Purpose - This thesis explores how financial market participants (FMPs) in hotel capital markets experience the Sustainable Finance Disclosure Regulation (SFDR). It aims to identify how ESG disclosures influence investment decision-making and to assess where regulatory intent diverges from practical implementation.

Methodology - Semi-structured interviews were conducted with 10 FMPs, representing 6 stakeholder types active in European hotel capital markets, between March and April 2025.

Findings - Investors and lenders prioritize ESG indicators such as energy performance certificates (EPCs) and operational KPIs – particularly energy consumption data – though ESG integration remains largely driven by “financial-first logics.” SFDR implementation is uneven: “highly professional investors” possess the capacity to meet the directive’s demands, whereas smaller actors, including “mom-and-pop” hotel owners and operators, often lack the necessary resources, data infrastructure, or expertise. While SFDR classification increasingly shapes fund structure and capital raising, its influence on individual asset transactions remains limited but is expected to grow.

Research Limitations/Implications - Semi-structured interviews with a small, diverse sample enabled context-specific insights but limited comparability and replicability. Findings should be viewed as exploratory and indicative rather than representative of the sector.

Practical Implications - The findings underscore that ESG alignment is increasingly tied to both financial and operational leverage in commercial real estate, yet many investors still overlook its influence on cost of capital and asset-level performance. A persistent “wait-and-see” mindset – amplified by geopolitical uncertainty – continues to delay capital flows into at-risk hotel assets. To advance transition finance, SFDR must be recalibrated to avoid reinforcing divestment from stranded assets and instead incentivize their decarbonization.

Originality/Value - This is the first empirical investigation into how FMPs experience SFDR and ESG within the distinct context of hotel capital markets.