A study of renewable energy technology adoption dynamics in the hotel sector

Abstract

In line with the Paris Agreement, the global hotel sector must reduce its carbon emissions by 66% by 2030 and 90% by 2050. Adopting renewable energy technology (RET) to produce electricity on site is one of the UN’s recommended tools for the hotel sector. Some hotels have explored certain sustainable practices such as light-emitting diode lights, T5 fluorescent tubes, motion sensors, the key-card system, and water-cooled chillers. However, several studies have reported low RET adoption in the hotel sector globally. There are limited studies exploring RET adoption in the hotel context. In response to a strong call to action to the hotel sector, this dissertation addresses this gap by identifying key dynamics that underpin RET adoption, how they influence RET adoption rate, and how these dynamics promote sustainability growth of RET adoption while balancing environmental, social and economic risks and benefits. The results of a systematic quantitative literature review indicate that RET adoption comprises interrelated sectors including technology and its economic viability, hotelier and tourist perceptions, the government and the environment. To incorporate complexity associated with interrelated dynamics, a systems thinking approach supported by a mixed method were used. The state of Queensland in Australia was selected as a case study to conceptualise the RET adoption dynamics. Queensland is an important tourism destination within Australia and internationally, and the number of hotels is growing. Despite Queensland having many incentive policies to promote RET uptake, adoption among the hotel sector is low. Thus, understanding the enablers to RET adoption in the context of Queensland could highlight its complexity and assist decisions to adopt RET in the service sector. Following interviews and structural analysis with stakeholders including hoteliers, the government, academics in tourism and engineering, and electrical providers, the complex dynamics associated with RET adoption in the hotel sector was visualised using a mind-mapping technique (i.e., causal loop diagram). The diagram indicates that those who stimulated the transitions were the government through its incentive policies and tourists by selecting or revisiting hotels. These same actors, however, also (unintentionally) formed a barrier. The government barricaded RET adoption by retracting the incentives policies before a wider adoption could take place. The tourists obstructed wider RET adoption by preferring renewable-sourced hotels and leaving hotels that are unable to uptake RET financially disadvantaged. To empirically test the conclusions drawn from causal loop modelling, a quantitative simulation (i.e., stock-and-flow model) was created. The results suggest that the absence of the government incentive policies caused a negligence impact on RET uptake in the hotel sector because the net present value of RET with 12% discount was already lower than those of the grid in the Queensland context. Instead, the results showed the technology price and performance were a better leverage to encourage adoption. This key finding indicates that, in the hotel sector context, where customer satisfaction is vital to business longevity, hotels may dismiss taking up RET despite its proven economic viability because it poses a risk of electricity disruptions and may compromise tourist experience. The quantitative model’s results contradict the causal loop findings, particularly the overconfidence in government policies, highlighting the usefulness of triangulating research qualitative and quantitative methods. Based on these findings, two recommendations were offered. First, the Queensland government is recommended to foster RET innovation and investment by rechannelling fund from programs that promote individuals (business included) RET adoption to programs that invest in RET innovation. Second, the hotel sector needs to take a leadership to adopt RET by creating a roadmap to innovation adoption. This dissertation contributes to the examination of opportunities to promote RET uptake in the hotel sector. It provides the basis with which to better understand the dynamics that could drive RET uptake, while identifying possible leverage points to more sustainable growth of RET uptake. In doing so, this research contributes to ongoing efforts to accelerate the transition towards a more sustainable, low-emissions hotel sector.