Who will lead the charge on hotel sustainability in uncertain times?

On 13 May 2025, the Energy & Environment Alliance (EEA) and Withers LLP, held a high-level roundtable hosted by the Red Carnation Hotel Group, bringing together hotel owners, operators, lenders, and brokers for a frank and timely discussion on the future of sustainability in the hospitality sector. The event featured a keynote address by David Aikman, professor at King’s College London and former Bank of England economist, who set the stage with a thoughtful examination of sustainability amid today’s economic headwinds.

The central question: who will lead the sustainability transition in a time of uncertainty?

A shared desire to act – but hesitation persists

A clear consensus emerged: sustainability is non-negotiable for the future of hospitality. Yet, despite broad support for sustainability goals, participants highlighted a familiar barrier – a reluctance to be the ‘first mover’. Without regulatory compulsion or uniform industry benchmarks, sustainability efforts are too often evaluated solely by their short-term return on investment.

Capital expenditure-intensive upgrades – especially those with long payback periods – remain difficult to justify in the current economic climate, particularly in the wake of the April 2 ‘Liberation Day’ announcements, which have left markets unsettled. While stakeholders are willing to act, they need confidence that sustainability is a shared mandate, not a competitive disadvantage.

Rising standards, limited incentives

Even as regulatory frameworks such as the Energy Performance Buildings Directive and Minimum Energy Efficiency Standards gain traction, many developers – especially smaller or regionally focused ones – find themselves constrained. The cost and complexity of compliance, combined with modest incentives (sustainability-linked finance typically offers just 5–15 basis points in savings), continue to slow adoption.

Perhaps the most promising force of all? Private capital. Long-hold investors and family offices – less encumbered by short-term return expectations – are well-positioned to lead the transition. Values-driven and patient, these capital providers can move first, proving that sustainability is not just an ethical imperative, but a pathway to resilience, enhanced reputation, and long-term profitability.

The way forward: aligned incentives and visible leadership

The sector is not short on interest or ambition. What it lacks is a common framework, visible leadership, and aligned incentives to move together.

One promising area of focus is capex-light sustainability measures – those that require little or no upfront investment but offer significant operating cost reductions, sometimes up to 20%. In a world of rising tariffs and supply chain volatility, the desire to ‘do more with less’ is likely to grow. These initiatives may offer a much-needed win-win: financial upside with measurable environmental impact.

As the conversation continues, the EEA and Withers remains committed to bridging the gap between sustainability ambition and real-world implementation. By fostering dialogue with standard setting institutions including the International Financial Reporting Standards, the Carbon Risk Real Estate Monitor and BREEAM, shaping global benchmarks, and aligning interests, we aim to catalyse collective action – so that when the sector moves, it moves together.