The hospitality industry is a major segment of tourism, which is, in turn, a main economic contributor for many destinations. Sustainable tourism practices are promoted worldwide by international organizations like the United Nations World Tourism Organisation (UNWTO) to assist different countries. Various frameworks such as the Global Reporting Initiative (GRI), the Sustainable Development Goals (SDGs), United Nations Global Compact (UNGC), and environmental indices and management systems such as ISO 14001 are common assessment tools for environmental sustainability. This research reviews the relevance of incorporating environmental and socio-economic factors within hotel operations that may lead to improved transparency and operational effectiveness while guaranteeing adherence to sustainability within the hotel business. Accordingly, a systematic review of environmental sustainability assessments in hotels was carried out. A comprehensive analysis of research articles published between January 2000 and January 2023 by reputed databases ranging from Google Scholar, Scopus, and others, were used to conduct the literature review. A total of 38 papers were examined adhering to the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) standards, and it is worth noting that a significant increase in interest emerged in 2018, especially in Europe and Asia. The review reiterated the relevance and need to use relevant assessment methods and tools that aid in implementing sustainable development strategies to promote tourism-dependent economies, which can serve as a guiding note for varied tourism destinations. It additionally provides valuable knowledge for future directions, whilst improving research methods and incorporating innovative technologies. These advancements are essential as they may guide policy decisions to protect the environment within the hospitality industry.