INSTITUTIONAL TRANSFORMATION FOR SUSTAINABLE DEVELOPMENT OF THE HOSPITALITY INDUSTRY

Abstract

Introduction. Sustainable development has become a key priority in managing the hospitality industry, as this sector significantly impacts environmental, economic, and social dimensions of society. This article explores the current barriers to implementing sustainable practices in the hospitality industry, highlights key issues related to financial, regulatory, educational, and regional aspects, and provides recommendations for improving state regulation and corporate governance. The study identifies major barriers, including the high costs of implementing innovative eco-technologies, insufficient awareness among entrepreneurs and consumers about the benefits of sustainable development, and a lack of effective state incentives to support environmentally and socially responsible enterprises. The inefficiency of the regulatory framework and regional disparities in development further complicate the adoption of sustainable practices. The article presents a series of recommendations aimed at addressing these challenges. Key proposals for state regulation include the development of a national strategy for sustainable development in the hospitality industry, the introduction of economic incentive systems (tax benefits, grants, and subsidies), and the improvement of the regulatory framework through mandatory environmental standards. At the corporate level, it is recommended to integrate corporate social responsibility (CSR) principles by supporting local communities, ensuring operational transparency, and fostering internal environmental initiatives. Particular attention is given to the development of public-private partnerships as an effective mechanism for implementing sustainable development projects, as well as educational activities aimed at promoting eco-friendly and socially responsible practices. To facilitate the adoption of innovative solutions, the article suggests establishing technological clusters that unite business, academia, and government to advance cutting-edge environmental technologies. The proposed measures are designed to overcome institutional and economic barriers while enhancing the competitiveness of hospitality enterprises. The study emphasizes that integrating CSR into corporate strategies and aligning national regulations with international standards can create a robust framework for sustainability in the hospitality sector. This will not only reduce the environmental footprint but also foster economic growth and social inclusivity within the industry. The article's practical significance lies in its potential application for improving public policy in the hospitality sector and developing corporate strategies aligned with sustainable development principles. The recommendations provided in this study are expected to contribute to increasing the industry's competitiveness and ensuring its harmonious integration into the global market.