“Check-Out Time: Why Sustainability in Hospitality Spells an Existential Crisis?

Is “Green Hospitality sufficiently navigating the Existential Crossroads of Sustainability, or is the future of hospitality adequately Sustainable, Responsible and Profitable? These are current questions occupying the minds of the senior leadership.

As the world grapples with the consequences of climate change, industries are under increasing pressure to integrate sustainability into their core strategies, driven by regulatory mandates and the need to safeguard reputation and brand integrity.

The hospitality industry, integral to economic vitality and cultural enrichment, now faces the imperative to mitigate its environmental impact. Driven by rising global demand and expansion ambitions, governments are tightening regulations to address the sector’s environmental footprint. This imperative isn’t just about compliance; it’s also a strategic necessity for businesses to thrive in a changing market.

For hotel chains and the hospitality business stakeholders, embracing sustainability is not only a moral imperative but also a strategic necessity for the success and resilience of the business in an increasingly resource-constrained world. In this pivotal moment, the industry’s response will shape its future trajectory and its broader impact on the planet.

This article explores the urgent need for global hotel chains to embrace sustainability across their value chains and also looks at key recommendations that aid this transformation to a more responsible business.

The state of the industry – Balancing growth and responsibility

The global hotel and resort industry market is expected to generate a revenue of US$446.50 billion in 2024. It represents a compound annual growth rate (CAGR) of 3.32% from 2024 to 2028. It is projected to continue its positive momentum into 2024, building on the recovery that began in earnest in 2023.

According to JLL’s Hotels & Hospitality Group, the industry demonstrated remarkable resilience with revenue per available room (RevPAR) fully recovering and even surpassing 2019 levels by 12%. This recovery is attributed towards increasing disposable incomes, growing urbanization, and expanding global business travel. The industry’s growth has also been marred by its significant environmental and societal footprint.

The industry’s reliance on carbon-heavy construction, energy-dense operations, and fossil fuels has cast a shadow over its environmental credentials. Only 21% of hotels use on-site renewable energy highlighting a massive sustainability gap. Furthermore, the hosting of large-scale events and the impact on local ecosystems and indigenous communities add to the industry’s environmental challenges. It is reliant on natural resources and confronts the urgent challenge of unsustainable and conspicuous consumption some. According to the International Renewable Energy Agency (IRENA), the share of renewable energy in the global hotel industry is expected to reach 25% by end of 2023.

The business imperative of adoption of sustainability leading to mitigation and achieving Net Zero targets

  • Cost Optimization: By implementing best ESG practices, hotels can reduce costs across their value chains. Sustainable technologies and resources in design, operations, and management processes lead to significant savings and add to long-term value to the related enterprise.
  • Risk Mitigation: The industry’s vast supply chains are vulnerable to climate-induced events and regulatory shifts. Proactive ESG strategies safeguard revenues and fortify brand reputation, aligning with evolving investor expectations and policy landscapes.
  • Investment Opportunities: Compliance with sustainability norms opens doors to government incentives and investor interest. Benefits span tax incentives for eco-friendly construction to grants and insurance premium reductions, fortifying financial viability.
  • Expanding Consumer Market and Gaining a Competitive Advantage: The changing consumer behavior and increasing environmental consciousness create an opportunity for the industry to tap into the emerging market of eco-conscious tourists.

The Role of Eco-Tourism in Hospitality: Eco-tourism plays a pivotal role in the promotion and thriving of the hospitality industry. With changing consumer behavior and a growing willingness to protect the environment, global hotel chains have an opportunity to tap into the emerging market of eco-conscious tourists. Hotels can enhance the guest experience by integrating natural elements and obtaining green certifications. The global eco-tourism market has reached US$ 172.4 billion indicating strong willingness of the adoption of sustainable travel incentives by the consumers. Sustainability is becoming a crucial aspect of customer expectations. Failing to align with eco-conscious values risks alienating a significant demographic and jeopardizing profitability.

The blueprint to a greener future

To combat the vast variety of exposures and different hierarchical structures, global hotel chains launch comprehensive programmes and ESG frameworks in order to prioritize the main issues in their value chains and analyze strategic position, choices and actions. It is important to have holistic factors into consideration around the hospitality value chain such as design, operations, external engagement, investment and carbon offsetting opportunities.

The ESG strategy planning framework highlights the 3-stage pathway as broad- ranging recommendations that provide structure and aid decision making for a variety of industry players for each of the three stages. This is also supplemented by an overarching management map that highlights the crucial role of leadership in navigating execution around systematic ESG integration.

In the creation of the above recommendations, the ESG strategy planning framework attempts to navigate a coherent pathway and provide knowledge assets to structure an ESG strategy that significantly improves internal capacity and organizational culture. It further aims to include important climate metrics in environmental considerations and make decisions according to science-based targets. Lastly, it strives to create systemic changes that allow standardization and monitoring of impact creation for a more sustainable future.

As the hospitality industry evolves, a commitment to sustainability is no longer optional but an imperative for long-term success and profitability. Embracing responsibility today ensures a brighter and more environmentally conscious future for global hotel chains.


Tushar Narula, an experienced sustainability advisor and climate change expert, seamlessly merges ESG principles with high-value investments. Through extensive collaboration and research with industry leaders, he fosters positive policy and decision-making to advance net zero goals. Discover more about his background and early contributions at www.tusharnarula.in


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