How do you calculate ROI for sustainability measures in a hotel?

The ROI of sustainability investments includes three key components:

1. Direct Financial Returns (Hard Savings):
   • Lower costs for utilities: electricity, water, gas, waste
   • Reduced use of food, disposables, and materials
2. Indirect Returns (Soft Benefits):
   • Higher occupancy and guest willingness to pay (e.g., ESG-compliant bookings)
   • Stronger brand and guest loyalty
   • Better employee retention via purpose-driven culture
3. Risk Mitigation:
   • Avoid carbon taxes and environmental fines
   • Prevent reputational damage from greenwashing

Example: LED Lighting Investment

• Cost: €50,000
• Annual savings: €16,000
• ROI: (€16,000 / €50,000) × 100 = 32%
• Payback period: ~3.1 years → profit thereafter