Esg Practices as an Instrument for Ensuring Balanced Development of Hospitality Industry Enterprises
Year: 2026
Type: article
Abstract: The hospitality industry faces increasing pressure to adopt ESG (Environmental, Social, Governance) practices as a strategic tool for ensuring balanced and sustainable development. Despite the growing relevance of ESG frameworks, existing research predominantly focuses on aggregate ESG scores, overlooking the proportional distribution of efforts across the three ESG pillars. This structural imbalance – characterised by an excessive emphasis on environmental disclosures at the expense of social and governance dimensions – represents a critical gap that this study addresses.This article investigates the role of ESG balance as a strategic determinant of financial and operational performance in the hospitality industry. To measure the degree of balance among the three ESG pillars, the study introduces the ESG Balance Index (EBI), a novel analytical instrument grounded in the normalised Euclidean distance from the centroid of the ESG disclosure simplex. The EBI ranges from 0 (maximum imbalance) to 1 (perfect balance), enabling quantitative assessment of ESG reporting proportionality.The empirical analysis draws on content analysis of sustainability reports published by 60 international hotel companies from Europe, North America, and the Asia-Pacific region for the period 2019–2023, yielding 300 firm-year observations. ESG disclosures were coded in accordance with the European Sustainability Reporting Standards (ESRS). Financial performance was evaluated through Return on Assets (ROA) and Revenue per Available Room (RevPAR), while operational performance was assessed using staff turnover and guest satisfaction indicators. Panel regression with firm fixed effects was applied to test four research hypotheses.The study concludes that ESG balance constitutes a strategic capability that enhances stakeholder trust, organisational resilience, and long-term competitiveness, and provides evidence-based recommendations for managers, investors, and policymakers.
Institution: Lutsk National Technical University
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $500
OpenAlex ID: W7204789321