Metro Manila hotel operators tout ESG as driver of asset value, profitability

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 as 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 include environmental and social impacts across an organization’s operations.

“It’s no longer just a financial report that needs to be submitted to your monetary authority. But now you need to talk about how you’re supporting the environmental impact, how you produce environmental impact, how you support local communities, how you support local economies as well,” Ms. De Mello said during a panel discussion at 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” into a profitability driver.

He cited the “green premium” associated with certified buildings, which can 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 new hotel developments.

Beyond asset valuation, ESG initiatives can also 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 approximately 40% of the property’s electricity requirements.

“For owners to be able to be engaged, right, in this discussion, it’s really more of being able to express what has been done. And that’s why, for us, we’ve been really transparent in terms of what we have been doing regionally as well as globally.”

Ms. De Mello said ESG investments also serve as a form of asset protection by helping owners and operators manage environmental and regulatory risks.

The industry’s growing focus on ESG comes as Metro Manila’s hotel market continues to expand.

Jones Lang LaSalle (JLL) said the capital is expected to add about 4,000 hotel rooms by yearend, contributing to a pipeline of about 6,500 new 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% year on year to 1.83 million in the first quarter, driven by visitors from South Korea, the United States, and Japan. — Juliana Chloe A. Gonzales