Kimpton’s Hotels

Group 4
• Agnes Joshua (17PT2-04)
• Pulkit Agarwal ( 17PT2-27 )

Earth Care Program • Namita (17PT2-23)

• Saurabh Paliwal ( 17PT1-53 )
Case Synopsis
• Kimpton's is a hotel chain with 39 hotels across North America &
Canada.
• It is credited with inventing the “boutique” hotel segment in 1981.
• It has long history of commitment of social and environmental
responsibility.
• Problem : Company build its brand by investing on care, integrity,
and uniqueness (Boutique Hotel) but other hotel chains were
catching up.
• Solution : Differentiate by innovative ways which address the need
and Value of customer. Earthcare is curial element of this strategy
• Challenge :
• Balancing twin objective : finical performance and social &
environmental responsibility
• Barriers and Challenges in adoption of new program
Kimpton’s Business
Philosophy and Strategy
• Business :
• Boutique Hotel in upscale segment .
• Business Travel 65%, Leisure Travel 35%.
• Philosophy:
• Providing Homely experience through Décor,
Service & Comfort
• Flexible corporate structure : Avoiding hierarchy
,Great Autonomy and Personal responsibility
• Social & environmental responsibility is part of
DNA
• National AIDS Fund , Dress for Success , Trust for
Public Land (TPL)
Strategy
“ All hotels are starting to look alike and act alike and we are the
counter point , the contrarians “

• Differentiation through blend of unique customer experience and

branding
• Every Hotel Tells a Story : Each of 39 hotel was based on unique style
and flavor they bring in (Adventure, Tranquility and Sensuality Italian
Romance, etc.)
• Brand need to stand for something : Benefits to community &
environment
• Kimpton care program and Earth care program are twin pillar of this
branding exercise
Green Initiative : Hotel industry
Source Consumption Ways to Address Scope
218 Galloon Water Fixtures 50%

New lights are

$ 3.8 B/year Efficient Lights
more efficient
Significant part of Aluminum ,Glass and Paper can be
Recycled
50% to 60% Waste is
28 pounds/Day Compostable, Waste Bill can be
reduced
Use Environment Friendly low VC paints and cleaning product
Overarching goal is to reduce Ecological Footprint
Earth Care Program
• Why Earth Care program ?- Branding Kimpton as community and
environment friendly company and is part of overall strategy of
differentiation.
• Conceived after success of Env solutions at Triton Hotel
• Vision of Program : Lead the hospitality industry in supporting a sustainable
world by continuing to deliver a premium guest experience through non-
intrusive, high quality, eco-friendly products and services
• Consultant Jeff Slye prepared a strategy report for greening the product
and process Kimpton use
• Communication strategy for both internal and external stakeholder
developed.
• Two Rule of Program :
• Couldn’t cost more than what was already budgeted for operations and
capital improvements,
• couldn’t adversely affect customer perceptions or satisfaction
Earth Care Program
• A Network of Eco champions were created . The national “lead” (Pace)
and “co-lead” (Pinetti) would head up the communications effort, and
would be accountable for its success
• A team of national eco-product specialists across each category (Water,
Energy, Recycling ) also put together with responsibility including
• soliciting staff input,
• identifying and evaluating greener products as potential substitutes for existing
ones
• Phase wise Introduction of Program :
• Phase 1- Introduce only non-disruptive and cost-reducing operational practices.
• Phase 2- Water and energy conservation
• Phase 3- For Renovation and New Hotels (Non VC paints, Energy efficient AC
appliances )
 Q1 : Benefits of environmental sustainable
initiatives & their costs
Company Customer and Employee Society

• Less water & energy consumption
• Waste reduction
• Recycling of products
• Reuse of linens and Laundry
• Sustainable business practices
• Contribution to Bottom line
• Increase Brand awareness through
PR from media
• Helps in generating new business
• Employee motivation • Reduction in usage of non toxic
• Customer loyalty materials
• Feeling of contribution for social • Responsible usage of scare natural
and environmental cause. resources and Commons
• Health benefits of Non VC paints
and less toxic cleaning supplies on
employee and Customer

Benefit would be tangible and Intangible spread across time frame ( Short Term and Long Term )
Q1 Cost of Initiatives
• Upfront High replacement /switching cost of organic products.
• Slower payback or lower rate of return on investment.
• Performance risk of replacement products
• Some water saving shower heads and energy-saving light bulbs could lower
hotel’s diamond rating
• Unfair advantage to company who are not investing in these
initiatives
• Intangible impact on customer perception
• Organic cotton and non VC paint have no direct perceptible benefits
Q.2 Benefits & Justification of Earth care
Program to Management- Business case
• Hotel industry is resource Intensive Industry
• Cost of resources such as energy, water and waste
Opex Saving disposal are high.

Competitive • Image intangible yet a priceless assets

• Strong Brand as a key differentiator
Advantage & • Benefits of CA include price premiums, attractiveness
Company to customers, improved market share, creation of new
markets.
Image
Q.2 Continued
• Environmental awareness increasing day by day
Customer • Environmental initiative plays role in a guest’s choice of a
facility.
Retention • Returning customers may base this decision on the level
of environment commitment only

Regulatory • Preemptive initiatives reduces the risk of strong

regulations
Compliance • Timely investment in green initiative reduced upfront
cost when regulation becomes mandatory
Q.2 Continued
• Employee are the biggest asset for any service business
• Environmental program are effective means of generating enthusiasm
and motivating staff to work as a team to achieve a common purpose.
Employee Loyalty • Employee identify with an employer whose principles and practices are
in tune with current trends

New Business • New business from recognize green initiatives : Green Lodging program
of California State $ 70 Million
Generation • Many states mandated to select hotel only from Green Lodging program

Risk Management • Helps firm in doing business in Ecological sensitive areas and saves them
from undue activism of NGO and social groups
Q3. Earthcare Program: Challenge & Ways to
overcome
 Resistance by General managers to centralized imperatives
 Make General Managers key stakeholders
 Give them freedom to customize program as per their needs
 Intercompany competition/awards to promote faster adoption
 Resistance by hotel staff to new products and procedures
 Include initiative and their importance in regular training programs
 Reward and recognition system for employee adherence to initiatives
 Slower payback period
 These initiatives are strategic and cost benefit analysis should be done from
long term benefit like enhanced customer perception and brand equity
perspective
Q3 Continued..
 Intangible benefits
 Increasing the customer awareness about initiatives
 Aggressive marketing campaign
 Difference in regulatory requirement in states
 Prioritize roll out in high regulated Areas
 Company is doing it as it is the right thing to do
Q4: Further Steps to Institutionalize the
environmental commitments
Process
Regular audit of key process to
explore further possibilities for
Green Initiatives
Supplier Audit for conformance of
Green Practices
Engagement with external
consultant
Target v global certification
Personal
Comprehensive & Regular Training
program so that Green becomes
the DNA of service culture
Reward and Recognition Progress
to encourage and foster the
Culture of doing good for benefit
of society
Make Env Initiative part of roles
and responsibility
Management
5/10 year Vision program with
aggressive target for water ,Energy
and carbon foot print reduction
Regular Communication program
to promote initiatives
Set Yearly Target for green initiative
and allocate separate Budget
 Q5:Measure of
success of
Earthcare program
and reporting to
stakeholders

Measure the success of program through triple bottom-line

concept
Q5:Measure of success of Earthcare program
and reporting to stakeholders
• Measure the success of program through triple bottom-line concept
1. Financial,
• New business generated through companies focusing on Green initiatives
• Carbon Credit generation and trading
• Reduction in Water ,Energy and Waste disposal bills
2. Social
• Productivity increments
3. Environmental
• Reduction in usage of commons
• Reduction in Waste
• Reduction in Food waste
Q5 Measurement Continued
Q5 Reporting
• The Global Reporting Initiative (GRI) Sustainability Reporting Guidelines
provide a globally recognized framework for companies to measure and
communicate their environmental, economic, social and governance
performance.
• GRI Standards are the first global standards for sustainability reporting and
are a free public good
"The world has enough for
everyone's needs, but
not everyone's greed,"
CSR & Philanthropy • Corporate social responsibility
encompasses dual objectives—
pursuing benefits for the business and
for society.
• In smart partnering :
• Focus of the business moves from
Avoiding risks or enhancing reputation
and toward improving its core value
creation ability by addressing major
strategic issues or challenges.
• For society, the focus shifts from
maintaining minimum standards or
seeking funding to improving
employment, the overall quality of life,
and living standards
• The key for each party is to find
creative solutions to critical social and
businesses challenges.