Author(s)

KONSTANTINA K. AGORAKI, ALEXANDRA ALEXANDROPOULOU, ELENI DIDASKALOU, DIMITRIOS A. GEORGAKELLOS

Abstract

In the highly competitive hotel industry, the integration of environmental, social, and governance (ESG) principles is rapidly evolving from a niche trend to a core element of strategic positioning. ESG initiatives are becoming pivotal in shaping the future of the hospitality sector, enabling businesses not only to contribute positively to the environment and society but also to secure and enhance their market position in a rapidly changing world. ESG initiatives have increasingly become a cornerstone for businesses seeking to secure a long-term competitive advantage in the ever-evolving global market. As consumer preferences shift towards more eco-friendly and socially responsible products and services, companies are recognising the importance of integrating sustainable practices into their operations. Gaining a competitive advantage in the hotel industry through ESG strategies involves a multifaceted approach focusing on sustainability, ethical practices and responsible governance. To this end, several dimensions and initiatives of ESG provide the framework towards this direction. The environmental sustainability pillar incorporates several initiatives, such as energy efficiency, waste reduction, and water conservation. Social responsibility highlights the significant positive externalities that could be achieved, such as community engagement, employee well-being and inclusion. The third pillar of ESG calls for decision-making that considers not only the firm’s profit-maximisation principle but also the interests of various stakeholders. Adopting ESG practices offers the hotel industry a pathway to operate more sustainably and ethically while differentiating themselves in a competitive market. This forward-thinking approach is essential for hotels aiming to thrive in the future travel and tourism landscape, marking a significant step towards a more sustainable future. The present research aims to provide a critical review of the emerging concept of ESG principles as a main mechanism that the hotel industry uses to achieve sustainable competitive advantage and superior managerial performance.

Keywords

competitive advantage, ESG, ESG practices, sustainability, performance, hotel industry