Environmental, social and governance (ESG) factors have become important to the hospitality sector, as they affect the performance, value and reputation of hotels, as well as the expectations and preferences of guests, employees, investors and regulators. In this report, we provide an overview of the current trends, challenges and opportunities for hotel owners, operators and investors in the Central and Eastern European (CEE) region, with a focus on the commercial case for ESG and the legal framework at the European level.
Publication
01 Sep 2023 ·
Poland
Hotel Investment Scene in CEE – Getting Real About ESG in Hotel Real Estate
3 min read
This report provides you with:
- Investment update: We analyse recent transaction activity, performance recovery and demand drivers in the CEE-6 hotel markets. After a period of declining investment activity, we see good reasons for CEE hotels to regain investors' attention, such as performance recovery, inflation hedging and interest from international capital, to name a few.
- The commercial case for ESG in hospitality: We examine the benefits of implementing ESG best practices in hotels, such as increasing revenue, reducing costs, enhancing brand value, attracting talent and driving innovation. We also showcase some examples of hotels in the CEE region that have achieved high ESG standards and certifications.
- Legal framework at the European level: We outline the main ESG regulations and initiatives that affect the hospitality sector in the EU, such as the Sustainable Finance Disclosure Regulation (SFDR), the EU Taxonomy, the Non-Financial Reporting Directive (NFRD) and its successor the Corporate Sustainability Reporting Directive (CSRD), and the proposed Corporate Sustainability Due Diligence Directive (CSDD). We also provide some practical guidance on how to incorporate ESG clauses into hotel operating agreements.
The main messages from the report are:
- ESG is becoming a key differentiator and value driver for hotels in the CEE region, as it can help them to improve their operational performance, enhance their competitive advantage and access better financing and exit opportunities.
- Hotels in the CEE region have a long way to go to achieve the ambitious ESG targets and comply with the increasing regulatory requirements, but there are also many examples of best practices and innovative solutions that can inspire and guide them on their sustainability journey.
- Hotels in the CEE region need to take on the opportunities and challenges of ESG, taking into account the expectations and needs of all their stakeholders, as well as the specific characteristics and challenges of their markets and assets.
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