Sternlicht Luxury Hotels Tap Carbon Offsets for Loyalty Program

Billionaire Barry Sternlicht is pitching frequent guests at his company’s hotels on a new loyalty proposition: Instead of using points to pay for free stays or room upgrades, spend them on carbon offsets.

The new initiative, which SH Hotels & Resorts calls “Mission by SH,” resembles other hotel loyalty programs in most ways, with members earning rewards for spending money at the properties. But in addition to spa time or personal-training sessions, guests can use the points to offset carbon emissions.

The company tested the program at the 1 Hotel South Beach in Florida at the end of last year and will bring it to the Baccarat Hotel New York, as well as properties in Brooklyn, West Hollywood and London.

Guests will earn rewards worth as much as 4% of the money they spend at the company’s hotels, where rates can top $1,000 a night. The credits can be used to fund forest preservation in the U.S., wind power projects in India and other initiatives.

Sternlicht Luxury Hotels Tap Carbon Offsets for Loyalty Program

“We want to direct guests to carbon neutrality,” said Arash Azarbarzin, chief executive officer at the company. “Or they can get a massage.”

The lodging industry has been grappling with sustainability issues. Hotels commonly ask guests to reuse towels and forgo fresh linens, and most major companies are moving toward eliminating single-use plastic containers for cosmetics. Larger hotel owners have invested in more-efficient building systems, which can help reduce costs.

SH Hotels, a subsidiary of Sternlicht’s Starwood Capital Group, has targeted green-minded consumers in the past. Its 1 Hotel brand promises travelers a more sustainable version of the luxury hotel, with properties designed around lush plantings and reclaimed materials.

SH Hotels is not the first travel company to offer carbon credits to customers. Spain’s Melia Hotels International announced plans to let loyalty members use points to pay for offsets in 2019.

The concept of carbon credits, which let companies and individuals offset their carbon footprint by funding projects that reduce emissions, has a mixed reputation.

Nature Conservancy, the largest U.S. seller of carbon offsets, has said that it’s conducting an internal review after critics said that the organization facilitated the sale of meaningless carbon credits to corporate clients.

©2021 Bloomberg L.P.

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