Sustainability is increasingly moving away from being just a corporate reporting exercise or a moral obligation. And in Asia, hospitality stakeholders say they are confronting both a regulatory and market-driven push, with pressure coming from several directions as they rush to ensure their assets remain viable in the region’s next phase of growth.
Experts at the IHIF Asia 2025 panel titled “Sustainability at the Crossroads: The Growing Pressure on Hotels in Asia Pacific” noted that governments are setting new expectations, younger travellers are demanding authenticity and accountability, global brands are tightening standards, and financiers beginning to link capital terms with ESG performance.
Learning from others
Much of the discussion centred on Vietnam, a market experiencing one of Asia’s fastest tourism recoveries but one still building its regulatory foundation.
For Sylvia Nguyen, vice chairwoman of Alphanam Group, the pressure isn’t simply regulatory. It’s also cultural.
“We’re a very young country, and everything we do feels like a responsibility to the next generation. We don’t have the regulations of Singapore or Japan but because we’re building from scratch, we want to do it right,” she said.
And she notes Vietnam’s rapid adoption curve and a hyper-connected population results in quick change where “the moment someone says plastic straw is bad, suddenly you travel around Vietnam and there are no more plastic straws.”
That responsiveness, combined with strong manufacturing capability, is enabling Vietnam to leapfrog dated sustainability practices, a point that aligns with analyses by international bodies such as IEEFA and the OECD which highlight Vietnam as one of Southeast Asia’s fastest-moving markets on renewables, and a high-growth hotspot for green buildings, with certifications and clean-energy capacity scaling sharply over the past decade.
Government intervention
Real shift is also happening at government level. In September, Vietnam’s private sector submitted 3,000 ESG-related recommendations to policymakers as part of a national forum.
“For the first time, the government is allowing the private sector to build ESG standards that will then be rolled out nationally. It’s not new for the world but it’s new for Vietnam,” Nguyen noted.
The implications for investors are clear: Vietnam’s regulatory environment is tightening, expectations around environmental impact are increasing, and masterplanning decisions are being scrutinised more than ever.
Nguyen emphasised that land allocation is becoming a test of credibility.
“When the government awards 50 to 100 hectares to a reputable group, the expectation is that you protect the villages, protect the land, safeguard the trees and build proper sewage and water systems. Waste of natural resources is a jailable offence.”
All in this together
While Vietnam focuses on building its framework, operators such as Six Senses are pushing beyond traditional sustainability entirely.
For Jael Fischer, head of development - Asia Pacific, sustainability is no longer about maintaining the status quo but rather about regeneration.
Fischer says Six Senses embeds this regenerative approach at the earliest stage of development, noting that one of the first questions to any prospective developer is whether they have completed an EIA or ESIA which are the environmental and social impact assessments required in jurisdictions such as Thailand and Vietnam.
Sometimes, Fischer said, these assessments reveal risks developers overlook. She cited a Moroccan resort where an ESIA uncovered a nearby village with failing sewage infrastructure.
“We were then able to have discussions with the developer around building a bigger sewerage treatment plant that could be useful to that village. That knowledge lets us create regenerative impact beyond our four walls.”
But regeneration is also becoming a source of guest demand exemplified by the ESIA for Six Senses Fiji identifying a critically endangered iguana species living on site.
“If we hadn’t known, their habitat would have been destroyed during the development phase. Instead, we protected it and now the iguanas are our most popular guest activity.”
Integrating local communities into service offerings (such as Indian villagers preparing traditional chai and naan) could also be a differentiator, she stresses.
“It’s about integration with the local people and culture and how you can bring that authentic experience.”
Finding the balance
Experts also highlighted the tension between guest expectations and conservation efforts.
Nguyen noted Vietnam’s rising middle class is increasingly focused on climate issues however the industry must figure out the balance between conservation and guests feeling their privileges are being stripped.
“The challenge is: how do we build sustainability without diminishing the experience?”
Her solution is that operators must integrate sustainability into the entire guest journey from pre-arrival, during the stay and post-stay.
She stressed that the responsibility should not sit only with luxury brands, and that a focus on sustainability and integration with the local community should apply across segments.
Financing
Financing is also beginning to reward ESG performance. Fischer notes the growing availability of preferential financing for projects with strong sustainability credentials.
“Our Six Senses in the Galapagos is funded by the UN Green Climate Fund. The one in Grand Bahama is funded by the Global Coral Reef Fund. There are actual financial benefits now.”
This aligns with wider trends, not just in Asia but globally as well. Across Asia Pacific, sustainability-linked loans have risen markedly in the past several years, with issuance in the region growing strongly as corporates and lenders alike embrace structured finance tied to sustainability outcomes.
The next phase
Despite Six Senses’ progress, Fischer acknowledged that the industry still has blind spots.
One internal gap her team discovered was the lack of guidance for developers on how to engage local communities during construction, a period when trust is most fragile.
“We realized we need to provide a framework during that phase. If the interface is handled well, we spend less time rebuilding trust after opening.”
She also stressed the importance of sharing ideas to effect change on a wider scale.
“Sustainability isn’t a competition. It should be about: I’m doing something great, how can I help you do it too?”
And change is accelerating. Upcoming updates in USALI, the global accounting standard for hotels, will from January 2026 see the replacement of the former Utilities department with a new Energy, Water & Waste schedule, introducing more detailed sustainability tracking and consumption metrics (e.g energy, water and waste per room/usage unit) to better capture environmental performance in hotel financial reporting.
For stakeholders, that means transparency will increase, comparability will improve, and ESG performance will become more financially material.
What’s clear is that across Asia Pacific, from Indonesia’s new carbon-trading framework to Australia’s mandatory climate disclosures, the direction of travel is unmistakable. Regulatory pushes, market expectations and operational realities are coming together, and the opportunity sits in anticipating these pressures rather than just reacting to them.