Investors of hotels in the Asia Pacific region to focus on sustainability, according to research

More than 70 percent of travellers plan to stay at a sustainable hotel at least once in the next year

As shareholder expectations and lofty net carbon zero targets given by governments affect decision-making, investors in Asia Pacific hotels will increasingly make investments based on sustainability.

According to JLL research, investors and operators would prioritize environmental, social, and governance (ESG) components of hotel investment to assist secure funding for asset purchases or renovations.

Approximately one percent of worldwide carbon emissions come from the hotel industry, according to the United Nations World Tourism Organization (UNWTO). Among all real estate asset types, the industry consumes the most energy and water.

“To meet changing consumer demands, hotel owners and operators in Asia Pacific will be forced to adapt business strategies to include clear ESG factors and goals. Hotel operators are an important sale vector to drive technical standards, especially as they are on the forefront and in direct contact with clients and accounts who are increasingly sensitive to sustainability,” said Xander Nijnens, managing director and head of the hotel advisory and asset management at JLL Hotels & Hospitality Group in the Asia Pacific.

More: Why sustainability should no longer be an afterthought in design

The Asia Pacific region’s (APAC) accommodation sector earned USD186 billion in revenue in 2019, representing a 4.7 percent CAGR since 2008, predicted Skift Research. In 2020, it estimated that the APAC hotel sector would experience a 50 percent YoY revenue decrease to USD94 billion as a result of the pandemic. The sector expanded 26 percent to USD118 billion in sales in 2021. It estimates it to rise another 38 percent to USD163 billion in 2022, which is 12 percent less than in 2019.

Additionally, the pandemic has led to a change in consumer expectations and elevated ESG awareness. According to Booking.com, more than 70 percent of travellers plan to stay at a sustainable hotel at least once in the next year.

Furthermore, compared to global averages, consumers in the Asia Pacific show an even stronger interest in sustainability while travelling, according to Expedia Group’s Sustainable Travel Study.

The Property Report editors wrote this article. For more information, email: [email protected].