Having entered Vietnam’s hospitality market in August, Radisson RED Danang has outlined long-term plans to reduce and manage its water and electricity consumption, waste, and carbon emissions. These metrics are calculated using international science-based tools and submitted for regular monthly and annual reviews. This aligns with Radisson RED’s commitment, made by the Radisson Hotel Group, to the WTTC Sustainability Basics program, aiming for science-based accountability and achieving net-zero by 2050.

Ms. Nicole Weitsz, General Manager of Radisson RED Danang, emphasized that operating an energy-efficient hotel is crucial for achieving meaningful environmental outcomes. “We capitalize on the benefits of being a new hotel by applying sustainable practices right from the start,” she said. “Through careful planning, we are setting new standards in energy efficiency, demonstrating that reducing energy needs enhances guest comfort and underscores the hotel’s commitment to sustainable development.”

Focus on sustainability

In Vietnam, amid the growing emphasis on green growth and sustainable development across all sectors, the hospitality industry has been moving further towards sustainability and eco-friendliness. Alongside Radisson RED Danang, other hotels and resorts are now focusing on environmental preservation, renewable energy use, plastic waste reduction, and protecting local ecosystems.

In November, One Destination announced a partnership with Singapore’s Terne Holdings and the BTS Bernina Private Equity Fund to develop Vietnam’s first environmental, social, and governance (ESG)-standard real estate project, in the central highlands’ resort town of Da Lat. On 5 ha, Haus Da Lat will feature luxury apartments, a commercial center, and a 5-star hotel operated by an international brand. The project aims to blend sustainable design with Da Lat’s natural beauty, positioning the city as a leader in global ESG real estate.

The 13 SOJO Hotels from the ROX Group in Vietnam, meanwhile, are being operated on a smart platform, reducing energy use by about 15 per cent and emissions by 10 per cent compared to similar-sized hotels. Over four years of operations and with the target of developing green hotels, the brand has boldly invested in control systems and processes aligned with the goal of pursuing sustainable development and environmental protection.

According to Mr. Matthew Powell, Director of Savills Hanoi, the hospitality industry is taking sustainability seriously for several reasons. “Consumers are demanding sustainable services and products, so hotels and hospitality developers are prioritizing sustainability factors,” he said. “There are also policies and regulations ensuring that both new and existing properties meet specific standards.”

Savills’ research highlights that shareholders and owners of hotels are increasingly driven by net-zero targets for 2030 and 2050, demanding green certification for new builds. This sustainability focus extends from construction and design to the choice of materials.

Additionally, ESG principles require commitments to local communities when developing projects. “It is necessary to ensure the use of local employees, suppliers, building materials, and contractors,” Mr. Powell explained. “This minimizes the environmental impact while supporting the local economy through power consumption and waste reduction.”

Local authorities also have policies to attract “green” projects. These initiatives benefit the local economy through investments in materials, labor, and skills development, including language training.

Academics from RMIT University Vietnam conducted research that found that greening the hospitality sector is not only a strategic business decision but also imperative to mitigate the impacts of climate change and flooding for future generations. Regulatory requirements demand greener practices, and the hospitality sector is seen as a key player in driving positive environmental change.

Aside from policies, consumers, particularly in the luxury sector, are also driving demand for sustainable practices. Guests seek local design, labor, and materials, ensuring that their stay has minimal or even positive environmental impacts.

Furthermore, the RMIT research noted that the hospitality industry is a unique business model in which both tourists and the employees of the property share a common space and experience. Once a green experience is formed in the property, it turns out that it positively affects both the guests and the employees’ experience, hence improving productivity and customer satisfaction. Now more hospitality leaders pay attention to shaping a better green experience, being ahead of the competition, and shaping better brand images for customers and employees.

Seizing opportunities

Sustainability is becoming a trend, but like any large-scale change it comes with a cost, which poses challenges for developers in the hospitality industry. “If we are looking at hard costs in terms of reinvestment in the hotel or operating practices, there can be a slowness to change,” Mr. Powell said. “Additionally, the costs required for such changes, including training, new policies, and identifying new target markets, also create challenges.”

According to Ms. Weitsz, upgrading older buildings or transitioning from traditional business models, where cost often drives decisions against sustainability, requires a commitment from business owners or managers. However, this can indeed lead to higher monthly costs or upfront investments, which are sometimes not feasible or available.

The RMIT research highlighted that green training is a long-term endeavor requiring substantial investment and strong support from senior leadership with a strategic vision. Crucially, green training is not the end but the beginning of shaping greenness, and it must be followed by other green initiatives, including green communications, facilities, and operations.

Overall, Vietnam’s hospitality industry still has many opportunities to advance towards sustainability. “Vietnam has obviously become a very popular tourist destination across various sectors,” Mr. Powell said. “Each target market has different demands, and perhaps varying levels of familiarity with sustainable travel or unique travel experiences.”

Vietnam is committed to sustainable practices, which strongly supports the sustainable development strategies of investors and developers in the hospitality sector. “At this stage, the country is laying the foundations for clear communication across all sectors,” Ms. Weitsz said. “Focus has been placed on education, with citizens playing an important role in these initiatives. Additionally, Vietnam’s rich agricultural heritage offers the potential for sustainable farming practices that protect biodiversity and soil health, strengthen the rural economy, and reduce the environmental impact.”

She also emphasized that success in sustainability practices is multifaceted, there are a lot of partners that need support to realize the intended results. “As a hotel provider, we can follow the principles to reach net-zero by 2050, but we need both service providers and also our guests to be on the same sustainability journey,” she explained.