In the hospitality industry, sustainability has moved from marketing rhetoric to operational reality. As climate change accelerates and biodiversity loss intensifies, incremental sustainability alone is increasingly viewed as insufficient, giving rise to the emerging concept of regenerative hospitality. Regeneration goes beyond minimizing environmental impacts by restoring ecosystems and strengthening communities. With rising environmental, social, and governance scrutiny and growing climate and social pressures, regeneration has become both an ethical imperative and a strategic advantage.
Reframing the Hotel Management Agreement
The standard hotel management agreement is not designed to deliver transformative sustainability outcomes. Environmental commitments may be addressed in brand standards or corporate policies, but rarely are they embedded as enforceable contractual obligations with clear performance consequences. This creates a structural limitation: sustainability remains peripheral rather than central to governance.
To unlock regenerative potential, HMAs should evolve into strategic governance instruments. Rather than functioning solely as operational contracts, they can serve as governance frameworks that integrate ecological and social objectives into a hotel's core performance architecture. By redefining success metrics and aligning incentives, the HMA can become a lever for systemic change rather than business as usual.
Embedding Regenerative Metrics into the HMA
The first step is to introduce regenerative key performance indicators. Unlike conventional sustainability metrics, regenerative KPIs measure positive contributions such as biodiversity restoration, water health, local employment, and cultural preservation. These KPIs require measurable baselines, independent verification, and reporting comparable to financial metrics.
A regenerative hotel may restore wetlands instead of simply reducing water consumption, or fund cultural programming rather than merely minimizing cultural disruption. By embedding these ambitions within the HMA, regeneration becomes contractual rather than aspirational.
Cost allocation is critical. Owner-funded capital projects could remain subject to the annual budgets and approval, while operators assume agreed operational and reporting responsibilities. Phased targets and expenditure thresholds could manage conflicts with short-term net operating income. To maintain a balanced risk allocation, targets should be measurable and achievable, with operators accountable only for outcomes within their control.
The Business Case for Regeneration
Regeneration is not antithetical to profitability; rather, it supports long-term value creation. Ecological restoration enhances destination appeal, protects natural capital, and mitigates climate risks. Strong community relationships improve labor stability, while cultural preservation supports premium market positioning. These outcomes enhance brand differentiation and reinforce long-term competitiveness.
Market demand is accelerating this transition. According to the Booking.com Sustainable Travel Report 2023, more than 75% of global travelers report an interest in traveling sustainably. Allied Market Research, meanwhile, reported that the global sustainable tourism market exceeded USD 3 trillion in 2022 and is projected to grow substantially over the next decade, making regeneration an increasingly attractive commercial strategy rather than simply a corporate responsibility initiative.
Incentivizing Regenerative Outcomes
Contractual obligations require aligned financial incentives. Management fees could be linked to verified regenerative KPIs such as biodiversity gains or community impact. Operators could earn enhanced incentives for exceeding agreed targets, while being protected where performance depends on owner-approved capital expenditure. This aligns financial rewards with regeneration without transferring uncontrolled costs or risks between the parties.
Strong ESG performance has been associated with improved financial returns, while assets with leading sustainability credentials may command a valuation “green premium.” More than half of corporate travel buyers now factor sustainability into supplier selection (GBTA Foundation, The State of Climate Action in the Business Travel Industry – 2023). In this context, regenerative positioning strengthens pricing power, supports average daily rate (ADR) resilience, and enhances risk-adjusted returns, increasing a hotel's appeal to investors and guests.
Regenerative Hospitality in Practice: Nayara Resorts
Nayara Resorts’ portfolio demonstrates regenerative hospitality across diverse environments. In Chile, Nayara Alto Atacama invested in large-scale solar installations and battery storage systems to replace diesel generation, while Nayara Hangaroa introduced green roofs and solar panels. In Panama, Nayara Bocas del Toro uses solar power, rainwater harvesting, coral restoration and mangrove rehabilitation, while offering locally immersive guest experiences.
In Costa Rica, Nayara’s carbon-neutral and Green Globe-certified resorts, namely Nayara Gardens, Nayara Springs and Nayara Tented Camp, have restored 60+ acres of rainforest, established wildlife corridors and created a sloth sanctuary through the planting of more than 1,000 cecropia trees. Additionally, Nayara has prioritized local hiring and introduced an employee housing initiative supporting long-term homeownership to address tourism-driven housing pressures.
Nayara Resorts’ initiatives demonstrate how regenerative hospitality strengthens ecosystems and communities, illustrating the types of ecological and social outcomes which could be incorporated into next-generation HMAs.
The transition from sustainability to regeneration marks a pivotal evolution in hospitality strategy. By embedding regenerative metrics, governance mechanisms and incentives into HMAs, owners and operators can transform HMAs from narrow operational contracts into engines of ecological and social renewal. In doing so, regenerative hospitality creates more resilient assets and long-term value for owners, operators, investors and guests alike.
Chiara Epifani is an attorney with TA PLLC and a member of the firm’s hospitality practice. She may be reached at cepifani@tapllc.com.