Sustainability and digitalization have become the key competitiveness factors in the hospitality industry. Both hotels and restaurants need to integrate these two dimensions in order to improve their operational efficiency, reduce costs, and respond to the growing demand from customers, investors, and regulators. According to the European Commission (2022) , the adoption of digital technologies and sustainable practices is essential for small and medium-sized enterprises (SMEs) in the sector to achieve the operational resilience and competitiveness required in the new global market.
The implementation of ESG in the hospitality industry enables organizations to measure and manage their environmental impact. Nowadays, reducing the carbon footprint is a data-driven process based on monitoring energy and water consumption and waste generation. Hotel software is no longer limited to reservation management, as it now includes specific modules to monitor indicators in real time, transforming data into strategic decisions. This shift towards greener practices strengthens brand image and attracts tourists who prioritize establishments with European sustainability certifications. According to the Booking.com (2025) more than 50% of travellers are aware of the impact of travel on communities and the environment, and more than 90% want to make more sustainable travel decisions and, to some extent, have already done so.
On the other hand, digitalization acts as the engine that makes sustainability feasible. Through operational automation with integrated systems (PMS, RMS, or POS) that automate bookings, payments, inventory, and administrative tasks, it is possible to reduce errors and optimize time. This automation is highly valuable for SMEs or establishments with very limited resources. In addition, digital tools such as mobile check-in, personalized apps, and AI chatbots make it possible to offer faster and more personalized services, increasing customer satisfaction and loyalty. Likewise, the integration of IoT, advanced analytics, and AI into software allows real-time monitoring and adjustment of energy use and climate control, directly linking digitalization with sustainability Skift & Oracle Hospitality (2025).
SMEs have a strong opportunity for differentiation through digitalization and sustainability. Through their transformation, they can enhance the resilience of their business (European Commission, 2022):
- Automation without major infrastructure: due to the Software as a Service (SaaS) model, SMEs can access advanced management tools (PMS and POS systems) with minimal initial investment. This enables a small restaurant or hotel to automate its operational processes, reducing the time devoted to administrative tasks and eliminating manual errors that could generate additional costs.
- Competitiveness in the global market: digitalisation allows SMEs to be present on the same booking platforms as large hotel chains, but it is their ESG strategy that truly sets them apart. By obtaining certifications for sustainable practices, SMEs attract travellers who are not only more environmentally conscious but also have higher spending capacity, as they seek businesses with stronger environmental responsibility.
- Radical resource optimisation: IoT technology and data analytics enable establishments with tight margins to control their variable costs. Monitoring energy consumption of food waste in real time allows for immediate adjustments, turning uncontrolled expenses into savings.
- Preferential access to funding and grants: European aid programs currently make it easier for companies to adopt new technologies and become more sustainable.
- Attraction and retention of talent: companies that demonstrate ethical governance and provide modern digital tools for work are more appealing to qualified professionals.
REFERENCES
Booking.com. (2025). Travel & Sustainability Report 2025.
European Commission. (2022). Transition Pathway for Tourism.
Skift, & Oracle Hospitality. (2025). Hospitality in 2025: Automated Intelligent... and more personal.