Sustainability: A Game Changer for the Hospitality and Tourism Sector

The Next Megatrend: Sustainability as a Game Changer for the Hospitality and Tourism Sector was the theme of the 2011 Barbados Hotel and Tourism Association‘s Annual General Meeting lunch held at the Hilton Barbados on June 8. The AGM lunch keynote address was given by Jacqueline Kuehnel of JK Consulting Enterprises from Toronto, Canada. Ms. Kuehnel ‘s presentation drew from a wide range of business management literature as well as hospitality and tourism trend studies that see sustainability strategy as an essential part of business competitiveness and long-term survival.

A 2010 article from the Harvard Business Review titled The Sustainability Imperative, written by D. Lubin and D. Esty, proposes that learning from two previous megatrends, the Quality Movement (QM) of the 1970’s and 1980’s and  Information Technology (IT) of the 1980’s and 1990’s,  provide insights as to the importance of adopting  sustainability as a core business strategy. Whilst the QM and IT movements could be somehow “fenced” within an organization’s boundaries, sustainability’s complex and overarching issues encompassing energy, water, waste, community, biodiversity and economic shared value, need an unprecedented degree of collaboration, partnerships and stakeholder engagement from the demand side, the supply chain and government.  Sustainability requires that businesses formulate a vision and execute a strategy at the same time. The problem is that defining a vision of how the organization will be positioned within a world with scarcer resources, high energy costs, diminishing waste sinking capacity and a disrupted climate, presents a serious challenge to senior management.

As a resource intensive sector with a global reach, the hospitality industry is particularly vulnerable. The Deloitte report, Hospitality 2015 Game Changers or Spectators addresses trends such as emerging markets, demographic drivers, technology, human capital, brand differentiation, disaster preparedness and sustainability.  It suggests however, that of all the trends, sustainability needs to take a “360 degree view”, thus supporting the argument that without a foundation from which the business supports its environmental, social and economic pillars, all the other dimensions will ultimately be rendered irrelevant.  Deloitte’s findings indicate that sustainability is increasingly seen as a prominent factor in business decision making, but is not yet fully embedded in strategic thinking; hospitality is asset-heavy with a large environmental footprint and the key challenge will be the cost and disruption caused by the adaptation and retrofitting of existing properties; regulatory, economic and stakeholder pressure (consumers, source markets’ regulation, suppliers, employees, NGO’s) will drive sustainability; market place awareness of environmental sustainability is growing,  albeit they admit that the consumer is still biased towards price and location, but becoming more demanding on the delivery of  higher environmental and social standards.  The Barbados hotel infrastructure faces many of these challenges in the mid to long-term and a collaborative model to leverage economies of scale will yield solutions which will benefit the whole tourism sector.

Future trends on tourism were addressed in the context of research done by Forum for the Future, a UK based NGO, who in conjunction with the UK travel private sector and the Travel Foundation, created a Tourism 2023 outbound travel report which was the outcome of over one hundred stakeholder interviews. The four future scenarios for tourism included a world with the economic means to travel thus increasing growth pressure on destinations; tourism operating in an unstable and disruptive environment plagued by extreme natural events and security threats; international tourism becoming so expensive that only a small percentage of the population can afford it; a carbon constrained world which drives travellers closer to home while also demanding higher ethical standards from the tourism operators. Technology, changing consumer behaviour, natural disasters altering landscapes and many other factors can transform these scenarios. However, the three urgent priorities which were generated from this report address key issues related to: sustainable destinations in as far as the economic and social value of tourism is increased; low carbon innovation to increase energy efficiency, minimize waste and save water;  increase consumer awareness and drive demand towards responsible tourism.   Barbados is challenged by many of these scenarios and must partner with the private and public sector to find ways to mitigate and adapt to a rapidly changing world.

As we move towards creating a sustainability vision, businesses continue to learn and develop frameworks that provide more clarity on how to best implement it. In the 2009 book by Dr. Bob Willard, The Sustainability Champion’s Guidebook, How to Transform Your Company, a seven step sustainable process provides a dynamic change management continuum. The seven steps include: wake up and decide; inspire a shared vision(s); assess your current realities; develop strategies; build a case for change; mobilize for commitment; embed and align.  Dr. Willard states that the method is not linear and sequential, and a missed or rushed step may derail the whole implementation process.

The May 28, 2011 issue of the Economist, headlines the entrance into what is being called the Anthropocene geological age, an era defined as the “recent age of man”.    Man has changed the earth in ways that has altered the way it functions geologically (gigatons of sediment displacement, disruption of the carbon and nitrogen cycle and more).  Technology and ingenuity will provide some of the solutions,   but fundamental changes will be needed in man’s perception of the future.  Does business have a role to play in this process?  The management guru, Michael Porter in his 2010 Harvard Business Review article, Creating Shared Value says: “capitalism is an unparalleled vehicle for meeting human needs, improving efficiency, creating jobs and building wealth, but the capitalist system is under siege. Business is being viewed as a major cause of social, environmental and economic problems.  Even worse, the more business engages in corporate responsibility, the more it is blamed for societies’ failures.  The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing it needs and challenges.  Shared value is not about social responsibility, philanthropy or even sustainability, it is a new way to achieve economic success. We believe that it can give rise to the next major transformation of business thinking.”

The question we need to ask ourselves as a high impact business sector is what “societal shared value” do we need to create for tourism? Could we work from the premise that if the fundamental value is to always deliver an authentic tourism experience for everyone (tourists and locals) that we have achieved a genuine and long-term benefit in the tourism value chain?

Perhaps the answer lies in the change management process itself, when we recognize that the gulf between step one of “wake up and decide” and step seven of “embed and align” can only be bridged by the collective, albeit fragmented, will of the private and public travel and tourism sector.
Jacqueline Kuehnel is Managing Director at JK Consulting and Enterprise where she consults on climate change, corporate social responsibility and sustainable business strategy to a wide range of companies in and outside of the travel and tourism sector.