The Impact of Green Labels on U.S. Hotel Net Operating Income: Operating Statements Analyses

This paper shows LEED certified Hospitality properties exhibit increased expenses and earn lower Net Operating Income (NOI) than non-certified buildings. Energy Star certified properties show lower overall expenses than non-certified buildings with statistically neutral NOI effects. Using a custom sample of all green buildings and their competitive data set as of 2013 provided by Smith Travel Research (STR), the paper documents potential reasons for this result including increased operational expenses, potential confusion with certified and registered LEED projects in the data, and qualitative input. The qualitative input comes from a small sample survey of 5 industry professionals. The paper provides one of the only analyses on operating efficiencies with LEED and Energy Star hospitality properties.