SUSTAINABLE HOTEL INVESTMENTS
Green BuildingCost Effectiveness Analysis
3rd Annual Turkey Hotel Expansion SummitSeptember 13, 2013Erdem Şatıroğlu
Project ManagerCivil Eng. (B. Sc.)GEMDSE Project Management
Presented by,
Is it possible?Save the world, earn the money?
Increased Investment
Cost
Reducing environmental
impact
Lower operating
costs
Increasing occupant
productivity & health
Improved Image
Higher Value & Sale
Prices
Is it truth?
Life Cycle & All
Assesstment
Green Building Certification
Monitoring & Commiss.
Green Building Design
Accepted Constr.,Equip., FF&E, OS&E
GREEN BUILDING - Flow & Impact DiagramMeasurable Operating Systems
Decreased Operation Costs*
Controllable Life Cycle Costs
Gaining Competitive Advantage
Customer Loyalty / Green Consumers
Employee Retention
Increased Employee Productivity
More Healthy Occupant
Awards and Recognition
Regulatory Green Compliance **
Increased Brand Value / Higher Sell Price
Higher NPV in All Terms
INCREMENTAL COSTS BENEFITS
*: Considered some maintenance cost increasing
ANALYSIS APPROACH in THE CASE STUDY
• Analysis is based on a proposed project.
• Incremental costs are analyzed by the requirements of LEED* Ratings.**
• Hotel location : in a City
*LEED ( Leadership in Energy and Environmental Design) is one of the building certification system about
Green Building. Its process developed by U.S. Green Building Council. ( www.usgbc.org )
** OTHER MAINLY COUNCILS: BREEAM ( www.breeam.org ) , DGNB ( http://www.dgnb.de )
LEED – ImplementationsNew Construction and Major Renovations*
Existing Buildings: O&M**
Commercial Interiors**
Core and Shell**
Retail
Schools
Homes
Neighborhood Development
Healthcare
* : In this study, NC & MR are considered primarily.**: Other applications that may be relevant to hotel investment.
LEED – Categories / Prerequisites / Credits
Category Prerequisites Credits Possible Points
Sustainable Sites (SS) 1 8 26Water Efficiency (WE) 1 3 10Energy & Atmosphere (EA) 3 6 35Materials & Resources (MR) 1 7 14Indoor Environmental Quality (IEQ) 2 8 15Innovation & Design Process (ID) None 2 6Regional Priority None 1 4Total 8 35 110
LEED – Detailed Acvtivities
LEED – Certification Levels
LEED 2009 New Construction Certification Levels
Certified: 40 - 49 pointsSilver: 50 - 59 pointsGold: 60 - 79 points Platinum: 80 points and above
CASE STUDY - DescriptionBefore green hotel decision,• The projects are designed as appropriate a traditional hotel building.• Technical Specifitaions are prepared.• Bill of Quantities (BoQ) are done from the idea until the opening.After green hotel decision is taken,• Building Design is created appropriate as a Green Hotel.• Technical Specifications are prepared as “green” in according to LEED.• Incremental “green” costs are adapted to alternative BoQ.• The specs are adapted into the project and also applied into BoQ to obtain LEED-
Certified level.• The specs are continued to be adapted into the project to obtain LEED certification
on level by level basis.• IMPORTANT NOTICE: Some of green specs have no influence on incremental costs
and even might have a cause of saving. (e.g. regional priority, appropriate design …)
CASE STUDY –Incremental Cost Sustainable vsTraditional by Construction Titles
* There are many statistical reports between 2002 and 2010 internationally which are declared the effectiveness ratio between 1% - 10%.
CASE STUDY – Total Incremental Costs Effects
SUSTAINABLE COSTS EFFECTIVENESS TO TRADITIONAL COST for NEW CONSTRUCTION / in according to LEEDS
Sustainable Cost Effects (%) Average Effect (%)
Certified 6,91%
9,92%Silver 8,69%
Gold 10,88%
Platinum 13,20%
Sustainable cost effects may be decreased depend on by;
- Goverment or local incentives
- The scale of economy,
- Increase in green products & green suppliers.
BENEFIT & SAVINGS
Energy Cost
Water Cost
Operational Cost
Healthcare Expenses
Waste Stream to be Sold
FINANC.& SOC. BENEFITS EFFECT MONEY SAVINGS WHEN?
from opening
from opening
from opening
from opening
from opening
Consumption of raw materials
CO2 Emissions
Environment Care
Indoor Env. Quality
Employee Productivity
More Healthy Occupant
Increased Brand Value
Green Consumerisim
Measurable Systems
Save the World
Sustainability
Higher NPV
Higher Sales Price
Profit Increase
Customer Loyalty
Risk Mitigation
GROUPS of CONSTRUCTION ACTIVITIES
Soft Costs Construction (inc. Elev&Escal.)
Power Suppl. & Electricity
Mechanical Works FF&E OS&E
Pay-Back Time not applicable 9 – 12 yrs. 6-8 yrs. 4-6 yrs. not applicable not applicable
Acceptable Average Pay-Back Time 8-10 yrs.**: Financial benefits are not included in the calculation of pay-back.
PAY-BACK PERIOD Depends on Incremental Cost
Some Notices:
• The cost of supplying related to water & electricity should be investigated carefully! (e.g. for traditional
E&W tariffs, water supplying costs are 7,66 TL/m³ in Istanbul, 1,58 TL/m³ in Sanliurfa.)
• Government and/or local incentives should be contemplated.
• Selection of Hotel Site influences infrastructure costs dramatically.
• Pay-back period is effected by the design criteria which is used in comparative calculations.
Yes, It is!
Is it possible?Save the world, earn the money?
Thank you for your listening.
Erdem Şatıroğlu – PM – Civil Eng.GEMDSE Project Management - Istanbul / TRPhone : +90 212 415 54 84Mobile : +90 532 486 71 02E-mail : [email protected]
