World Panel
Viewpoint31 August 2020

The (Green) Recovery Imperative: Hospitality Re-Set Or Bouncing Forward?

Sustainability in Hospitality

— 15 experts shared their view

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This viewpoint was created by
Willy Legrand , Professor of Hospitality Management at the IUBH International University
Carlos Martin-Rios
Associate Professor at Ecole hôtelière de Lausanne (EHL)

The uncertainty around the Coronavirus outbreak may have an impact on how far the travel, hospitality, and foodservice sector will go to embrace sustainability. Academic research and practitioners agree that the challenge posed by the current pandemic can and must be solved by developing leadership and management capabilities to support sustainability through innovative collaborations. see more

Back in May 2020, Professor Willcocks, at the London School of Economics rightly pointed out "this crisis is a metaphor for our general failure to entertain, let alone take actions to mitigate, global systemic risk." In an interview for McKinsey Quarterly, former CEO of Unilever Paul Polman stated "there are fewer and fewer problems specific to any one company, industry, or even country. As a result, global initiatives—preventing climate change, deforestation, or declining biodiversity—demand that we take a collective approach toward ownership." Polman went on to say "there's a fine line between arrogance and self-confidence, between humility and humanity when you implement programs with external collaborators."

The 2008-2012 global financial crisis crudely revealed the industry is ill-equipped to strategically adapt and sort out a crisis. The current pandemic crisis has hit the activity even harder. Many of the fault lines in the industry are exposed: the indefensible levels of social inequality exemplified by the surge of lay-off hospitality and restaurant workers becoming homeless in cities like London (The Guardian, 2020) and New York City (New York Eater, 2020); the undermining conflict between corporate short-termism and sustainable business models, and ultimately the fragility of an overly individualistic sector with little collaboration to lock in long-term deals with a range of players in the value chains.

This pandemic crisis shows that a more resilient travel, hospitality, and food service sector cannot take place without collective action. We can have a bigger impact by working together, sharing best practices, and building a culture of transparency and accountability. Together we can drive a real change and enable the transition towards a sustainable, circular model for hospitality and tourism.

Comment
Marloes Knippenberg
CEO of Kerten Hospitality

For the hospitality industry to come out of the havoc, we all need to focus on building Ecosystems grounded on sustainable supply chains with scale, as well as create elaborative business models across the larger value chain and through strategic partnerships locally and with international entities. The onus post-COVID-19 will no longer be on green investment for the recovery, but on ethical investment, sustainability for the sake of IMPACT, and growth in challenging industry times while supporting the Local Supply Chain that involves different stakeholders. Collectively, we will mature enough to engage investors, owners, guests, residents, entrepreneurs, digital nomads who will jointly foster that coveted impact. see more

Secondly, its mission-critical that local supply chains become transparent, responsible, and resilient with the pivot of going LOCAL where all parts are being self-sustaining. That can only be achieved when an owner and an operator share the same values: treating them as an extension of our business and engaging in a meaningful two-way dialogue.

Thirdly, 'sustainable recovery' is embedded in the soft parts and the soul of a project or the Building of a community within the larger sustainability-driven ecosystem and applying a shared commitment approach. How can you build sustainable long term value and RoI for your real estate unless you focus on long and short stays, conveniences, privacy to work and meet, with tailored and e-retail and e-food experiences. In order to deliver on this objective, we will need to admit that it is imperative to identify who you are targeting and what they want, the brands they seek, and how this connects. Ecosystems don't grow just because you make a fancy building with facilities. They grow wholesomely and will continue to grow to push the recovery in 2020 and beyond. 

Comment
Jonathon Day
Associate Professor and Graduate Program Director School of Hospitality and Tourism Management

Balancing survival today with working for a better tomorrow is challenging – but it must be our highest priority. The natural reaction is to rebuild as things were, to replace what was lost. It is much harder to stop and ask “how can I makes things better?” than they were before (particularly if you are worried that you won't make it through next week). see more

Building back better is a deliberate act. It's not a fortuitous “bounce” that lands in the perfect spot. But it can be done. My colleagues, Drs Sandra Sydnor and Maria Marshall, in their work on post-disaster resilience, have found that while a majority of businesses can survive a catastrophic event, a small proportion of enterprises come back better after a disaster. The work of building a better future – where tourism lives up to the promises of sustainability – healthy environment, improved social and cultural outcomes, and economic benefits for people and communities – starts now. 

There is no “one size fits all” answer to how to do this. It is a complex problem and every business, every destination, will have a different answer. Even so – here are some questions that may help. Can I improve my energy profile? Can I reduce waste – particularly food waste – in my business? Am I marketing to a market segment that aligns with my values and values my offerings? Is my business part of the solution to the social justice issues in our community?

As we have seen in the last few months – change can happen. Now is the time to change for the better.

Comment
Sam Laakkonen
Contingent Managing Director - Sustainability at Techstars

I think there needs to be, and hopefully, there will be, a shift in thinking. Sustainability is often associated with additional costs. This is however often not the case and models that embrace sustainability also provide cost savings to businesses. I have in earlier panel answers talked about technology and in particular the power of data, and I think data will be one of the key components for activating “green recovery in hospitality”. see more

Most businesses already possess massive data sets on everything ranging from energy consumption to customer records. This data is however still very under-utilized. According to Harvard Business Review (What's Your Data Strategy 2017 — Leandro DalleMule and Thomas H. Davenport), “Cross-industry studies show that on average, less than half of an organization's structured data is actively used in making decisions — and less than 1% of its unstructured data is analyzed or used at all”.

This, in my opinion, presents a significant opportunity for all industries, including hospitality. Building expertise and organizational competence in data science is not difficult, and can also be bought relatively inexpensively from third parties. Once data is analyzed and understood, it provides countless opportunities for operating model adjustments. It also provides opportunities for deploying the data to automatically adjust the ways business is done, by harnessing technologies like Machine Learning and AI.

I think the hospitality industry would find an investment in data money well spent, and in addition to providing a way to a more sustainable post-COVID world, it could also provide an opportunity for a more cost-effective post-COVID world.

Comment
Kathy McGuire
Principal Sustainable Development at 3 Pillar Solutions, LLC

Leadership from hospitality trade associations, such as the American Hotel & Lodging Association in the U.S., by educating and encouraging their industry members and partners would go a long way to avoid slipping back into pre-COVID-19 norms. From what I have seen locally and read about elsewhere, green initiatives have been set aside in lieu of cleaning initiatives. It is as if they see it as a trade-off and not something that can be combined for an even greater outcome. see more

More and more investors are seeking ESG KPIs. These investors could require green recovery plans from those real estate properties they rely on to be profitable, just like they require other KPIs to be met.

Education, not only on the benefits but how to go about identifying opportunities and executing a plan is what is missing. But with little money available to hire experts, the typical general manager doesn't know what to do. Perhaps an educational movement on how to be CLEAN + GREEN that could be shared at little to no cost would be a way not to lose the progress that has already been made. 

Comment
Julia Massey
Vice President Global Sustainability at Kempinski Hotels S.A.

The circumstances of the economic downturn have activated cost-saving mode. Which includes saving utility costs that make up a considerable share of operational expenses. At the same time, technology providers are more willing to share investments for technology set up, in return for sharing profit from saved utility costs. In addition, the use of digital technologies increased, in order to meet the requirements of personal distancing. This will lead to a widening of digital technology use for other areas of business life, with a consequent impact on the use of natural resources (paper use, waste management, monitoring of appropriate equipment maintenance, etc.) All this leads to the financial feasibility of resource-saving, adding to the motivation driven by the pressure of sustainability-conscious clients and management.

Comment
Florian Kaefer
PhD, Founder & Editor, Sustainability Leaders Project

Whether hoteliers will do what they can to use the current crisis as an opportunity to be (better) prepared and (more) resilient when the next crisis hits - and the climate emergency for many destinations will be a question of survival - probably depends on their own values and purpose of doing business. If you are a hotelier and host through and through, that is, if this is your passion, then you will find ways to invest in resilience and quality. If not, then you might continue to ride the wave as before and either go under or make it out of the water in time before the next, bigger wave hits. see more

In any case, the current pandemic is a huge learning curve for us as individuals (how do we cope with stress, etc.), as businesses (how do we balance economic needs with social responsibilities) and as communities (how do we take care of each other in times of crisis). So yes, nothing will be like it was before. And that might be a good thing.

Comment
Henri Kuokkanen
Associate Professor at Institut Paul Bocuse

Fortunately or unfortunately, depending on the point of view, a bounce back to the pre-COVID world is unlikely. Leisure travel will eventually recover. However, business travel may never reach the volumes seen earlier, as the crisis could finally prompt the long-predicted conversion to online meetings and permanently shrink this segment. This, of course, is good for the environment but not so for the industry. see more

Therefore, the road to recovery is unclear. Plenty of research suggests customers prefer and endorse responsible and green practices. The subsequent questions are 1) which of those practices truly matter to the customer, and 2) how hotels can meet this demand for sustainability and convince customers of their genuine good intentions. One possible solution is to convert the sustainability approach from developing separate initiatives to creating responsible and sustainable experiences that are meaningful to the guests. This would require the application of techniques used in experience design to sustainability and transform the field into a new direction for a green recovery.

Comment
Aurora Dawn Benton
Founder & CEO, Astrapto

We continue to have a culture and structure problem that blocks a "green recovery". I frequently hear students who work for chains say they read about sustainability initiatives on the corporate website (not a job requirement; it's a class assignment), but then do not see evidence of those commitments at their property. In general, the level of cynicism I face from students, about their GM/owner's openness to sustainability, is disheartening.  see more

We need to identify the gap between brand level statements and actual implementation and accountability at the property level (enough with the halo effect). And then "activate" sustainability and recovery by empowering and enabling people on the ground (all levels, all departments), who can move sustainability forward but need a little guidance and encouragement. It's awareness campaigns, training, green teams, stakeholder engagement, and all the stuff we already know make good sustainability but we have to move past the excuses - turnover, language barriers, unions, costs... and now COVID. 

One student, who works for a brand that regularly touts its environmental performance, waited more than 3 months to get permission from HR to start a green team. He was told it was a corporate policy (not COVID related because it had something to do with sending emails to coworkers). There are far-reaching consequences to a policy that discourages a potential leader, with passion and willingness to volunteer his time and effort. That is not a recovery or resilience mindset and it permeates the industry. This is not a one-off example I'm sharing - in 2 years and over 100 green team startups, this is a common experience. More than a "green" recovery, we need a "human" recovery.  

Related article by Aurora
Comment
Willy Legrand
Professor of Hospitality Management at the IUBH International University

More by force than by choice, the tourism industry is looking for reinvention. Nanotourism (Dekleva and Gregorič, 2014) – at the opposite of mass tourism - probably best describes the transition, which has taken place over the past few months to reboot local economies. Travelers (re)discovered local heritage and enjoyed nature-based destinations after months of lockdown. The short-term priorities of the hospitality industry are clear; cost-cutting measures (including a hard look at utility costs) and access to some liquidity (via governmental support programs, if available) to avoid the specter of large-scale insolvencies. see more

The green recovery imperative is based on the concept that both climate change mitigation and environmental protection should be prioritized to help economies recover. American economist and laureate Joseph Stiglitz recently argued that public spending on environmental and labor-intensive projects is essential for recovery and more efficient than tax cuts (Stiglitz, 2020). In recent research based on a thorough examination of the current crisis along with an analysis of hundreds of stimulus plans since the Global Financial Crisis, five policies have been identified which aims at climate change mitigation while offering clear positive economic impact: “clean physical infrastructure, building efficiency retrofits, investment in education and training, natural capital investment, and clean R&D” (Hepburn et al. 2020, p.3). In a depressed economy, it is essential to have a strong sustainable recovery plan to ensure that the private sector undertakes investments in clean technologies (which the sector will not do if no appropriate support is in place during those difficult times). Policymakers are called upon to create that framework that can ensure a transition of an entire sector toward low-carbon.

References:

Dekleva, A. and Gregorič, T. (2014). Nanotourism: Definition. https://nanotourism.org/definition

Hepburn, C., O'Callaghan, B., Stern, N., Stiglitz, J., and Zenghelis, D. (2020). Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?. Smith School Working Paper, 20-02.

Stiglitz, J. (July 02, 2020). Invest in the green economy and we'll recover from the Covid-19 crisis. The Guardian. https://www.theguardian.com/business/2020/jul/02/invest-in-the-green-economy-and-well-recover-from-the-covid-19-crisis

Comment
Frauke Fischer
Founder, Agentur Auf!

Readiness and willingness are only two aspects to a “build back better” turnaround to sound eco-friendly and sustainable hospitality industry. Even if both exist, we'll often see a lack of expertise on how to deal with biodiversity and ecosystem services in a manner that makes the difference between greenwashing and responsible business development. Planting a few trees and use recycled paper is just not enough. (Nature) tourism depends heavily on intact ecosystems and their services. Not only because nature makes good scenery for a nice vacation, but because hotels and resorts depend on ecosystem services such as cleaning air and water or providing healthy and diverse food. If we had protected rainforests in Asia instead of seeing them as a free supermarket for natural resources – n-COVID-19 would never have emerged. Biodiversity protection is our greatest challenge – we should all take it seriously.

Comment
Simon Martin
Head of Development Hospitality-Catering at IECD

Hospitality will be bouncing forward. In the last months, we heard and watch through countless webinars what will be the strategy and what could be the best move. Despite the several initiatives to put environmental concerns at the front, the curve is still at its early stages. The industry is still in a shock and the second wave of consequences of the COVID-19 crisis has not started yet. see more

As over-tourism shall not be an issue, for now, the few travelers who will gradually resume will do it with a higher conscience and the hoteliers will observe the first reactions and requests.

The demand of customers for a more responsible tourism & hospitality industry, after a steady evolution in the last decade, has continued to change in the early part of 2020. One of the trends, that leans towards more domestic tourism, will bring traveler's behavior to be even more careful of their environment and the impact of their stay. Additionally, lost of people during the confinement had time (a lot of it) to think and reflex on their impact and their future. It seems to me that the conscience level rose, and this shall guide the demand for more care about communities and nature.

That demand is the main component of a green recovery. The “rest” is already there: technology, data systems, processes, certifications, best practices, and leaders in the area so we can follow the steps. We even already have the proof that “going green” is, more often than not, a smart economical move. Importantly, the willingness and determination of the employees who operate the industry is already strong. Last and possibly the least: policies. Some are existing, few are being discussed, many could have been implemented a while ago. If they have not it is because only the demand and our economical system's logic will bring the investors, owners, and operators to act. Long-term public interest shall prevail on the short-term individual interest, as this crisis has raised the sense of responsibility, as well as lowered the importance of “time”.

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

Crises have been often saluted as an opportunity for frog-jumping towards sustainability. 2008 will be still in the memory of most of us; also then the idea of a green-recovery was launched but it failed to materialize. Will the post-COVID-19 recoveries be different?  see more

The pessimist in me says no because sectors such as the hospitality industry have been very badly hit and are struggling for survival. A survival mode is not supportive of sustainability - the past teaches us. 

The optimist in me, says yes because COVID-19 has formed for many a period of reflection on the limitations of the business-as-usual model. 

The realist in me says yes if ... if governments will be supportive of a green recovery, NGO will keep pushing and guests pulling for it.

Comment
Xenia zu Hohenlohe
Partner/Director at the Considerate Group

The good news being that it is not just up to the hospitality industry's goodwill to bounce forward into a green recovery modus but in the EU this movement will also be dictated by new regulations, which are part of the bloc's commitment within the EU Green Deal. see more

As the FT reminded us this morning A central plank of the EU's push to fund the green transition, the ESG disclosure regulations aim to clamp down on “greenwashing” by forcing asset managers to provide clear information about the sustainability of their investments.

So any hotel which is part of an asset fund will be obliged to start reporting on their environmental, social, and governance risks to their owners.

This reporting structure might not yet be bulletproof in 2021 but any hotel asset not able to at least start providing this kind of information will find itself in a tight place.

Therefore this is no longer a nice option to go for, or a visionary CEO's choice but a compliancy issue all hotels will need to be prepared for.

Comment
Suzann Heinemann
Founder and CEO of InfraCert GmbH

The hotel industry certainly has other concerns today. In many places, it is about existence and survival. The new challenges of meeting all hygiene regulations and guest wishes take up a lot of time and effort for hoteliers. It is certainly a particular challenge for hoteliers to keep an eye on sustainability issues. Nonetheless, we see many hotels making efforts to position themselves sustainably and stick to the issues. The world has changed - but travel, perhaps differently than before, will remain with us. The quality standards of travelers will continue to increase and those who improve their business processes sustainably can score points here. COVID-19 has changed the world and there will probably not be a return to the "old" normalcy. Now it is up to the people and the companies how they use the opportunity to equip themselves sustainably for the future.

Comment
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