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2 major hoteliers move to trash tiny shampoo bottles


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2 major hoteliers move to trash tiny shampoo bottles

Sometime in the late 1980s, 23-year-old Mike Marshall was running a Comfort Inn in Salisbury, Md., when he heard about what seemed like a revolutionary idea: wall-mounted shampoo dispensers instead of throwaway bottles.

Tallying the toiletries he would conserve, "I thought it was a great way for me to save money so I could get my bonus as a general manager," Marshall recalled in an interview. He was wrong. The dispensers he installed in 12 rooms were a flop with customers, who never fully trusted that they were secure, and he had them torn out within a year.

Three decades later, though, the idea's time may have come: Two of the world's largest hotel brand companies are moving to eliminate small bottles of shampoo, conditioner, body wash and other products, in a shift they say will prevent millions of pounds of plastic waste. The pivot is unlikely to save hoteliers large amounts of money, industry observers say, but will allow brands to burnish their reputations for environmental friendliness.

Denise Naguib, vice president of sustainability and supplier diversity at Marriott International Inc., said customers at the company's luxury hotels — including those under the Ritz-Carlton, J.W. Marriott and St. Regis brands — are especially focused on their environmental impact, according to market research.

SNL Image
Some large hotel brands are moving to eliminate small toiletry bottles like these in favor of bulk dispensers.
Source: S&P Global Market Intelligence

The "altruistic component" of travel is important to such travelers, Naguib said.

"They want that amazing luxury experience," she said, "but they also don't want to feel guilty on the back end for having created waste, or using more resources than absolutely needed."

Bulk dispensers of so-called bathroom amenities have already been in place in many lower-priced hotels, including roughly 1,000 Marriott-branded properties, partly as a cost-saving measure. But the company said in August that it plans to complete the transition in all of its more than 1.3 million rooms by the end of 2020. The company's announcement followed a similar move from InterContinental Hotels Group PLC, which said in July that it will change to bulk dispensers in all of its nearly 843,000 worldwide rooms by the end of 2021.

Marriott said its move alone is expected to reduce the company's annual plastic usage by 30%, preventing 500 million bottles, or roughly 1.7 million pounds of plastic, from entering landfills each year. The change follows moves by Marriott, Hilton Worldwide Holdings Inc. and InterContinental to phase out plastic straws and coincides with a bill moving through California's legislature that would ban single-use toiletry bottles at most hotels in the state by 2024.

"I think people probably are more aware, and they're more open to this now," said Marshall, now president and CEO of Marshall Hotels & Resorts, which manages 65 properties. He estimated that, at just one 250-room hotel he owns in Ocean City, Md., customers run through 10 to 12 shipping pallets of shampoo over the course of a summer.

From the brands' perspective, cost savings are likely not the point, he added.

"I think they're trying to tell the traveling public that, hey, we understand that we could be helping to destroy the earth's environment," he said. "So let's cut back on the plastics."

Focus on the mechanism

At both InterContinental and Marriott, the new dispensers will be incorporated into brand standards, meaning property owners will be responsible for installing them by specified deadlines. Hotel brand companies, which also include Hyatt Hotels Corp. and Choice Hotels International Inc., generally license their brand identities and booking systems to property owners, and sometimes manage the properties, while requiring the owners to maintain their hotels to certain specifications.

Marriott's Naguib said property owners will bear the cost of installing the new dispensers, and customers will not have the option — as they did in Marshall's early foray into bulk shampoo — of selecting miniature bottles instead.

"One thing that is really important is the delivery mechanism," she said. "We've worked really hard with a variety of our partners to look at what does this delivery mechanism, what does the bottle, look like? Is it part of a delivery mechanism, is it a floating bottle on the wall, is it sitting on a shelf?"

Dispenser styles will vary by brand and, though costs are still being determined, Marriott does not expect the shift to yield major cost savings to owners, she said.

Marshall believes the brand companies moving to bulk dispensers will likely find a way to "soft sell" the shift to owners regardless. "At the end of the day, they're going to say, 'Listen, you're going to spend a little bit of money up-front, but you're going to save this much money by not having to have all those individual units, and they're not going to be junking up the maids' carts,'" he said.

SNL Image
Bulk toiletry dispensers at a Home2 Suites by Hilton hotel (inset) and planned Marriott pump bottles.
Sources: S&P Global Market Intelligence, Marriott International Inc.

Richard Stockton, CEO of Braemar Hotels & Resorts Inc., which owns 13 hotels — including six managed by Marriott — said in an interview that bulk supplies will be cheaper, in large part because of the amount of product that is wasted when customers discard half-empty bottles. Still, he added, Marriott has told owners that it will use the money it saves through bulk purchases to buy higher-quality toiletries — an upgrade that he argued will lead to higher hotel revenues.

The bulk dispensers poll favorably, with roughly 75% approval from customers, Stockton said.

"You don't have these little bottles floating around and dropping; It's just a better way to deliver the amenity," he said. "So for guests, it's an improved experience, they recognize the sustainability benefits, and that ultimately reflects well on the owner, reflects well on the brand, and hopefully results in improved rates for hotel rooms."

Small dollars add up

In practice, Stockton said, the money owners spend on installing the dispensers will likely come out of their "furniture, fixtures and equipment" budgets — reserve funds, called FF&E for short, that hotel owners pay into regularly as insurance against unplanned expenses.

Michael Bellisario, a lodging analyst at Robert W. Baird, called toiletry costs "very small dollars that add up to dollars that matter — but still small, in the grand scheme of things."

Still, with revenue growth slow late in the current economic cycle, "these guys are scratching and clawing for every last dollar," Bellisario said. "More resort fees, more parking fees, the cost of a drink at the bar is more. They're getting more stringent on collecting cancellation fees, late fees, things like that."

With hotel customers seemingly ready for a change, Stockton said, bulk dispensers appear to be a positive development — from most angles.

"The one thing is, your guests can't take it home with them," he said. "To the extent that people use hotel rooms to stock their cabinets at home, that's going away. But that's how it should be. That's not why hotel rooms exist. It's not Costco."