Newsline / HVAC Commercial Market

LEED Certification Boosts Hotel Revenue

Certified Hotels Boast 'Substantial Increases' in Daily Rates, Revenue

ITHACA, N.Y. — A study from Cornell University found hotels gain a revenue benefit when they are certified under the Leadership in Energy and Environmental Design (LEED) sustainable building program. By comparing LEED-certified hotels with a competitive set of noncertified hotels, the study found substantial increases in average daily rates and revenue per available room 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 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, absolutely, yes.”

The study compared the performance of 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 hospitality research. The researchers found that the LEED revenue benefit applied in hotels of all types, although most hotels in the study were upscale or luxury properties located in urban or suburban locations.

Publication date: 9/1/2014 

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