ESG is now a proven driver of value creation, say hotel brand leaders, and AI promises to usher in a new wave of environmental and operational efficiencies.
“At the moment, we are embedding ESG into everything we do,” said Natalia Kolotneva, head of living and hospitality, Europe, LaSalle Investment Management. “We don’t even think of it as a standalone term. Sustainability is now part of everything: underwriting, asset management, future proofing, resilience of the assets. Fundamentally it’s adding value.”
LaSalle has the turnover lease of a Barcelona Hotel, she said, and recently invested 30 percent of the necessary capex, along with obtaining local grants, to replace the 1970s façade and gas boilers with high-performing alternatives.
“I got the data this morning and we’ve saved 30 percent on energy,” said Kolotneva. “Ultimately, it’s about having a happy tenant, operational resilience, and happy cashflow.”
Real world ROI
In 2025, Radisson Hotel Group announced that two of its hotels, in Oslo and Manchester, had achieved independently verified net zero status, running entirely on electricity generated from renewable sources.
Among several policies, the hotels offer glass water bottles instead of plastic and serve specially designed low carbon cuisine that focuses on fresh seasonal ingredients.
Elie Younes, global chief development officer, Radisson Hotel Group, explained that the extra investment for the ecological renovations amounted to €5m with an expected ROI of 7 to 10 percent. As it transpired, the two hotels outperformed RevPAR expectations by 15 to 18 percent. Radisson’s subsequent research found that consumers were willing to pay more and stay in the hotels specifically because of their net zero status.
The UK-based Energy & Environment Alliance published a 2025 report “How Important is ESG in Hospitality Investment Decisions?” based on interviews with investors overseeing €360b in hotel assets. Kolotneva, who participated in the report, said that strong ESG performance can typically lead to an 8–15 per cent uplift in hotel asset value at exit.
Cap rate compression
Camil Yazbeck, global chief development officer, premium, midscale & economy at Accor said the French global hotel giant has been successful at persuading hotel owners across the world that hotel real estate with strong ESG credentials can compress cap rates by 100 to 200 bps, making a positive impact on valuations.
“We've been able to persuade a lot of owners that [ESG] is a good investment, not only because of the data, but, more importantly, because we have created a toolbox of quick wins, medium-term wins and long-term wins,” he said.
Last year was one of Accor’s best years ever for new signings and openings, said Yazbeck: “We signed one hotel a day and we opened a new hotel every two days. Nine out of ten are franchises and 60 percent are existing Accor owners.”
For the major hotel brands, franchising is increasingly seen as a faster and lower risk route to scale, while for small and medium-sized owners, it offers brand power (loyalty, distribution, etc.) without giving up control.
Green conversions
Converting an existing hotel is almost always far more eco-friendly than building a new one, and Yazbeck said that 60 per cent of Accor’s new openings are conversions.
Treasure Island in Las Vegas is one of the most striking of these new conversions. With 2,884 keys, it is Accor’s largest ever property. Originally opened by Steve Wyn in 1993, this vast structure is now owned by businessman and casino owner Phil Ruffin who bought the hotel from MGM Resorts International for $775m in 2009. Prior to the Accor partnership, the hotel traded as a Radisson.
The renovation of Treasure Island has earned the hotel a Four Green Globes certification by the Green Building Initiative, which reflects meaningful improvements in energy and water efficiency, air quality, and resource management, says Accor.
The ESG talent magnet
In addition to the impact on profitability and exit values, ESG has a positive effect on attracting new generations of hospitality workers, managers, and leaders.
Dimitris Manikis, president, Wyndham Hotels & Resorts EMEA, said: “My daughter, 26, is starting a new job with Marriott and she told me she is really impressed with their ESG strategy and what they are doing for the planet.”
Hotel brand leaders are looking forward to AI driving further environmental and operational efficiencies for their businesses.
Manikis said: “AI will be great because it will help us with food waste, energy waste, water waste and so forth.”
Rather than being a disruptor, AI will be an enabler if businesses make the right choices about how they integrate it and leverage it within their operations, said Younes.
With inflationary impact on the P&L set to continue, he said AI will deliver an extra advantage in controlling costs at the hotel level.
All quotes taken from the panel ‘Question time: shaping the future of hospitality, redefining returns, reimagining value,’ at IHIF EMEA 2026.