-saving soap distributed to children and families in need.
EarthView launched a private label water bottle sold at our hotels that is made from 100% recycled material and is 100% recyclable. For each bottle purchased by a guest, we donate $1 to clean water projects around the world. We beta tested the program in 2014 and in 2015, rolled it out to 10 of our hotels. We raised over $23,000 which will provide clean water to 920 people for 21 years. In 2016, we will continue to expand this program to additional hotels in our portfolio.
HOTEL SPOTLIGHT
The Hyatt House Pleasanton Hotel partnered with 1Closet to be an official drop off location for clothing donations. These items are given to youths in foster care, youth homes, and churches. The hotel collects and delivers approximately 1,500 items of clothing monthly.
Associates from Hersha hotels in New York City utilized pillowcases to create 50 dresses for young girls in Africa. The dresses were donated to organizations such as Little Dresses for Africa and Dress a Girl Around the World. The hotels also were awarded the 2015 HANYC Sustainability Innovation and Leadership award for their efforts.
