The hospitality sector plays a major role in driving economic growth within tourism, yet it consumes vast amounts of energy and water while producing substantial waste. When hotel operators plan to shift toward cleaner operations, upfront capital often stands as a primary obstacle. Green finance offers a funding bridge that directs capital into resource-efficient projects, environmental certifications, and operational updates. This systematic review evaluates how green finance drives sustainable tourism transformation in the hospitality sector. A comprehensive literature search was conducted across Scopus, Web of Science, ScienceDirect, MDPI, and Google Scholar for peer-reviewed journal articles published between 2022 and 2026 that address green finance, ESG frameworks, eco-friendly practices, or hotel certifications. Following PRISMA guidelines, 20 relevant articles were selected and verified. The findings reveal five key patterns. Green finance instruments, sustainable credit options, and green taxes broaden the scope of available capital. ESG performance generally connects to improved financial outcomes for hotels, although initial setup costs remain high. Eco-friendly practices and certifications help strengthen brand image and customer loyalty, with documented willingness-to-pay premiums hovering around 5%. Improved credit access boosts overall tourism performance, whereas mid-scale and independent hotels encounter hurdles due to modernization costs. Overall, the path of industry transformation is moving away from basic operational efficiency toward more regenerative models. Hotels need to link green investments directly to performance indicators, secure accessible financing options, and maintain open, accurate communication with guests.