NEW YORK — In a world with increasing environmental threats such as hurricanes and wildfires, the hotel and real estate industries must make changes to their building and design processes.
"We are in an era of rising environmental risk," said Richard Williamson, chief operating officer of Considerate Group, said at a panel at the 2025 NYU International Hospitality Investment Forum. "Designing for resilience has to be better than to prepare and recover."
The panel tackled the key challenges facing the industry, from rising insurance costs, green premiums, financing and more — including whether travelers even care about the resilience efforts hoteliers invest in.
"I think guests want to go where they want their experience. And, unfortunately, that tends to be places where we have the highest climate risk," said Breana Wheeler, director of operations for the U.S. at BREEAM, citing beaches and other nature-focused experiences.
Leisure travelers frequently flock to areas greatly affected by natural disasters, so they themselves are pretty resilient, Wheeler added. On the business transient side, some companies — the large ones looking to report on their lower carbon efforts — will prioritize hotels with green initiatives, so there's a big opportunity for hotels in that way.
'Resilience is a community sport'
BREEAM, a 100-plus-year-old building science research organization, has a specific team focused on social impact, Wheeler said.
"Resilience is a community sport," she said. "When we think about resilience, it's not just about whether or not your asset can perform or withstand an event. It's not just your asset — it's your block, it's your neighbors, it's your community overall. And ultimately, recovery comes from whether or not that whole ecosystem, your whole community, can actually recover from that event as well."
Hotels play a key role in the recovery aspect, since they are usually the places housing first responders or people displaced from their homes, Wheeler said. Hotels and their communities need to have an emergency plan, and that plan should be tested.
"Typically, [plans are] all stress-tested during the event, which is often the time you don't want to find out that you've got a hole in your plan," she said.
Resilience financing and the 'game of hot potato'
Unfortunately, not every investor prioritizes resilience planning. Longer-term investors are more likely to address significant climate risks, Wheeler said.
"The shorter the hold period, the more it's a game of hot potato," she added.
Will Garson, vice president at MCR, said hotel investors are increasing their due diligence and are more cognizant of climate issues during the acquisition process — even paying more to get buildings assessed by specialty firms.
"We've seen a lot more upfront cash spend on these third-party reports," Garson said, adding that the reports provide some peace of mind. "I think it's also just having someone hopefully, or not hopefully, finding something you or I wouldn't be able to see."
New technologies exposing a building's potential climate risks, Wheeler said.
"What we're seeing now is there's much more information about the actual risk to the asset," she said.
Garson said he doesn't know how much more attractive green builds are comparatively, but the math has to make sense for the deal to get done.
"At the end of the day, the lender wants their debt covered and the ability to get out in a certain time period — that's the basis of their financing," Garson said.
Sustainable financing for real estate does appear to be growing in the U.S., Wheeler said.
"Most of the banks understand climate risk. They understand those aspects," she said. "They have been asked to stress-test their loan portfolios against them, and even though there is no regulatory mandate potentially to do that, and we're not seeing that going forward.
"The thing about planning — you can't unsee it once you've seen it," she added, referring to owners and investors discovering a climate risk.
Being proactive is a good business strategy, Wheeler said.
"Right now, there is a real incentive to act before everyone else to get that actual bump that we need," she said. "It's a real business advantage, and that's where we're seeing sustainability really being used in this way. I think it won't always be that way."
'Insurance is a privilege, not a right'
Inevitably, regions affected by climate disasters are seeing hikes in insurance costs and even, in some cases, a lack of insurance options.
"We definitely have already seen the effects of insurance hikes," Garson said, adding that he's had success in layering insurance across his portfolio. "I don't think it'll be inability to insure, it'll just be cuts to the bottom line and will make it a less attractive deal."
But hotel owners and investors can't assume they'll get the policy they want — or even a policy at all.
"I think that's worth noting, too — insurance is a privilege, not a right. It's not a utility," Wheeler said.
The conversation with insurers has evolved to be a little less black and white, she added.
"If you can go to [insurers] and show them the various things that you've done, whether that's to deploy a particular technology in a flood event or something like that, it's a way of having a conversation about managing the cost profile," Wheeler said. "Across the whole range of portfolio, we could actually bring that into a manageable place."
Things do need to change, she added, and more technology and innovation is still needed.
"Insurance is going to have to innovate through this, and it's going to be interesting to see in a changing world how much we trust the product on if its going to actually deliver," Wheeler said.