Sustainability Leadership

The Strategic Imperative of Recognized Leadership in the Travel and Tourism Industry

The need for leadership in the travel and tourism industry has never been more critical. As a society and industry, we are grappling with large scale global and regional challenges – climate change, over-crowding at tourism sites and the resulting strain on infrastructure and social and economic inequality in many destinations – that require a new type of leadership from truly progressive entities.

Most governments appear unwilling or unable to lead, especially National Tourism Organisations (NTOs) needing to follow agendas dictated by national governments. Civil society, while highly engaged on sustainability issues, typically does not have the scale or infrastructure to deliver the required change. And multilateral associations, including the UNWTO, seem to be beholden to the political whims of national members.
Despite low levels of consumer trust, all arrows point to more committed and effective leadership by travel and tourism businesses as one of the key engines to drive more sustainable and prosperous destinations. This is in the self-interest of global travel and tourism companies as well – a global company can’t be successful and profitable in a chaotic world.
The return on investment of progressive corporate leadership has, in many cases, been underwhelming.

Despite the promise of strong social and environmental performance to drive business value, i.e., enhanced reputation and brand equity, stronger policy influence, deeper travel consumer and shareholder loyalty, increased market share, and greater talent attraction/retention – all too often there have been obstacles between a travel and tourism company’s commitments and the promised benefits.

Twenty31 Consulting recognises that one of the fundamental obstacles to creating more value for the enterprise from its sustainability and CSR strategy is the limited understanding and appreciation a company’s customers (i.e., travel consumers) and stakeholders have of these commitments. Without stronger engagement and recognition of a company’s commitments, business value remains limited. The solution can be found in building and nurturing the concept of recognized leadership, pioneered by global reputation and sustainability experts, GlobeScan.

Why recognized leadership in the travel and tourism industry? It can be argued that the only type of leadership that is enduring and can stimulate positive change is one that is recognized. Recognized leadership delivers value to the business in multiple forms: it inspires industry stakeholders; it creates virtuous competition among competitors, and it turns trust deficits into surpluses – which in turn drive business from high-value travel consumers.
The simple but potent insight here is that in order to accrue the benefits of enlightened commitments, travel consumers, travel trade and industry stakeholders need to understand what you stand for as a business and how you are executing on your corporate purpose. Collectively and in general, travel and tourism companies have done a poor job engaging with their Recognised Leadershipemployees, travel consumers, suppliers, communities, investors and NGO partners in this area around a shared vision and benefits. This goes well beyond marketing and communications and way past PR (where unfortunately many travel and tourism CSR and sustainability programmes reside).

Recognized travel and tourism leadership requires the thoughtful alignment of a number of moving parts that includes strategic vision, integrated performance and communications/engagement. A PR or branding campaign is insufficient to deliver recognized leadership without it being tied deeply into business performance. Sustainability and CSR initiatives must be credible and measurable. Similarly, strong vision and performance is an insufficient approach if it lacks a way to connect with travel consumers, travel trade and stakeholders more deeply.

According to our research, travel and tourism companies such as Jetwing Hotels, Intrepid Travel, Soneva Resorts, and Taj Hotels Resorts and Palaces have taken a more holistic approach to vision, performance and engagement and are driving the agenda and increasing business value.

Our approach is to build recognized leadership strategies based upon a clear assessment of the business context and through primary research and internal and external stakeholder engagement. The challenge is to develop an integrated strategy that manages risks, optimizes opportunities and community contribution, as well as best captures the imaginations of travel consumers, travel trade and broader stakeholders – all this in ways that build positive recognition for the company, which closes the loop on business value and in turn leads to greater social impact as the company derives greater economic and social benefits.
The world is on the cusp of a new era of corporate engagement that will fulfil many of the promises of the business case for corporate sustainability. We have a better understanding of the challenges we face and the actions required to secure a better world. Recognized leadership can help progressive travel and tourism companies mobilize their capabilities for a brighter and more sustainable future. The Pacific Asia Travel Association (PATA) can also play a role given their unique role facilitating engagement between business and government.

Embracing sustainability for competitive advantage.

Travel and tourism is inherently a human resources intensive business - hotels need staff to manage and cater to guests’ discrete needs, tour operators need guides and drivers to shuttle and chaperone travellers, airlines need pilots, flight attendants, ground staff and customer service reps. Yet the industry for decades has relied on cheap labour and focused limited resources in effective training and adequate retention. The industry can also be immensely destructive to natural environments whether it is mega cruise ships docking in pristine coastal environments, the extreme use of precious water resources in hotel operations or the overcrowding of UNESCO World Heritage Sites.

Increasingly, traveller expectations are rising for travel and tourism businesses to find ways to secure, replenish, and restore natural and social capital wherever they operate, and act in a more sustainable fashion. Travellers have begun to question how their dollars are being distributed to local communities, the effect of their presence in natural environments and whether fair wages are paid to hotel, tour operator and attraction staff. Some in the industry have noted and have put in place new policies and pushed for a change in practices.  Hotels encourage guests to reuse towels and turn off lights and many tour operators offer optional donations to carbon offset programs and local charitable foundations.  Largely speaking though, these efforts are limited in scope, not independently verified to measure impact and are not integrated within the total business.  On the government side, limited regulations and lax enforcement have led many non-governmental organisations and industry observers to label the travel and tourism industry’s sustainability efforts as ‘green washing’.

Exceptions do exist – there are a number of leaders who have embraced sustainability as a core tenant for their business and/or destination. These organisations and destinations deeply understand the role of travel and tourism in economic development and the importance of shared value. Sustainability, sustainable development, corporate social responsibility, philanthropy – there are many labels to describe business’ and governments’ role in society.

Organisations need to build the business case for sustainability, define how to integrate corporate social responsibility positioning within their brand framework and better define their communications to target aspirational travellers. Fundamentally, sustainability is about innovation and transformation. Those tourism organisations that embrace this transformation will in turn will lead the markets and create durable value for all society.