A thought piece from CEO, Glenn Mandziuk
Sustainability has been one of the hot topics at the Future Hospitality Summit, which has taken place in Abu Dhabi from 25th – 27th September. With the hospitality industry experiencing a significant increase in interest in sustainability from investors and customers, what are the sector’s trends, challenges and opportunities when it comes to investing in ESG?
Sustainability is becoming increasingly high on the agenda for investors, travellers and hotel guests. The trend has been further amplified by the COVID-19 pandemic, with 80 per cent of guests stating that travelling more sustainably is essential, according to research by Booking.com. Meanwhile, a report by Ernst & Young shows that staggering a 74% of institutional investors say that they are likely to avoid companies with poor sustainability performance.
This ever-growing interest in sustainability poses challenges – and opportunities – for the hospitality sector. One critical challenge is the need for a global standard to identify high-quality and resilient sustainability initiatives worthy of investment – and data plays a vital role in addressing this need. With regional and national variations in available green financing options, each with its own requirements and processes, it’s difficult for the industry to determine the best choice. Therefore, there is a pressing need for clear channels of information and knowledge-sharing within the sector.
Another challenge stems from the wide variety of ownership structures within hotel companies. This complexity makes it unclear who should finance or source finance for different sustainability solutions. Should it be the owner of the building or the hotel brand operating within it? Funding may also be a problem, as money may only be available for large-scale investments. With many owners having only one or two properties, accessing funds to plough into sustainability initiatives is not always easy.
However, amidst these challenges, the hospitality sector has several exciting opportunities to get ahead with their sustainability polices, practises and initiatives. More funding is being allocated to sustainability efforts within the industry, providing a massive opportunity to finance the transition to Net Positive Hospitality. To fully harness this investment, greater transparency and information regarding available funding and opportunities for different players within the sector are required. Recognising this, the Sustainable Hospitality Alliance has identified this as a core strategic area for the coming years and is fully committed to supporting its partners and members on their ESG journey.
One central theme that all players within the hospitality sector must embrace is the need to work collectively to turn the vision for Net Positive Hospitality into a reality. By working together, the industry can give back more to destinations than it takes and ensure the preservation of our planet for future generations. Collaboration, knowledge-sharing, and collective action is essential to achieving this goal.
Real-world examples from the hospitality industry demonstrate the sector’s commitment to sustainability and its efforts to become net positive. Several major hotel brands have implemented comprehensive sustainability strategies encompassing energy and water conservation, waste reduction, and community engagement. These strategies align with global sustainability goals and contribute to these brands’ long-term success and reputation.
To summarise, the Middle East’s hospitality industry is witnessing a rising interest in sustainability among stakeholders. This means challenges – but also opportunities – for the sector. The key to sustainability success is to work together to embrace the concept of Net Positive Hospitality and pave the way to creating a better future for destinations and our planet through collaboration, transparency, and knowledge-sharing.
To find out more about how hotels can accelerate their journey to Net Positive Hospitality, visit https://sustainablehospitalityalliance.org/our-work/pathway/.