The Lodging Industry’s Push Toward Sustainability and Smart Financing
The lodging industry continues to navigate the challenge of delivering outstanding guest experiences while adopting more sustainable development practices. At the same time, operators must contend with rising operational costs, heightened market competition, and growing pressure to integrate cutting-edge technologies that improve both energy efficiency and guest satisfaction.
High construction costs and stringent lending requirements often present financial hurdles for new projects and renovations. To overcome these barriers, many developers are turning to Commercial Property Assessed Clean Energy (C-PACE) financing as a strategic funding solution. By offering long-term, low-cost capital for energy-efficient and green building improvements, C-PACE enables developers to achieve sustainability goals while preserving liquidity and enhancing property value.
Reducing the Overall Cost of Capital
Given today’s challenging financing environment, C-PACE has become a game-changing tool for funding energy-efficient and resiliency-focused upgrades. More developers are adopting sophisticated capital strategies, leveraging innovative financing mechanisms like C-PACE to lower their overall cost of capital and bridge funding gaps.
By effectively layering C-PACE alongside traditional debt, equity, and tax credits, developers can optimize their financial structures—supporting both their sustainability initiatives and bottom-line performance. As comfort with these advanced financing strategies grows, larger and more ambitious projects are moving forward, even amid economic uncertainty.
At PACE Equity, over $6.3 billion in energy-efficient commercial developments has helped reduce more than 1.4 million metric tons of carbon emissions. This impact, spanning over 150 projects, signals a pivotal shift in the industry—one where innovative low-carbon financing is reshaping how developers think about sustainability.
Driving Impact Through Data and Behavior Change
Two fundamental strategies are essential for accelerating progress in sustainable development: 1) Leveraging data to demonstrate the measurable benefits of energy-efficient projects, and 2) Encouraging behavioral change by making sustainability financially viable.
Innovative financing solutions, such as CIRRUS Low Carbon financing from PACE Equity, merge C-PACE with low-carbon building verification—a combination that is driving real change across the industry.
The Role of Low-Carbon Engineering in Smart Financing
Developers now recognize that efficiency and resiliency should be prioritized from the design phase. They see the added value of green building certifications, not only in tenant appeal but also in property valuation. Even minor sustainability upgrades can qualify projects for lower financing rates, making it crucial to partner with a financing provider that offers in-house low-carbon engineering expertise.
Case Studies in Sustainable Hotel Development
The Orbit Hotel by Wyndham, originally built in the 1960s as housing for the NASA Glenn Research Center, has been transformed into a 54-unit boutique hotel under the Trademark Collection.
This project used C-PACE funding to recapitalize and finance upgrades in electrical, lighting, HVAC, and plumbing systems—improving overall energy use intensity. Since opening in 2021, the hotel has reduced carbon emissions by 4,800 metric tons annually.
In another unique case, a hospitality retreat center in New Mexico utilized $10.2 million in CIRRUS Low Carbon C-PACE financing, covering 32% of its total capital stack post-construction. This refinancing move allowed the developer to reclaim equity while taking advantage of long-term, fixed-rate, non-recourse capital—all while achieving an annual carbon savings of 600 metric tons.
The Future of C-PACE and Green Lodging
As C-PACE financing continues to evolve, expect more tailored solutions to meet the shifting needs of hotel developers and property owners. The movement toward a more sustainable, energy-efficient lodging industry is no longer just a vision—it’s becoming reality.
