METRO MANILA’S hospitality sector is increasingly integrating environmental, social, and governance (ESG) initiatives into business strategies, with industry executives saying such investments can enhance profitability and asset values because the market prepares for the addition of about 4,000 hotel rooms by yearend.
Samantha de Mello, director of ESG for Asia Pacific at Hyatt Hotels Corp., said sustainability reporting has evolved beyond financial disclosures to incorporate environmental and social impacts across a company’s operations.
“It’s not only a financial report that should be submitted to your monetary authority. But now it is advisable to speak about the way you’re supporting the environmental impact, the way you produce environmental impact, the way you support local communities, the way you support local economies as well,” Ms. De Mello said during a panel discussion on the Philippine Hospitality for Sustainable Tourism Summit on Thursday.
Kash Salvador, director of development at Accor Philippines, said ESG is evolving from a “cost center” right into a profitability driver.
He cited the “green premium” related to certified buildings, which might strengthen a property’s market positioning and potentially increase transaction values over an asset’s life cycle.
He added that sustainability requirements are increasingly being incorporated into brand standards for brand new hotel developments.
Beyond asset valuation, ESG initiatives can even reduce operating costs through lower utility consumption.
Christine Angela Sevilla, senior director of development for Southeast Asia Pacific at Radisson Hotel Group, cited Lime Resort in Bohol, where solar panels supply roughly 40% of the property’s electricity requirements.
“For owners to give you the option to be engaged, right, on this discussion, it’s really more of having the ability to express what has been done. And that’s why, for us, we’ve been really transparent by way of what now we have been doing regionally in addition to globally.”
Ms. De Mello said ESG investments also function a type of asset protection by helping owners and operators manage environmental and regulatory risks.
The industry’s growing deal with ESG comes as Metro Manila’s hotel market continues to expand.
Jones Lang LaSalle (JLL) said the capital is predicted so as to add about 4,000 hotel rooms by yearend, contributing to a pipeline of about 6,500 recent hotel rooms through 2030. The pipeline includes the 304-room expansion of The Ascott Ltd.’s Somerset Valero Makati and Keyland Corp.’s Alino Hotel.
JLL also reported that foreign tourist arrivals rose 10.4% 12 months on 12 months to 1.83 million in the primary quarter, driven by visitors from South Korea, america, and Japan. — Juliana Chloe A. Gonzales