Dubai’s FIVE Hotels turns sustainability into serious profit

In an interview with Arabian Business, FIVE’s Group CFO, COO, and CSO Jaydeep Anand revealed how the company’s relentless focus on reducing carbon emissions and resource usage has directly fuelled its robust financial performance.

“There is no point in painting harmonious visions of the environment or society without an economic case,” Anand said. “Without financial security, whether a human or a business, they will simply cease to exist.”

And FIVE is certainly securing its financial future. In 2023, its two Dubai properties achieved a staggering 92 percent average occupancy rate, 27 percent higher than competitors. With an average daily rate of $304 and total revenue per available room of $702 – 2.3 times higher than its comp-set in the market, FIVE saw total revenue soar 363 percent from 2019 to 2023, hitting $569 million.*

The secret? Ruthlessly measuring and managing resource consumption across its hotels. “We don’t just report on our carbon footprints but work to explain down to the KWh or litre why we performed the way we did,” Anand explained. Dynamic action plans from monthly multi-stakeholder reviews drove new sustainability projects and utility savings.

The results have been extraordinary – a 63.6 percent reduction in carbon intensity, 40.6 percent less water per capita, and 34.4 percent less waste per capita versus 2020 baselines. Crucially, these massive efficiency gains underpin the company’s towering profits.

“Whenever deploying a system to reduce emissions or utility use, we first conduct a cost-benefit analysis,” Anand said. “Performing ROI calculations before investing is core to our work.”

FIVE’s green initiatives

However, Anand insists some sustainability projects are worthwhile even without immediate financial returns, citing FIVE’s pioneering $350 million green bond issued after earning the industry’s only “A” ESG rating from ISS.

From onsite solar to hydroponic greenhouses and comprehensive recycling, FIVE pulls every lever to promote “sustainable indulgence” for eco-conscious guests. It’s obliterating industry norms – reporting carbon footprints 500 percent below the UAE resort average and 300 percent under US luxury hotels.

Maximising occupancy is also key, allowing FIVE to serve more guests within a fixed resource budget. “The more activity we can service, the smaller impact per guest,” Anand explained simply. The group maintains occupancy rates of over 90 percent year-round and 38 percent repeat guests.

“Our popularity should be appreciated for its environmental benefits, because we are conducting business at efficiencies five times lower than our peers.”

FIVE’s audacious sustainability initiatives differentiate it from conventional luxury competitors and clearly provide a competitive edge. With the boom in impact investing and green finance, other hotel groups ignoring these issues risk being left behind.

“Everything we do seamlessly aligns with our “Sustainable Indulgence” philosophy, motivated by the growing eco-consciousness among guests and the importance attached to enjoying experiences, responsibly. Planes are not disappearing, nor is luxury,” he said.

“FIVE looks at how we can take spaces, products, experiences and deliver them in a cleaner, more efficient and climate-forward way without compromising quality and luxury.”

*Pro forma revenue includes the effect of acquisition of Universo Pacha S.A as if the business combination had been completed at the beginning of the year 2023.