Tourism is receiving increased attention as a development option in developing countries but with the vulnerability of developing countries to climate change, it is inevitable to take climate change into serious consideration in the tourism sector. To do this on an SME level a systematic approach had been developed. This proven 3R (REDUCE-REPLACE-REDESIGN) methodology is applicable to all Tourism SMEs whatever innovation stage they have already reached. Building upon the results and achievements of the ZCR1 (2009-2014) project in the Philippines, this project envisages going to the next level of energy efficiency towards a carbon neutral operation. This project will not only continue the replication of ZCR1 strategies in many regions of the Philippines but expand and adapt the method to Thailand. With additional focus on access to finance and match with Green Hotel certification, a cross country exchange of best practices will be facilitated through exchange visits and strong policy dialogue. Through the strong capacity building program, sustainable consumption and production practices of tourism SMEs will be taken up easily and economic returns from achieved savings trigger a high rate of replication.