Carbon Accounting for Hotels and Hospitality in Australia

Ninety hotels received a NABERS Energy rating in the 2023-24 financial year. That's an 82% jump from the year before, and it sounds like progress — until you remember there are roughly 5,000 hotels in Australia. Under 2% of the sector has bothered to measure how much energy it actually uses in a standardised way.

That's about to change. And not because hotel operators suddenly care about carbon for its own sake. It's because the Australian Government now requires its employees to consider NABERS Energy ratings when booking accommodation. A minimum star threshold for government travel could be in place by 2026-27. Corporate travel buyers are following the same playbook — sustainability credentials are appearing alongside room rates on Booking.com and Google Travel. If you operate a hotel in Australia and you can't demonstrate your energy performance, you're going to start losing bookings you never even knew were up for grabs.

Meanwhile, ASRS mandatory climate reporting has caught the big operators. Group 1 entities — $500 million revenue, $1 billion in assets, or 500 employees — have been reporting since January 2025. Accor runs 406 properties and over 65,000 rooms across the Pacific. IHG and EVT round out the top three operators managing a third of total room supply in Australia and New Zealand. These are Group 1 or Group 2 entities. Their sustainability programs are pushing reporting requirements down to individual properties whether those properties are ready or not.

Carbon accounting for hotels and hospitality in Australia is different from office buildings or warehouses. Hotels run 24 hours a day. They burn natural gas for hot water and commercial kitchens. They leak refrigerant from HVAC systems and walk-in cool rooms. And the question of who actually reports the emissions — owner, operator, or brand — depends on a management agreement that most sustainability managers haven't read.

Why hotels are a unique emissions problem

A 200-room full-service hotel is basically a small city running inside a single building. HVAC alone accounts for roughly 52% of energy consumption. Lighting takes 20%. Equipment — lifts, laundry, pool pumps, back-of-house systems — makes up most of the rest. Gas consumption for hot water and kitchen cooking adds a substantial Scope 1 component that office buildings simply don't have.

The energy intensity varies wildly by star rating. Five-star properties consume nearly twice as much energy per room as three-star hotels. A luxury property with a heated pool, full-service restaurant, day spa, conference centre, and 24-hour concierge has a fundamentally different emissions profile than a 60-room motor inn with a breakfast room and a vending machine.

This matters because there's no single benchmark that works across the sector. The Hotel Carbon Measurement Initiative — used by over 30,000 hotels globally — measures carbon per occupied room per night. The global benchmarks range from under 12 kg CO2-e per occupied room (rated "very low") through to over 55 kg CO2-e ("very high"). Luxury hotels typically land around 29-50 kg CO2-e per room night. But those numbers depend heavily on the local grid emission factor, climate zone, and whether the property runs on gas or electricity for heating and hot water.

In Australia, that grid factor makes an enormous difference. A hotel in Victoria running on grid electricity generates Scope 2 emissions at 0.78 kg CO2-e per kWh. The same hotel in Tasmania? 0.20 kg CO2-e per kWh. Nearly four times lower. Your location determines a huge portion of your footprint before you've changed a single light globe.

Scope 1: gas and refrigerants are your blind spots

For office buildings and shopping centres, Scope 1 emissions are usually a small fraction of the total — maybe some emergency generators and a gas-fired boiler for heating. Hotels are different. Scope 1 is a much larger share of total emissions because of two things most hotel operators undercount: natural gas and refrigerant leaks.

Natural gas consumption in hotels is dominated by hot water and kitchen cooking. International benchmarking data shows that across the hotel sector, 48% of gas goes to water heating, 30% to space heating, and 18% to cooking. In a full-service Australian hotel where guests are showering morning and evening, the kitchen runs lunch and dinner service, and the laundry is processing hundreds of kilograms of linen daily, gas consumption can be substantial.

Under the NGA Factors 2025, natural gas has a Scope 1 emission factor of 51.53 kg CO2-e per gigajoule. A 200-room hotel consuming 4,000 GJ of natural gas per year — a reasonable estimate for a full-service property with centralised hot water and commercial kitchens — produces roughly 206 tonnes of CO2-e from gas alone. That's direct Scope 1. And unlike electricity (Scope 2), there's no state-by-state variation. Gas is gas.

Then there are refrigerants. This is the blind spot we see most often.

A full-service hotel might have a central chilled water HVAC system, split systems in individual rooms, walk-in cool rooms, freezer rooms, bar fridges, and ice machines. Each of these contains refrigerant — commonly R-410A, which has a global warming potential of 2,088. That means one kilogram of R-410A leaked into the atmosphere is equivalent to 2.09 tonnes of CO2-e.

How much leaks? The DCCEEW's Cold Hard Facts report estimates 6.9 megatonnes of CO2-e in annual direct refrigerant emissions across Australia. Commercial HVAC leak rates have improved — from around 20% in 2000 to under 5% today — but even 3-4% leakage on a hotel with 200 kg of refrigerant across all its systems adds up fast. That's 6-8 kg of R-410A per year, or roughly 12-17 tonnes of CO2-e. For a mid-size hotel, that could be 5-8% of total Scope 1 and 2 emissions — completely invisible if you're only tracking utility bills.

The tracking problem is practical, not technical. Refrigerant top-ups are recorded on maintenance job cards by HVAC contractors. Those job cards are often handwritten, filed in a plant room binder, and forgotten. Nobody feeds that data into the emissions calculation unless someone specifically asks for it. And under NGER, systems with less than 100 kg of refrigerant are exempt from reporting. But under ASRS, there's no such exemption. If it's material, you disclose it.

We're honest about this — automating refrigerant tracking is harder than automating utility bill extraction. The source data is messier. But ignoring it isn't an option if you want accurate Scope 1 numbers.

The management agreement problem: who actually reports?

Here's where hotels get genuinely more complicated than almost any other building type. In most industries, one company owns the asset, operates it, and reports the emissions. Hotels break that model.

A typical arrangement involves three parties. The property owner (often a REIT, private equity fund, or family trust) owns the physical building. The operator (Accor, IHG, Marriott, EVT) manages the day-to-day operations under a hotel management agreement. The brand (Novotel, Crowne Plaza, Sofitel) is licensed by the operator and comes with brand standards, sustainability requirements, and reporting obligations.

Under the GHG Protocol's operational control approach — which both NGER and ASRS use in Australia — the entity with operational control reports the Scope 1 and 2 emissions. For managed hotels, that's the operator. They set the operating policies, manage the staff, control the energy procurement, and decide whether to run the pool heater all night. The property owner doesn't touch the day-to-day operations.

But the owner still cares about the emissions. Why? Because ASRS catches the owner too. If Salter Brothers or the Schwartz family (two of Australia's largest hotel owners) meet Group 1 or Group 2 thresholds — and with billions in hotel assets, they likely do — they need to report emissions from assets they own but don't operationally control. Those show up as Scope 3, Category 13 (downstream leased assets) or Category 15 (investments), depending on how the ownership is structured.

And for the brand company — say Marriott International, reporting globally — Australian franchised properties show up as Scope 3 Category 14 (franchises). Marriott reports these emissions in its CDP submission. That means the brand is asking Australian hotel operators for emissions data, which means the operator needs to produce it, which means someone at the property level needs to actually collect the utility bills and run the calculations.

The reporting obligation cascades down the chain. And at the bottom of that chain is usually a hotel general manager who doesn't have a sustainability team, doesn't know what NGA Factors are, and has never heard of an emission factor.

Party	Relationship to Property	What They Report	Reporting Framework
Property owner	Owns the building	Scope 3 (leased/invested assets) under ASRS	AASB S2, potentially NGER
Hotel operator	Manages under HMA	Scope 1 & 2 (operational control)	NGER, ASRS, CDP
Brand franchisor	Licenses the brand	Scope 3 Category 14 (franchises) globally	CDP, SBTi, TCFD

If you're a hotel operator managing 20 properties for six different owners across three states, you've just inherited a carbon accounting problem that multiplies in every direction. Each property has different utility retailers, different metering configurations, different gas connections, and potentially different NABERS assessments running in parallel with your NGER and ASRS obligations.

NABERS as a commercial weapon (not just a compliance exercise)

NABERS for Hotels rates energy and water efficiency on a six-star scale. Three stars is average. Six is market-leading. The average among rated hotels is an impressive 4.3 stars — but remember, those are self-selecting. The hotels that bother getting rated tend to be the ones that already invest in efficiency. The other 98% are a mystery.

Here's why NABERS is about to matter commercially, not just environmentally.

Since 1 July 2024, Australian Government employees must consider environmental performance when booking hotels. The Department of Finance displays NABERS ratings in its accommodation booking tool. Right now it's a "consider" requirement. But a minimum NABERS star rating for government bookings could be in place as early as 2026-27. If your hotel can't show a rating, you might not appear in the government booking system at all.

Government travel is big money. The Australian Public Service employs over 170,000 people. Multiply that by several domestic trips per year — conferences, site visits, inter-agency meetings — and government travel represents a significant slice of the corporate accommodation market, particularly in Canberra, Sydney, Melbourne, and Brisbane.

Corporate travel buyers are moving the same direction. Companies reporting their own Scope 3 emissions under ASRS need to account for business travel (Category 6). Booking employees into a hotel with verified energy credentials makes that calculation easier — and the number lower. We're already hearing from property managers that RFPs from large corporates now ask about NABERS ratings before they ask about room rates. That wasn't happening two years ago.

Getting a NABERS rating takes roughly 2-3 months. You need 12 months of continuous utility data (electricity, gas, water), property information (floor area, room count, occupancy rates), and a site assessment by an accredited NABERS assessor. The data requirements overlap almost entirely with what you need for NGER and ASRS reporting. If you're already collecting utility data for emissions calculations, a NABERS assessment is mostly a matter of packaging the same data differently.

Scope 2: electricity and the state-by-state trap

Hotels consume significant electricity — lighting common areas and guest rooms, running lifts, powering laundry equipment, and driving the chilled water plant that serves the HVAC system. For most hotels, Scope 2 (purchased electricity) is the largest single emissions category.

And in Australia, the emission factor depends entirely on which state your hotel sits in.

Under the NGA Factors 2025, the location-based Scope 2 emission factors for grid-purchased electricity are: NSW 0.64, Victoria 0.78, Queensland 0.67, South Australia 0.22, WA (SWIS) 0.50, Tasmania 0.20 kg CO2-e per kWh. A hotel group operating across multiple states can't use a single emission factor. Each property must use the factor for its specific grid region.

This creates a portfolio reporting challenge. A hotel operator managing 30 properties across five states needs to apply five different emission factors. If you're tracking emissions in a spreadsheet — and many hotel groups still are — this is where errors creep in. We've seen operators apply the national average (0.62) to every property, which overstates emissions for South Australian and Tasmanian properties and understates them in Victoria.

AASB S2 paragraph 29(a)(v) requires location-based Scope 2 reporting as the primary method. You can provide market-based as a supplementary disclosure, which matters if you're purchasing GreenPower or large-scale generation certificates. But location-based is the baseline you can't avoid. Use the wrong factor and your Scope 2 numbers are wrong. Full stop.

For a 200-room hotel in Melbourne consuming 2,500,000 kWh per year, the Scope 2 calculation is: 2,500,000 x 0.78 / 1,000 = 1,950 tonnes CO2-e. The same consumption in Hobart: 2,500,000 x 0.20 / 1,000 = 500 tonnes. Same hotel. Same guests. Same operational profile. Nearly four times the emissions difference, entirely because of where the building sits on the grid.

Scope 3: where global brand programs collide with local reality

Accor committed to SBTi targets — 46% reduction in Scope 1 and 2 by 2030, 28% reduction in Scope 3. IHG and Marriott have similar commitments. These global programs trickle down to Australian properties through brand sustainability programs, mandatory data reporting tools, and eco-certification requirements. Accor aims for 100% eco-certified hotels by the end of 2026, with over 200 Australian and New Zealand properties already certified.

For individual hotel operators, this creates a dual reporting burden. You're reporting upward to the brand (using HCMI methodology, typically per occupied room), and you're reporting to the Australian regulator (using NGA Factors, at the facility level). The methodologies aren't identical. HCMI includes outsourced laundry. NGER might not, depending on operational control. ASRS requires you to think about Scope 3 categories that HCMI doesn't cover — like the embodied carbon of a kitchen renovation, or the emissions from food procurement.

Hotel Scope 3 is genuinely messy. Food and beverage procurement — Category 1 (purchased goods and services) — is significant for any hotel running restaurant and conference catering operations. For food service companies, purchased goods can represent 70% or more of total emissions according to sector-level analysis. We don't have good primary data for most hotel food supply chains, and we're not going to pretend we do. Spend-based estimates are the realistic starting point for most operators.

Guest travel to the hotel (Category 9: downstream transportation) is another thorny one. The brand might claim this in their global Scope 3 inventory. But under ASRS, if you're the operator, you'd only report it if it's material to your entity. For most individual hotel operators, it probably isn't. But for a hotel group with 50 properties? Maybe.

We're still working through how to best handle the HCMI-to-ASRS translation for multi-brand operators. The data overlap is about 70%, but the framing is different enough that you can't just copy one report into the other.

What practical carbon accounting looks like for a hotel group

Forget the frameworks for a moment. Here's what actually needs to happen at the property level.

First, get every utility bill into one place. Electricity, gas, water, waste — across every property, every retailer, every meter. For a 30-property hotel group, you're looking at somewhere between 200 and 500 individual utility accounts. That's 800 to 2,000 bills per year if you're on quarterly billing. Monthly billing pushes it higher.

Most hotel groups collect these bills through a patchwork of retailer portals, emailed PDFs from general managers, and the occasional photo of a bill taken on someone's phone. The data extraction problem is identical to what property managers face — it's a volume problem, not a complexity problem.

Second, track refrigerant top-ups. Get every HVAC maintenance contractor to report refrigerant type and quantity added on every service visit. Build it into the maintenance contract. This is the data point most hotel operators miss entirely, and it's Scope 1 — not protected by the modified liability shield under ASRS.

Third, separate gas and electricity into the right scopes. Gas is Scope 1. Grid electricity is Scope 2. Diesel for backup generators is Scope 1. Solar panels feeding back to the grid reduce your Scope 2 (if you're using market-based methodology). Getting these categories right is fundamental to accurate reporting.

Fourth, apply the correct state-based emission factors. Don't use national averages. Don't use last year's factors. The NGA Factors workbook gets updated annually by DCCEEW, and the state-based grid factors can shift meaningfully year on year. South Australia's factor dropped from 0.23 in 2024-25 to 0.22 in 2025-26 as more renewables came online.

Fifth, build the audit trail from day one. ASRS requires limited assurance from year one, expanding to reasonable assurance from financial years commencing 1 July 2030. That means an auditor will eventually want to trace your reported Scope 2 emissions back to a specific electricity bill, for a specific meter, at a specific property, with a specific emission factor applied. Spreadsheets can't deliver that traceability across a portfolio. We built Carbonly's audit trail specifically because we watched this exact problem destroy reporting credibility at large industrial companies.

The honest bit

We're not going to pretend carbon accounting for hotels is solved. It's not.

The management agreement complexity means that getting clear on reporting boundaries requires legal and accounting input — not just a sustainability consultant. The franchise model means data has to flow in multiple directions simultaneously, and we haven't seen any hotel group that's nailed the workflow for that yet.

Refrigerant tracking remains manual and painful. Scope 3 food procurement data barely exists. And the gap between what NABERS needs and what ASRS needs is small but significant enough to trip up anyone who assumes they're interchangeable.

But the utility bill problem — which represents the bulk of Scope 1 and 2 emissions data — is solvable today. And with government travel policies tightening, corporate buyers asking harder questions, and ASRS pulling large hotel groups into mandatory reporting, the window for doing nothing has closed.

Start with your electricity and gas bills across every property. Get those numbers right, apply the correct NGA emission factors for each state, and build a system that an auditor can actually follow. That's the foundation. Everything else — NABERS ratings, brand reporting, Scope 3 — builds on top of it.

If you operate hotels across multiple Australian states and you're drowning in utility bills from different retailers, Carbonly.ai extracts consumption data from any bill format using AI — no templates, no manual entry. One extraction feeds your NGER, ASRS, and NABERS data needs simultaneously.

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