ESG in Hospitality: Shaping Consumer and Corporate Strategies

What is ESG?

ESG stands for environmental, social, and (corporate) governance. It is a set of practices and metrics used to evaluate a company beyond its financial performance.

In other words, ESG practices and metrics offer a way to measure a company’s health and stability beyond what may be deduced from the numbers on its balance sheet.

Management consultancy PACE Dimensions, in collaboration with market researcher BVA BDRC, has unveiled a comprehensive report shedding light on evolving consumer and corporate perspectives towards ESG (Environmental, Social, and Governance) initiatives. The findings underscore significant shifts in consumer expectations and corporate practices across various sectors, including hospitality.

Key highlights from the report include:

• A substantial 59% of respondents emphasize the role of large companies in enhancing environmental sustainability and community support, while 58% advocate for governmental intervention in ensuring fair wages and equal opportunities.
• The demand for sustainable hotels is robust, with 38% of the global market actively seeking accommodations that prioritize environmental responsibility.
• Generational differences are apparent, with younger demographics, such as Gen Y, vocalizing strong preferences for sustainable practices in their accommodation choices, contrasting with older generations who demonstrate more action-oriented behavior.
• Decision-making in hospitality is heavily influenced by price considerations, followed closely by cancellation policies, and increasingly, sustainability accreditations.
• ESG compliance is emerging as a critical factor in corporate procurement processes, shaping Requests for Proposals (RFPs) and vendor selection criteria.
• Many businesses are seeking streamlined solutions, such as OTA accreditations, due to resource constraints in implementing comprehensive ESG strategies.

Tim Davis, managing director of PACE Dimensions, commented on the significance of the report’s findings: “This data underscores the imperative for businesses to integrate robust ESG strategies into their core operations. It’s not merely a trend but a pivotal factor influencing business performance and resilience. Organizations that fail to prioritize ESG risk losing competitive advantage and facing challenges with asset valuation in the evolving marketplace.”

The report aims to empower businesses across industries with actionable insights to navigate the complex landscape of ESG expectations, ensuring alignment with stakeholder values while driving sustainable growth and innovation.