World Panel
Viewpoint29 October 2019

Who makes hospitality sustainability happen: Governments, Industry, Consumers?

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Who makes hospitality sustainability happen: Governments, Industry, Consumers?

What (or who) helps hospitality companies improve faster? Consumer-led campaigns on plastic straws have pushed many hospitality companies to consider alternatives or simply ban single-use plastics. So far, however, the vast majority of guests still choose their hotels mainly by location and price. Using levers such as taxation or legislation, governments are also increasing the pressure. Recent examples include the European Union's ban on a series of single-use plastics such as cutlery, straws, and stirrers by 2021. Many states across the US are implementing similar bans. Beyond plastics, carbon pricing initiatives are in place or planned in more than 45 countries. The EU's Energy Performance of Buildings Directive requires all new buildings to be nearly zero-energy (NZEB) by the end of 2020 and existing buildings to transition towards NZEB by 2050. Finally, the hospitality industry's self-regulation and voluntary codes of conduct are considered popular approaches in dealing with sustainability challenges, but at times with limited success. Facing mounting environmental issues, are all three parties (government, consumer, industry) playing an equally important role? Do consumers have the foresight to act as a useful lever of change? Taxes and legislation are in the pipeline across the globe, so what needs to be done today to minimize the risk of getting hit? And how about driving consumer behavior change through inspiring guest experiences?

This viewpoint was created by
Willy Legrand , Professor of Hospitality Management at the IUBH International University
José Koechlin von Stein
Founder & CEO at Inkaterra Hotels

Our industry plays a key role when pursuing sustainability. Hospitality can contribute to the conservation of natural and cultural resources, as well as contributing to the wellbeing of local communities. In order to achieve this goal, hospitality can seek public-private alliances to maximize its positive impact over areas of influence, whilst also promoting the involvement of travelers in sustainable practices and environmental responsibility.      see more

 

For instance, NGO Inkaterra Asociación (Peru) established a strategic partnership with multinational beverage company AJE Group and the Machu Picchu Town Hall, in order to transform Machu Picchu into the first city of Peru and Latin America that responsibly manages almost all its solid waste.

 

The alliance was an outcome of a waste management crisis alerted by UNESCO in 2016 – a warning before including one of the Seven Wonders of the Modern World into the Patrimony at Risk list. As Machu Picchu is found in a small deep valley that can only be accessed by foot or train, the ever-growing tourism demand, transport limitations and the lack of space for traditional composting, waste management grew into a serious issue.

 

Hence, in 2017 the partnership donated a plastic compact machine to process seven tons of PET daily. One year after, a Biodiesel and Glycerin Production Plant opened within the grounds of Inkaterra Machu Picchu Pueblo Hotel. With the collection of used cooking oil from homes, lodges and restaurants in Machu Picchu, producing 20 gallons of biodiesel on a daily basis. The device processes six thousand liters of used oil every month, avoiding its spillage in the waters of Vilcanota River. Additionally, petrochemical-free glycerin obtained from this process, then donated to the Machu Picchu Town Hall to clean its sidewalks and stone floors.

 

In 2019, the first Organic Waste Treatment Plant opened in Machu Picchu. An innovative technology commissioned to Grupo Alimenta has the capacity to process eight tons of organic waste each day through pyrolysis – chemical decomposition at high temperature in the absence of oxygen. This process turns waste into bio-char, a natural fertilizer that contributes to the reforestation of the Andean cloud forest as well as agricultural productivity in Machu Picchu.

 

Sustainable Machu Picchu exemplifies what a strategic partnership between the public and private sectors can achieve when working together towards a common goal. It also manages to raise environmental awareness among the local community and travelers. Nowadays, Machu Picchu segregates most of its waste from its place of origin. A replicable initiative worldwide, promoting sustainability and a circular economy.

Comments
Roger A. Allen
Founder and Group CEO of Resources for Leisure Assets (RLA)

It is clear that over the past 18-months the consumer's voice and opinion has undeniably built a momentum and consensus for widespread sustainability change. Furthermore, in the past few months, the hospitality industry has responded and once a few of the larger international hotel brands announced sustainability initiatives, it was incredible how quickly so many other hotel brands joined what seemed like a procession given the almost daily sustainability announcements from a different brand. It is truly wonderful news that the hospitality industry is now getting behind sustainability initiatives in numbers! However, I do wonder how many where motivated by the right reason or was this more a case of having to be reactive for concern of bad public relations if they didn't. Am I being cynical? Or it really doesn't matter 'why'.  see more

The hospitality industry has always been about the guest, ever since the first inn opened in the sixteenth century and nothing has changed since. Consumer voice for sustainability change is forcing the hand of the industry and the hospitality industry must respond.   

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Joanne Hendrickx
Founder at Travel Without Plastic

In our experience of reducing unnecessary single-use plastic in hotels it's been interesting to see how the guest satisfaction comments are playing in role in driving change.  Many of us  believe that we know what our guests want but we don't always verify this by actually asking them directly.  The guest questionnaires may seem a bit old school, but during a hotel visit this week I personally watched 3 individual customers submit their questionnaires at the box in reception within a ten-minute period and according to the hotel management at this particular site, the guests expect to be listened to and to see change as a result of their comments.  Hotel managers we speak to have been surprised to find that guests no longer want plastic straws, and that some actually complain if their towels are changed when they left them hanging for reuse.  Guests of today can inspire positive change in management teams who may still be working to outdated expectations.

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Suzann Heinemann
Founder and CEO of InfraCert GmbH

Basically, several factors always play a role. In the hotel and hospitality industry, there are always new trends and customer needs. Sustainability is increasingly becoming the focus of the industry's increasing demand. But if the hotelier or restaurateur does not recognize this and is not convinced that he should be more committed to environmental and climate protection in order to remain marketable, then the processes will not change. One thing is for sure: there are plenty of sustainable solutions for the industry, they only have to be taken by the host.  see more

The industry is indeed well prepared and offers a wide range of products in terms of sustainability for the catering industry. Both large corporations and many start-ups come to market with new ideas and products. The variety in sustainable purchasing for the gastronomy and hotel industry is today greater than ever. Thus, e.g. Recyclable coffee capsules or those made of wood, ECO Amenity sets, Fairtrade products, organic products and regional suppliers are in great demand today and offer guests a sustainable experience without any loss of comfort. For the hotel or restaurant operator, these solutions even offer effective cost savings in the long term. 

The consumer is becoming more and more informed and paying more attention to his/her diet, health and environmental protection. Hotels and restaurants that focus on sustainability will be the winners and will be able to set up their business sustainably with small and cost-effective measures, thereby gaining new guests. 

The government is lagging behind. I am only aware of the german action „Zu gut für die Tonne“ and the Energy Campaign, which is also supported by the DEHOGA Federal Association. Certainly there is still some work to be done here, but due to the growing demand of the population for climate protection, there will still be a lot of room for maneuver in the future.

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Christopher Warren
Founder of My Green Butler
Supplier View

There are more than three groups involved in making sustainability happen. To progress we need a) governments to introduce legislation and enforce it (given the targets we need longitudinal audits that test genuine change); b) guests have priorities and expect hospitality to be run responsibly, this means they can be included in service innovation far more than they are, they will act on what is provided; c) hospitality needs to take a long term view, but often firms do not own their own building preventing investment and service innovation beyond small cosmetic adjustments. So we also need d) investors to build and retrofit buildings to be more efficient and councils to mandate them. Independent/smaller firms, who own their buildings, need education so, e) destinations and OTAs could participate more by sharing knowledge and incentivizing its application. No one party holds the key, it is a complex game that all have to play with full participation if we are to achieve serious global carbon reductions.  

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Franziska Altenrath
Co-Founder at TUTAKA

There is a blame game going on when it comes to who drives sustainability. The suspects? Consumers, businesses and politicians. The victim is usually the same across industries and borders: since consumers have already proven to be highly invested in sustainability, (soft) laws and regulations shall do the job! Politicians are easy targets. First of all, it is their job to produce mid and long-term visions of a good society. Secondly, their outcome ideally defines safe frameworks in which businesses can compete and citizens can act. And thirdly, they will not blame back. Or not too much, at least. see more

However, what businesses and consumers prefer to ignore is what stirs political action in democracies. Right, I am talking about majorities – realistic or perceived. Consequently, businesses and consumers should stop blaming each other and let their voices be heard. We need pioneering hospitality companies stepping ahead producing industry role models. We need hotels realizing their potential when it comes to positively inspiring guests to shift habits and consume more responsibly. We need guests demanding sustainable practice and asking hosts to make it easier for them.

The more best practice we create, the more guests we inspire, the more awareness we create, the better the chances of political action. 

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Nicolas Dubrocard
Founder & Director, Audit Diagnostic Solutions Tourism

This is a tricky topic with also differences depending on which side of the planet you are living. From my experience, I would think that the industry is in charge of improving and understand the sustainability impact of their activities as well as engaging the consumers. Governments should push and provide incentives instead of more taxation for the industry leaders to be attracted by sustainability. The consumer side is mainly driven by other considerations than sustainability. Despite many studies showing that the interest is growing for sustainability experiences, the usual decision-maker will be first price and location. see more

So it's up to the industry to really understand the added value to implement sustainability from the beginning of the process: the buildings. Sustainability needs also to be part of all the professionals curriculum.

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Elena Cavagnaro
Professor of Sustainability in Hospitality and Tourism at Stenden University of Applied Sciences

Findings from research that we conducted in the Netherlands suggest that guests are increasing willing to support or even push for sustainability. However, they also argue that hosts should take responsibility first. On the other side, hosts repeatedly stated that guests are generally not interested in sustainability. Interestingly, though, the hosts we spoke with do not regularly meet with or listen to guests. Hosts seem to base their views on guests' complains and general data from guests' satisfaction surveys.  see more

Considering guests' willingness to engage, we conclude that there is room for an open and informed discussion between hosts and guests on ways to transform their relationship to one that actually supports sustainable development of the hotel sector and wider society. 

In short, the answer to the proposed question would be that governmental legislation is surely welcome as a push factor towards sustainability, but that the best way to move swiftly forward is an open and informed dialogue between hosts and guests.

The research article on which this view is based can be reached via this link: https://doi.org/10.1386/hosp.8.1.23_1

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Peter Varga
Assistant Professor at Ecole Hôtelière de Lausanne (EHL)

Most hotel guests have already heard about overall sustainability challenges, and many of them have developed a basic awareness in their behavior. Nevertheless, the attitude-behavior gap is still very wide between what customers think is right and what they actually do, or can afford to do. Today's sustainable hospitality products and services such as organic F&B, sustainable constructions, ecohotels…etc. stay considerably exclusive. Hence, if governments become much more engaged in supporting the sustainable transformation in hospitality, through tax reduction, subsidies and sustainable policies…etc., customers will be able to join this trend and will massively buy sustainably.

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Kathy McGuire
Principal Sustainable Development at 3 Pillar Solutions, LLC

It certainly takes a combination of government regulations/incentives, consumer demand and the industry to voluntarily embrace environmental and social responsibility. Consumers should continue to be vocal because it works. The industry doesn't want regulation. They care about the guest experience. However, there is a misunderstanding about environmental practices negatively impacting that guest experience. What guest wouldn't prefer a higher-end experience of drinking out of a reusable beverage container, then a cheap plastic one?   see more

The reason we have clean air and water regulations is that business didn't voluntarily clean up their act. They said it would cost too much or they couldn't provide their products without polluting the environment. Well, they had to clean it up, and they're still in business. Ultimately, the industry should lead.

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Henri Kuokkanen
Associate Professor at Institut Paul Bocuse

Research supports the existence of ethically-minded consumers willing to support good business practice. Such consumers, through their choice, should drive companies to engage in sustainability to gain customers. However, consumer reports and actions do not always align. The bias to report the right thing in a survey without corresponding action undoubtedly plays a role, but it would be too easy to merely blame consumers. For any product or service to sell, it must meet demand. What if the sustainability and ethical offering by hospitality companies does not match consumer demand for them? see more

Understanding of real consumer preferences for sustainability remains limited. There is little evidence that the sustainability initiatives companies supply match customer perceptions of an ethically meaningful experience. Simply arguing that the industry is responsible for taking sustainability further would be naive, and regulation is certainly necessary. However, a profit-maximizing company should discover the preferences of its ethically-minded customers and fully engage in sustainable and ethical business practice to gain a strategic advantage. 

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Aurora Dawn Benton
Founder & CEO, Astrapto

First off, we have to stop doing research that pits sustainability against price, location, safety, and cleanliness. Just because it's lower on the list does not mean it is not wanted or preferred. Second, we cannot pit sustainability against features that are far easier to filter and judge on the majority of platforms out there (not counting 'self-assessment' based "green" box on some platforms or the complete dedication to "green" of other platforms). The focus on these features or criteria is what gives hotel owners the justification they are looking for that 'consumers don't care.' see more

Third, if we focus on end consumers as the lever, we miss the opportunity to move the market towards sustainability through business travel and events (where changing a few minds can have a massive impact). I've trained hundreds of professionals in this space and here's the reality: buyers want it and always say "we don't ask for it because we don't know what to ask for" and suppliers say "we have sustainability but only bring it up when they ask" (both of these observations are anecdotal from my experience but EIC has research that shows the "no one is bringing it up" phenomenon). Should we not focus on the few key players (e.g. Concur, Cvent, etc.) and decision-makers (e.g. large consulting firms' hotel RFPs) that mediate this space and see what they can do to drive change in the B2B space? 

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Arjan van Rheede
Senior Research Fellow in Sustainability at Hotelschool The Hague

I will only address part of the question, in my view, it is also important to see which actor does what, at what point in time. We can easily recognize certain stages of innovation in the process towards a more sustainable industry. Sometimes strong actions: new legislation or potential consumer boycotts are crucial, but at other stages of the innovation it is more effective to stimulation and facilitating change by supporting pilots and experiments. see more

An example from Amsterdam. The city council is putting very strict requirements on (new build) hotels, at the same time they bring together hotels to explore how they can contribute to the circular economy: resulting in individual and joined circular practice. Hotels in the city are also taking the lead in 'changing the status quo' by put pressure but are also jointly work together with wholesalers to make get more sustainable products and to make the whole logistical operation more sustainable (e.g. no single-use plastics).

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Willy Legrand
Professor of Hospitality Management at the IUBH International University

10 years ago in an article published in the Harvard Business Review on 'Why Sustainability is Now the Key Driver of Innovation', the authors argued that the “fight to save the planet has turned into a pitched battle between governments and companies, between companies and consumer activists and sometimes between consumer activists and governments” (Nidumolu, Prahalad and Rangaswami, 2009:3). To draw a simple picture, the authors refer this situation as a three-legged race. In that scenario, two individuals each have one leg tied to the other. They move forward, as a unit, with the two untied legs but with great difficulty as the third tied-leg is dragging behind or holding them back if not moved in coordination. see more

The question 'who makes hospitality sustainability happen: Governments, Industry, Consumers?' is answered with: All of them.

Consumers can buy, protest…or boycott. Governments are driving legislation, around the globe. And the industry… must innovate and be ahead of compliance. The ability to anticipate regulations is a method to innovate and create ingenious solutions. When carbon pricing and nearly-zero energy buildings are the talk of the town, then it is high time to innovate. There are numerous examples of hotel brands, owners, architects and designers that have captured the powerful innovation of carbon-neutral hotel buildings already. Those innovations, eventually copied by competitors, will become the norm in the industry.

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Gabriel C. M. Laeis
Lecturer at IUBH International University

Pushing for a more sustainable development in hospitality is undoubtedly a challenge that – in an ideal world – should be addressed by consumers, the industry and governments equally. In our Western neo-liberal economies, however, it is mostly left up to consumer choices and companies in pursue of profits to solve such issues. I do not subscribe to this trust in the 'invisible hand'. Consumers want satisfaction. This may be altered by education, resulting in consumers seeking what one might want to term 'educated satisfaction'. Yet, the rate at which we see consumers on a (needed!) large scale change their consumer choices is slow. see more

Education is a long-term investment and cannot be expected to translate into behavioral changes within short time periods. Companies, by their nature, will continue to seek profits among all else. Government stepping in with banning single-use plastic is a lovely first step but in no way a sufficient reaction to the current mega-challenges of global species decline and the climate crisis. We are tinkering around the edges. Carbon taxation, however, could be a much more powerful lever. This will need, of course, a global agreement amongst governments and a much faster implementation rate, if we decide to hold on to the 1.5°c goal. With respect to our tourism and hospitality industry, however, I wonder how we will cope with the fact that we are an industry that strives on customers with high disposable income. It is the growing wealth in, for instance, the BRICS countries that have caused a significant amount of our later GHG emissions. We will need to come to terms with the fact that traveling is a luxury and – from how many consumers define luxury today – is, in essence, blowing large amounts of CO2 into the atmosphere.

Should we ever get serious about sustainable development, governments need to lead the way and perhaps even take unpopular decisions. At the same time, the industry would be well-advised by thinking about the essence of hospitality and how we can create inspiring services outside of the current 'luxury = CO2' paradigm.

Comments
Sam Laakkonen
Contingent Managing Director - Sustainability at Techstars

I think all three (governments, consumers, industry) are currently playing an equally important role and it is difficult to define whether any one of the three has more influence in promoting sustainable practices than the other two. It is however clear that in the future, each one of the three will increasingly contribute to making hospitality industry more sustainable. Government driven environmental standards will become stricter and more widely adopted around the world, consumers will lead further sustainability-focused campaigns and hospitality companies will voluntarily adopt further sustainable practices and strategies. see more

I do however believe that it is the industry that will have the most important role in making hospitality sustainability happen. Not only will sustainability become instrumental to maintaining brand equity and staying competitive but it is also the only way to protect and maintain the natural environment on which a large part of the industry relies on and consumers pay to experience. Furthermore, it has now been proven that sustainable strategies and “circular hospitality” practices can provide significant financial benefits to companies that adopt them. Finally, sustainability is of course more than environmental management and companies that also address social concerns do find that their employees are in general much happier and more productive.

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Patricio Gonzalez Morel
Sustainability and resource efficiency consultant

Consumer-led campaigns can be effective drivers mainly for issues that are readily visible and verifiable, such as the use of single-use plastics. However, consumers don't see or understand what really takes place behind scenes and, as a result, can't gauge the true green credential of any property. Green hotel certification schemes should ideally fill this information gap and help consumers to identify the properties that do make a serious effort toward sustainability. see more

Unfortunately that doesn't work so well because 1) some certifications schemes are not rigorous and don't push hotels to achieve significant results; 2) consumers don't know which certification schemes are good and which are not; 3) the more rigorous certification schemes are typically more expensive and therefore less likely to be picked by hotel owners and GMs; and 4) clever GMs, chief engineers or sustainability officers can easily bend the truth and trick most certification processes.

 

The industry is not an effective driver for sustainability either. Owners and GMs are often too busy trying to increase revenues or keeping their hotels afloat to worry about sustainability. In addition, they don't have the knowledge (and are not willing to pay for the knowledge or take the time to acquire the knowledge) to understand what they can do to boost the efficiency with which they use energy, water, materials and chemicals in their operations. Although ignorance is apparently bliss, owners and GMs do miss out on a huge opportunity when they fail to see the connection between sustainability and profitability and overlook the easy improvement measures that lurk in every one of their departments and in every corner of their properties. After all, these abundant low hanging fruits typically yield ROIs ranging from 100 to more than 10,000% and, therefore, could have a significant impact on the financial well-being of an industry that operates with an average profit margin of only 5%.

 

In my view, this leaves governments as the only candidates for quickly driving sustainability in the hotel industry through taxation and regulation. Although this will not be a palatable solution, it will be beneficial to the environment as well as to hotels. If done right, it will finally force hoteliers to do the enormously profitable things they should have been doing for the past 50 years, but we're too busy, too distracted, too happy with status quo, or too blissfully ignorant to do. And, as the icing on the cake, it will help hoteliers protect the destinations that support their livelihood and keep climate change at bay.

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