The UK’s hospitality and leisure sector is grappling with multiple challenges as it works to balance financial viability and sustainability.

Rising energy costs, driven in part by the energy crisis, are significantly impacting operational margins for hotels, restaurants, and leisure facilities. Energy-intensive systems such as heating, cooling, lighting, and refrigeration require substantial investment in energy efficiency to remain viable in a highly competitive market.

The growing demand for sustainability within the sector is also being driven by consumers, who are increasingly seeking out eco-conscious businesses. A report from the Carbon Trust found that 70% of consumers are more likely to choose a company with a demonstrable commitment to sustainability.

Businesses in the hospitality sector are under increasing pressure to adopt green practices, reduce waste, and showcase their commitment to environmental goals(1). This includes everything from reducing food waste to switching to energy-efficient appliances and promoting sustainable sourcing practices.

The UK government has funding opportunities that offering support for businesses in adopting sustainable technologies. However, the process for accessing this funding can be complex, and many smaller businesses lack the in-house expertise to navigate the application process(2).

In addition to meeting consumer expectations, the hospitality and leisure sector must also respond to increasing regulatory requirements. For example, businesses are now required to report their energy use under the Streamlined Energy and Carbon Reporting (SECR) framework(3). This increased regulatory scrutiny is prompting businesses to implement energy-efficient solutions and adopt carbon reporting practices in preparation for stricter legislation on sustainability.

Despite the challenges, those in the sector who invest in sustainability are seeing long-term benefits, from reduced operational costs to enhanced brand loyalty. As customers continue to prioritise sustainability in their purchasing decisions, the ability to demonstrate environmental responsibility will become a competitive differentiator for hospitality businesses.

Bibliography

1 Sustainability in the hospitality industry (Accessed May 2025) https://www.deloitte.com/uk/en/Industries/consumer/blogs/sustainability-in-the-hospitality-industry.html

2 Find funding to help your business become greener (Accessed May 2025) https://www.gov.uk/guidance/find-funding-to-help-your-business-become-greener

3 Environmental reporting guidelines: including Streamlined Energy and Carbon Reporting requirements (Accessed May 2025) https://www.gov.uk/government/publications/environmental-reporting-guidelines-including-mandatory-greenhouse-gas-emissions-reporting-guidance