Hospitality Sustainability Moving the Agenda Forward? Or Not? | by James Holleran for ehlite.com

Do hospitality operators value sustainability? Is increased pressure on the natural, social and environmental resources generated numbers of tourists in concentrated tourism destinations of any importance to them? Will they be pro-active or reactive when it will be time to take actions?

We all know what happened to the tobacco industry when many sector leaders determined they were not responsible for impacts of consumer decisions to consume its products. We are still watching for the final outcomes of the current public debate on “quick service” food menus and the health related impacts of consumer decisions to consume its products. Now, we are beginning to see a new public dialog taking shape over the efforts made by hospitality operators (HO’s) to get consumers to travel and the total economic, environmental and social costs associated with the impacts of consumer decisions to respond.

The question I am posing for consideration in this article is: how will the hospitality industry react to this changing political and public awareness market condition? Will the stakeholders living in the destinations in which HO’s depend, perceive these operators are making every effort to move their sustainability agendas forward; or not? And if not, when the time comes when tourism destination stakeholders, concerned over competition or survival, take actions to assure sustainability, what strategies will they use? Will they perceive the only way to assure HO’s involvement will be the application of new taxes (CO2) or surcharges (energy, water) or policies and regulations to push them to be more sustainable? Or will they perceive that HO’s, profiting from not paying for the full cost associated with travel, “Get IT”. That is, have gone beyond the “Green Room” or PR oriented C.S.R. (Corporate Social Responsibility) response and demonstrated its willingness to address the full costs associated with the use of natural and social capital? This includes the cost of increased pressure on the natural, social and environmental resources generated by increasing numbers of tourists in concentrated tourism destinations. It also includes the extensive burning of fossil fuels associated with air and other forms of travel often representing about 90% of a tourist related CO2 emissions (See figure 1). According to the European Environmental Agency (EEA) tourism is responsible for 5-7% of total emissions in Europe and climate change actually threatens some of the prized tourism destinations such as beaches, island paradises and coral reefs. Going back to my question; I do not know the answer but I am convinced it will not be many more generations before we all will. The International Council for Local Environmental Initiatives (I.C.L.E.I.) reports that over 6,500 municipalities world wide have already engaged in Local Agenda 21 planning processes, many also tourism destinations.

Fig. 1 - What can be done in any property is marginal given travel related cost to the environment.

It is commonly understood that for HO’s; it’s all about return on investment, shareholder equity and economic sustainability. In a business model with high fixed costs and capital investments, volume is essential and the continued growth of tourism demand is the driving force behind increasing hospitality supply, jobs, tax revenues and the use of natural capital. This continued cycle of new or expanded tourism destination development has spread travelers across the globe. Some developing or undeveloped countries, desperate for foreign receipts and economic growth, have sacrificed natural and social environmental assets to feed this dynamic machine. Travelers seek new, remaining unique biodiversity environments, and are supported by the concept that anyone who can afford it has the right to consume whatever natural capital is required—to go where and when they want. That is, as long as they pay the HO’s who supply the travel to and the destinations being used. The increasing formation of large multi-national hospitality corporations are anxious to feed their growth requirements with more destinations with the qualities being sought. The protectors or land managers of this limited supply of next generation destinations have begun to realize the costs associated with un-sustainable growth and the limited supply of quality sites left. As a consequence, they are starting to raise entry and development fees and management requirements.

So is there any reason to believe there will be a change to this continuous pattern of growth? Given the resilience of consumer demand following both human and biological terrorism over the last few years, it would appear that populations of developed countries have made travel an integral and essential part of their lifestyles. So if demand for travel is likely to continue to grow over the long-term, it would only be limited if affected by a shortage of supply for both quality travel and destination oriented services and the allocation of full costs for the required consumption of natural capital. If the availability of clean water or solid waste disposal sites or clean air becomes a resource limitation, then the costs of travel and tourism will increase. If resource substitutions are not available, we will begin to witness a slow decline in destination quality and quantity leading to a gradual reduction in demand. Again getting back to my question, we may begin to see signs of change when existing tourism destinations, competing for market share, begin to evaluate the full costs associated with tourism. As tourism destination stakeholders become equally concerned with long-term economic growth as they are with the short-term profitability, they will examine the full benefits and costs associated with tourism investments. With greater awareness of raising costs for clean water, air, energy, and the maintenance of unique local culture resources (food, music, dance, history, art, crafts, etc.), required to offer competitive values, destinations will need to spend more for sustainability. This investment must come from those who benefit from the revenues generated by destination guests. If HO’s are not able to provide for their fair share of this contribution, while maintaining their own economic sustainability, or able to convince destination travelers to pay for the eco-premium being provided, we may see a reduction in supply.

Tourism has a major impact on local communities in tourist destinations. It can be a significant source of income and employment for local people. It can also pose a threat to an area’s social fabric and its natural and cultural heritage, upon which it ultimately depends, but it is well planned and managed, it can be a force for their conservation.

Tourism & Local Agenda 21, The Role of Local Authorities in Sustainable Tourism. UNEP & I-C-L-E-.I., 2003. p. 7.)

The Ecole hôtelière de Lausanne (EHL) is also concerned about possible long-term reductions in the supply of hospitality operators as it continues it’s Mission to prepare new generations of leaders for the hotels, restaurants and other related services required by tourism destinations. In response to this concern, it has established EHL-HISD (Hospitality Institute for Sustainable Development). Driven by a dedicated team of interdisciplinary faculty representing such areas as law, architecture, engineering, planning, ethics, human resources, tourism, marketing, etc, its vision is to provide needed support to hospitality operators who are interested in moving their sustainability agenda’s forward. A part of the service package being developed by EHL-HISD is a team process that can be applied in any destination where tourism stakeholders, including HO’s, want to explore the development of new partnerships to support more sustainable destinations. Figure 2 illustrates this relationship suggesting that EHL-HISD focuses on the relationship between destination tourism stakeholders and HO’s in developing destination oriented sustainability.

Other service offerings include the development of a property based team. This Team is focused on delivering state-of-the-art technology and human resource oriented consulting to any HO who is interested in learning how to develop and maintain sustainable policies, practices and procedures to enhance profitability and destination competitiveness. (See Figure 3 for an illustration of this activity) Remaining EHL-HISD planned service offerings include research, database services, conferences, seminars and forums.

Fig. 2 - New hospitality sustainability marginal improvements. Increase efficiency focus on energy management systems & HR applications.

Understanding the hospitality business model, EHL-HISD believes it is possible to develop both new supply and demand based initiatives leading to “winwin” situations for all parties, including travelers and local destination residents or hosts. It has scheduled its first Forum on Stakeholder Partnerships at EHL in September, 2004 to develop action oriented models structured along seven key themes. Following the Forum, EHL-HISD will seek out several destinations willing to support the pilot testing of the models. The First Annual EHL-HISD Conference in September 2005 will feature the results of the pilot testing and how these strategies can support the hospitality sector. Our vision for the future is by working with and through tourism stakeholder partners, HO’s can provide such destination oriented services as generating more clean water or energy or treating more waste than is required for property profitability.

Fig. 3 - Focus is not only destination sustainability but support of HO's to be able to do more while maintaining economic sustainability.

Of course, the question is, will HO’s perceive the need to get involved before tourism growth related stresses result in destination based market share losses? Will HO’s be a pro-active destination partner or a reactive supplier who does not see the need to be concerned with the impacts of the consumers who choose to respond to their marketing efforts to travel? The bottom line, will they be perceived by the destination impacted public as an industry sector determined to move its sustainability agenda forward, or not?

EHLITE – the Ecole hôtelière de Lausanne Institute of Technology and Entrepreneurship – is a multidisciplinary learning platform offering the first creativity management centre in the hospitality industry. EHLITE bridges the gap between technology suppliers and users in the hospitality industry at large. EHLITE facilitates exchanges between participants in the whole value-chain of the industry, including all service providers, such as airlines, hotels and restaurants, as well as technology suppliers, such as architects, engineers, and hardware/software companies. EHLITE is a new venture from the Ecole hôtelière de Lausanne (EHL), one of the world's top hospitality management schools. It responds logically to two services recently developed and currently managed at EHL: Genesis – a business incubator – and Synergy – a business network. The services provided by EHLITE will focus on the acquisition, development and transfer of knowledge. For more information visit www.ehlite.com