Hoteliers should by now be aware of the recent CRC Energy Efficiency Scheme (the "CRC Scheme") that came into force in April 2010 and understand the duties and obligations imposed by the Scheme on them. For a summary of the Scheme's operations, click here.
As a major energy user, the hotel industry certainly has a role to play in addressing global warming. By establishing sound energy efficient practices on their premises, each and every hotel can do its part for the environment whether or not it is fully subject to the CRC Scheme and at the same time gain financially.
What can hotels do?
Without diminishing the guest experience, there are numerous measures that are neither complicated nor expensive that hotels can take:
For specialist advice on such measures, hoteliers could engage the services of a professional consultancy to undertake a portfolio-wide review of their energy use. Alternatively, hoteliers may wish to make use of free advisory services such as the one run by the Hospitable Climates programme. Through the programme, a hotel would be able to assess its current energy efficiency performance level in comparison to establishments of a similar age and characteristics using an online benchmarking tool, introduce improvement programmes, reduce energy wastage and also make informed decisions about investing in new technologies in order to become ever more energy efficient: for more information, click here.
The Early Action Metric
Hotels may wish to implement polices and practices under the Carbon Trust Standard or another equivalent scheme which has been certified by the Government in order to benefit from the early action metric ("EAM") in the performance league table of the CRC Scheme. The EAM has been included within the CRC Scheme to give credit to businesses which have undertaken good energy management practices in the early stages of the CRC Scheme and prior to the Scheme's implementation. The EAM will count towards 100% of the metric used to assess performance league table positions in year 1 of the CRC Scheme, going down to 40% in year 2 and 20% in year 3. Details of the Carbon Trust Standard can be found here.
Further guidance on the application of the CRC Scheme to franchises
On 15 June 2010, the Environment Agency published further guidance on defining franchises for the purposes of the CRC Scheme. The guidance assists in the determination of the extent of a hotel's participant franchise group in the CRC Scheme. Whilst a managed hotel is distinguished from a franchised hotel in the hotel industry, any managed hotel that is operated under the manager's brand may be treated as part of a franchise for the purposes of the CRC Scheme: Generally speaking, a franchise which satisfies all four of the following rules will be required to participate in the CRC Scheme as part of the franchisor's group:
Rule1: There is an agreement between two undertakings (the "franchisee" and the "franchisor") for the sale or distribution of goods, or the provision of services.
Rule 2: The franchisee carries on business using the name provided by the franchisor in the agreement.
Rule 3: The premises where the franchisee carries out the franchise business are used exclusively for that business.
Rule 4: The presentation of those premises must have an internal or external appearance agreed by the franchisor and it must be similar to that of other premises operating a franchise business under an agreement with the franchisor.
A typical franchised or managed hotel should satisfy all four rules. Although Rule 3 may appear to give concern it is noted that under the guidance, a franchisee may carry out ancillary activities on-site and this would not be fatal to a finding of exclusivity if the franchisor benefits financially from such activities. If the franchisee alone benefits financially from such activities, the exclusivity link is likely to be broken.
CRC Registration deadlines
Hoteliers are reminded that the deadline for CRC registration is 30 September 2010. The deadline for registering disaggregated groups has recently been extended by the Environment Agency to 31 July 2010. Businesses wishing to benefit from the disaggregation rules should however inform the Environment Agency of their intent to do so at the earliest opportunity.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 01/07/2010.
