The business case for responsible tourism

A new meta-analysis of dozens of recent tourism surveys and market studies finds “increasing recognition among both travel professionals and consumers of the importance of responsible travel.’ The analysis by the Center for Responsible Travel (CREST), a nonprofit organization headquartered in Washington, DC and affiliated with Stanford University, also finds “strong evidence” that responsible travel is “good for the economic bottom line.” We have extracted a portion of their meta-study findings, on this business case.

In 2012, the number of international tourist arrivals surpassed, for the first time, 1 billion, and is forecast to reach 1.8 billion in 2030, according to the World Tourism Organization (UNWTO). In addition, in 2011, international tourism receipts surpassed $1 trillion for the first time ever.

With continuing growth in travel, there is increasing recognition among both travel professionals and consumers of the importance of responsible travel—travel that minimizes negative impacts, brings economic benefits to host communities, and preserves the cultural and natural resources of the destinations. Fortunately for travel businesses and destinations, there is strong evidence that responsible travel is also good for the economic bottom line.

Within the last few years, sustainability has become much more mainstream within the tourism industry, with increasing numbers of businesses creating environmental departments, adopting environmental and social good practices, seeking certification, and looking at ways to ‘green’ their supply chain.

Experts say…

•  “One thing is for sure — travel companies and services are all beefing up their eco credentials in order to attract the rising number of customers seeking a ‘green’ experience.” —Jason Halal, Manager of Sierra Club Outings
• “Sustainability is at the forefront of our business model because of customer demand.” —Bruce Poon Tip, Founder and CEO, G Adventures
• “Sabre is keenly focused on the economic, social and environmental sustainability of the travel industry and we are committed to providing our customers with products and services that help them promote these same long-term values throughout their businesses.” —Greg Webb, President, Sabre Travel Network
• “When it comes right down to it, sustainability pays. And it pays in three ways: guests are increasingly interested, so it’s good for business; there are real opportunities to reduce costs and do things that are ‘green’ at the same time; and something not everybody realizes, there is so much passion and energy within the organization to do this that the ability to get people excited about the company they’re a part of through the kinds of green practices we’ve been implementing is another source of success and payoff. ” —Frits van Paasschen, CEO, Starwood

Surveys and Statistics show…

• A 2012 report by The Travel Foundation and Forum for the Future states, “Today’s consumers expect travel companies to build sustainability into their product offer. A majority (70%) believe companies should be committed to preserving the natural environment and 55% want fair working conditions, while three quarters want a more responsible holiday and 66% would like to be able to easily identify a greener holiday.” In addition, “84% of those working in marketing & PR management see green credentials becoming increasingly important as environmental issues move to the forefront of customers’ minds.” This report identifies 6 key benefits travel businesses will gain by adopting responsible practices:(a) Reduce costs and improve efficiencies.
  (b) Manage risks and meet emerging legal and regulatory requirements.
  (c) Engage staff in CSR, which has proven to be a key driver of employee satisfaction.
  (d) Gain competitive advantage by offering differentiating experiences to customers.
  (e) Meet emerging consumer trends.
  (f) Protect your business, by protecting the environment on which it depends.

• In 2008, the World Travel Market’s Global Trends Report urged businesses to pay attention to “consumer trends that resonate across all regions—the desire for social and environmental responsibility, social interaction, authentic travel experiences and fair trade practices. During the downturn, travel and tourism companies that adapt and integrate such business practices into their product and service offer will be best placed for survival. They will gain a valuable point of differentiation in the face of declining consumer purchasing power. Consumers are willing to trade up for sustainability, thus operators should let ‘conscientious consumption’ now drive the travel and tourism industry through these uncertain times.”
• A groundbreaking 2011 study by the Harvard Business School showed that companies that adopted environmental, social, and governance policies in the 1990s outperformed those that did not. The evidence from a detailed comparison of 90 “high sustainability” companies and 90 “low sustainability” or traditional companies “suggests that sustainable firms are not adopting environmental and social policies purely for public relations reasons. Adoption of these policies is not just cheap talk; rather these policies reflect substantive changes in business processes.”
• More than 51% of meeting planners will hold meetings only in sustainable venues, according to a 2010 survey. And, according to an executive at the JW Marriott Denver, “75% of meeting planners ask about green initiatives when deciding where they want to have a gathering.”
• 65% of corporate travel executives responsible for more than $10 million in annual travel budgets are in various stages of implementing ‘green’ business-travel guidelines, according to a 2011 survey of Association of Corporate Travel Planners members.
• The hospitality industry spends over $7.5 billion on energy each year. Reducing energy use by 10% would result in approximately $750 million in annual savings.
• Examples of businesses demonstrating the economic and strategic benefits of sustainability include:

(a) Many leading hoteliers have created senior management positions in sustainability, recognizing its importance to their business. These include: Marriott, Hilton, IHG, Fairmont, Wyndham, Accor and Kimpton, among hoteliers, as well as Royal Caribbean Cruise Lines, TUI Travel, and Vail Resorts.

(b) Marriott International has developed a ‘green’ hotel prototype pre-certified by the U.S. Green Building Council as part of its LEED Volume Program. This prototype saves Marriott’s hotel owners an average of $100,000 in development costs, six months in design time, and up to 25% in terms of energy and water consumption

(c) TUI Travel saved about GBP £21 million and reduced its carbon emissions by more than 200,000 tons between 2008 and 2011.

(d) The Loews Philadelphia Hotel increased its Energy Star score by 16 points and reduced energy use by over 13% in 3 years by implementing improvements to its HVAC, lightening, and water systems.

(e) From 2005 to 2008, HEI Hotels & Resorts undertook a number of energy efficiency projects at its properties, including (i) retrofitting light fixtures with energy efficient bulbs, (ii) installing HVAC management systems, and (iii) upgrading water heating controls and plumbing fixtures. These programs produced, on average, a return on their investment after  2.79 years.

(f) The Willard Intercontinental Hotel in Washington, DC has documented over $1 million in new business a year as a direct result of its sustainability initiatives. The additional business comes from guests, meeting planners, and wedding parties who say they chose the hotel because of its ‘green’ initiatives.