1
Table of Contents
Executive Summary ....................................................................................................... 3
Case Abstract ................................................................................................................. 3
Company Information .................................................................................................... 3
Question 1 ..................................................................................................................... 4
Question 2 ..................................................................................................................... 4
Question 3 ..................................................................................................................... 4
Question 4 ..................................................................................................................... 5
Company Information .................................................................................................... 6
Case Questions .............................................................................................................. 9
Question 1 ..................................................................................................................... 9
Question 2 ................................................................................................................... 11
Question 3 ................................................................................................................... 13
Question 4 ................................................................................................................... 15
Abstract ......................................................................................................................... 17
Conclusion .................................................................................................................... 20
Bibliography ................................................................................................................. 22
2
Executive Summary
Case Abstract
The Carlson Company was presented with an opportunity to develop their luxury resort
brand, Regent, in the Papagayo region of Costa Rica. While researching the feasibility of the
project, it found that while Costa Rica receives three million tourists each year, up to ten percent
of them are sex tourists, causing a dilemma for the company that had signed the Code of Conduct
for the Protection of Children from Sexual Exploitation in Travel and Tourism (The Code) in
2004. While the company could implement training, monitoring, and reporting of sex trafficking
at the resort, unless there were deeper partnerships formed throughout the entire region, the root
causes of sex trafficking would remain and could cause future negative outcomes, both to their
reputation and financially.
Company Information
Founded in 1938 as a loyalty stamp program by Curt Carlson, the Carlson Company went
on to become one of the largest hospitality and travel companies in the world. The company
acquired and divested its way to success, including the purchase of T.G.I Fridays and Country
Kitchens, and their hotel brands accounted for more than 1100 hotels and 174,000 guest rooms
by 2016.1 The company decided to divest its hotel brands and sold to HNA Group for $7.3
billion but maintained its ownership of its travel agency, CWT. In addition to CWT, the
company launched a private investment firm, Carlson Private Capital Partners, to focus on
investing in family-owned and mid-level firms in the Upper Midwest and beyond.
1
(Karmin & Mattioli, 2016)
3
Question 1
When approached by Queen Silvia of Sweden to sign The Code, Marilyn Carlson Nelson
readily agreed. The company already had a relationship with the Queen and worked to establish
the World Childhood Foundation in 1999, so signing The Code was an additional step the
company could take to fight the exploitation of children. Another possible reason the company
opted to sign The Code was the enactment and reauthorization of the Trafficking Victims
Protection Act (TVPA) which in 2003, gave victims the right to file charges against companies
that did not act to prevent sex trafficking when there were signs of it happening. By dedicating to
following the criteria of The Code, the company was ensuring a wide variety of stakeholders
would be involved through training, monitoring, and reporting.
Question 2
The primary reason behind developing a luxury resort in the Papagayo Peninsula of Costa
Rica was financial. With nearly 1.2 million tourists per year in 2003 and growing, the
development was poised to be a financial success from the start. Additionally, the property
would allow the company to grow further into Latin America.
The main disadvantage of developing in Papagayo was its proximity to a vast sex
trafficking network. This proximity and their commitment to The Code could cause issues should
they not be able to gain commitment from their local employees to monitor and report. Failure to
prevent trafficking on the property could result in public censure by The Code, damage to its
reputation, and financial costs.
Question 3
4
The stakeholders involved in this potential development are vast. It includes
stockholders, potential hotel employees, victims of sex trafficking and their traffickers, sex
tourists, regular tourists, vendors and contractors, the Papagayo community, the organization
responsible for monitoring The Code, travel agencies, local law enforcement, and politicians, and
other non-governmental organizations who work in the trafficking and hospitality sectors. Each
stakeholder holds different powers and interests. The primary stakeholders, in this case, are the
stockholders, who would gain higher financial returns from the successful development; the
hotel employees, who would be tasked with the majority of the work involved in upholding The
Code at the property; and the victims of sex trafficking, who would suffer the most if the hotel
did not meet its obligations towards The Code.
Question 4
If the company decides to move forward with the development, it will not be enough to
uphold The Code’s criteria but will require greater work within the community to effectively
fight the root causes of sex trafficking in the area. The overall poverty level of the country forces
many families to enter the sex trade out of necessity. Combined with the social norms of the
country, namely prejudice against homosexuals and transsexuals, and antiquated gender roles,
many victims of the trade feel they have no other options or are vulnerable to coercion by sex
traffickers. To combat these root causes, the company would need to take additional steps to
create a support network throughout the region that includes community members, the local
government and NGOs, and other hospitality operators that are all dedicated to eradicating the
environment the breeds sex trafficking.
5
Company Information
Founded in 1938 by Curt Carlson, Carlson Company was established as a loyalty program
known as Gold Bond Stamp Company, based in Minnetonka, Minnesota. Inspired by the Leader
department store in Minneapolis, which issued coupons to its customers with each purchase that
could be traded for cash or prizes2, Curt used a $55 loan from his neighbor and his experience in
the retail food business to create the foundation of the Gold Bond Stamp Company. Curt grew
the stamp company into one of the largest loyalty programs in the country over nearly three
decades. The company reached its peak in 1953 when SUPERVALU supermarkets began using
its trading stamps, and their influence cascaded throughout the grocery industry. Consumers
earned rewards, such as dishes, cookware, and mink coats, using their stamps, and Gold Bond
Stamp Company was the largest distributor of mink coats in 1950’s America.3
The company joined the hospitality industry in 1962 when it acquired the Radisson Hotel,
located in downtown Minneapolis. It went on to open several more properties, either by
purchasing existing hotels and rebranding or through new-builds. With the diversification in its
business model, Gold Bond Stamp Company changed its name to Carlson Companies, Inc. in
19734. They expanded their Radisson hotel brand to 32 locations by 19845 and in 1986, Carlson
began a partnership with SAS International Hotels to expand the brand into the European and
Asian markets, opening its first international property in 1988 in Beke, Budapest.6
While the company was branching into the hospitality field, it also entered several other
fields, including restaurants, travel agencies, direct marketing firms, showrooms, real estate
2
(Pederson, 2007, pp. 88)
(Lagorio-Chafkin, 2019)
4
(Pederson, 2007, pp. 90)
5
(“Gene Luka Oversees the ‘Little Disruption’ at the Radisson,” 1984)
6
(“Our Company,” n.d.)
3
6
development, and others. Carlson purchased T.G.I Friday’s in 1975, growing from its 11 original
locations to 73 within the next eight years. In addition to T.G.I Friday’s, the company acquired
Country Kitchen Inc., a restaurant chain catering to families with low prices and a laid-back
atmosphere which grew to 285 locations by the early 1980s.7 They first entered the travel
agency business with its acquisition of the Ask Mr. Foster Agency in 1979, which would
eventually become the Carlson Travel Group.8
In 1983 at the age of 80, Curt Carlson appointed Edwin (Skip) Gage III as the company’s
executive vice president, from his previous position as president of Carlson Marketing Group.
Skip’s focus for the company was to focus the efforts of the company on the aspects where there
were results: the hospitality, travel, and marketing sectors. This shift in priorities also included a
focus on franchising hotels and travel agencies rather than owning them.9 In 1988, the company
underwent a reorganization and formed a parent company: Carlson Holdings Inc. The newly
formed parent company split the business into three divisions: a division to handle the family’s
investments, a division to manage their commercial real estate, and lastly, a division consisting
of Carlson Companies. A year later, the company moved into their newly built corporate
headquarters in Minnetonka, MN, and appointed Skip Gage as chief executive officer.
Gage’s tenure as CEO was short-lived; the company suffered due to the recession in the
early 1990s, and in November of 1991, Curt Carlson reassumed his post of CEO and appointed
his oldest daughter, Marilyn Carlson Nelson, as vice-chairman. Following this change, the
company experienced rapid growth in the hotel, restaurant, and travel agency sectors, and
launched its first cruise ship, the Radisson Diamond. Over the next seven years, the company
7
(Pederson, 2007, pp. 90)
(“Our Company,” n.d.)
9
(Pederson, 2007, pp. 90)
8
7
opened more than 460 restaurants throughout the world, launched an additional five cruise liners,
acquired the Regent hotel brand from Four Seasons,10 and signed a franchise agreement with
SAS International Hotels to form the Radisson SAS brand, which would later become the
Radisson Blu brand.11 Carlson Travel Group merged with Wagonlit Travel to form Carlson
Wagonlit Travel (CWT), immediately making them the second-largest agency in the world.12
In 1998, the company appointed Carlson Nelson as CEO and president, and when her
father passed away the following year, she became chairperson of the board. In the following
years, Carlson Nelson co-founded the World Childhood Foundation with Queen Silvia of
Sweden, launched the guest loyalty program Gold Points Rewards, which would later become
Club Carlson in 2012, and acquired the Park Plaza and Park Inn brands. In 2004, the company
was also the first to sign the Code of Conduct with the World Childhood Foundation.
In the following decade, the hotel division of the company slowly acquired the
controlling shares of Rezidor Hotel Company, formally known as SAS International Hotels, and
in 2012 rebranded the company as the Carlson Rezidor hotel company.13 It was also during this
time that two new CEOs and presidents were appointed; in 2008, Hubert Joly became the first
non-family member to run the company and in 2012, Trudy Rautio was elected. In 2014, the
company sold its over 930 restaurants and focused their efforts on the hospitality and travel
sectors. This move included gaining full ownership of CWT from One Equity Partners. The
following year, Rautio retired as CEO and president, and the company split the hospitality and
travel agency sectors of their business, giving each their own C-suite, which would report
10
(Pederson, 2007, pp. 93)
(“Our Company,” n.d.)
12
(Pederson, 2007, pp. 93)
13
(“Our Company,” n.d.)
11
8
directly to the board. In 2016, the company sold its hotels and brands to HNA Group and named
Kurt Ekert as president and CEO of Carlson Wagonlit Travel.
As of 2018, the Carlson Company has formed a private investment firm, Carlson Private
Capital Partners (CPC Partners). The firm appointed Andrew Cantwell as CEO and managing
partner. The purpose of the company is to use the company’s fortune and longstanding
experience to make “equity investments primarily between $20 million to $100 million to familyowned and middle-market businesses that are valued up to $500 million.”14 As of this writing,
the company has made several lucrative investments in the Upper Midwest, including Lindfast
Solutions Group, a distributor of specialty fasteners; Lakeshirts/Blue 84, a customized apparel
manufacturer; and Street Smart, a traffic-safety equipment distributor.15 They plan to continue
investing in businesses and eventually branch out of the Upper Midwest territory.16
Case Questions
Why did the Carlson Company sign the Code of Conduct for the Protection of
Children from Sexual Exploitation in Travel and Tourism? Do you agree with the
company’s decision, and why or why not?
The Carlson Company had a longstanding relationship with the royal family of Sweden,
in particular, Queen Silvia; both Queen Silvia and Carlson Nelson were interested in helping atrisk youth and had worked on several projects together, including the establishment of the World
Childhood Foundation in 1999. Because of her longstanding relationship with Queen Silvia and
her passion for the cause, Marilyn Carlson Nelson enthusiastically signed The Code of Conduct
14
(Norfleet, 2018)
(“Our portfolio,” n.d.)
16
(Norfleet, 2018)
15
9
for the Protection of Children from Sexual Exploitation in Travel and Tourism (The Code) when
asked in 2004.
Marilyn’s eagerness to sign The Code could be attributed to the enactment of the
Trafficking Victims Protection Act (TVPA) in 2000 and its subsequent reauthorization in 2003.
The original TVPA made human trafficking illegal and eliminated the element of transportation
of the victim. The reauthorization in 2003 could affect the Carlson Company’s hospitality sector
the most with the addition of the victim’s private right of action. “This means that if child sex
trafficking occurs in a hotel and the hotel should have known the act occurred, the victim is
entitled to bring a civil suit against the establishment.”17 This addition to the act places the risk
of liability on the company should a sex trafficking victim choose to file a lawsuit against the
company if they felt that the actions taking place were apparent. Due to this change, I believe it
was in the company’s best interest to sign The Code.
By signing The Code, the Carlson Company was demonstrating its commitment to
protecting victims of human trafficking, while also protecting themselves against future
litigation. The six criteria of The Code provided a solid base for the company to follow to
eliminate the risk of trafficking on their properties. These criteria include:
1) establishing a corporate policy and operating procedures to combat the exploitation of
children
2) training employees on the prevention of sex trafficking and how to spot and report
potential cases
3) including a clause in their contracts with vendors stating their zero-tolerance policy
17
(George & Smith, 2014, pp.91)
10
4) providing information to travelers on the facts of human trafficking and what they can do
to help
5) engaging stakeholders and encouraging collaboration in the fight against human
trafficking
6) reporting their progress to the organization annually18
By placing the responsibility on a myriad of stakeholders, including hotel employees, guests, and
vendors, the company can cast a wider net to afford protections to people who fall victim to
human trafficking.
What are the advantages and disadvantages to the Carlson Company developing
the hotel complex in Costa Rica?
The primary advantage for the company expanding into the Papagayo market is financial.
By 2003, Costa Rica was host to over 1.2 million tourists per year19 and the number climbed to
nearly 3 million by 2017 generating almost $3.9 million.20 Opening a luxury resort on the
Papagayo Peninsula would allow the company to enter the high-end market in Costa Rica and
expand its footprint into Central America.
The company also considered the opportunity to serve as a role model for new and
existing properties within the country. By dedicating themselves, their employees, and their
vendors towards eliminating sex trafficking in a region plagued by the problem, it could
demonstrate that it could be done while still maintaining profitability and reputation. The
company hoped that by serving as a role model to others, the employees of their resort would act
as agents of change throughout their communities as well.
18
(“About,” 2019)
(“Tourism in Costa Rica,” 2020)
20
(World Tourism Organization, 2018, pp.17)
19
11
Another advantage for the company would be the publicity it would receive for
developing a property in an area of the world that struggles with sex trafficking and committing
to fighting it from within the country. Similar to signing The Code, which multiple executives
initially saw as a disadvantage for the company, once signed the positive recognition from the
media was a win for the company. The positive attention received from the media likely attracted
more consumers who wanted to spend their money with the company that shared their values,
furthering the company’s financial gains.
A disadvantage to developing the Papagayo property would be the fallout that occurs
should the company fail to uphold The Code. This fallout would affect both financials and
reputation of the company. The 2002 Marriott incident and the repercussions of its litigation
were fresh on the minds of the Carlson executives, who did not want to find themselves in a
similar situation. Failing to uphold The Code would result in a public censure of the company, as
well as negative media coverage should there be a similar event. In addition to any actions
brought against Carlson Company by The Code’s organization, the victim of the crime could
also file charges against the company for failure to act.
Another challenge for the company would be ensuring its franchising company for the
development was properly fulfilling the obligations of The Code. The additional training and
task of monitoring the property for potential issues is an extra cost that some franchise owners
may not be willing to bear, along with the additional responsibilities.
Finally, the development may be associated with sex trafficking due to its location alone.
An estimated ten percent of tourists that visit Costa Rica are there specifically for the sex trade,21
21
(Schmidt, 2007)
12
so by opening another property in the region, tourists may view the company as tolerant of the
practice.
What stakeholders would be affected by a decision to develop the hotel complex
in Costa Rica, and how would they be affected? What are their interests and
sources of power in this situation?
Stakeholders in this scenario include stockholders for Carlson Company, the potential
hotel employees, potential victims of sex trafficking and their traffickers, sex tourists, regular
tourists, vendors and contractors, the Papagayo community, the organization responsible for
monitoring The Code, travel agencies, local law enforcement, politicians, and other nongovernmental organizations who work in the trafficking and hospitality sectors.
Stakeholder sources of power are voting power, economic power, political power, legal
power, and informational power. The stockholders of the Carlson Company will have voting
power; for instance, if the CEO makes the decision to open the hotel but does not take
precautions to follow the requirements of The Code resulting in public sanctions and bad press,
the stockholders can vote to remove the CEO. Their interests include a return on their investment
and higher stock values.
Hotel employees, sex tourists, regular tourists, travel agencies, and vendors, and
contractors all hold economic power; however, their interests will vary. Hotel employees’
interests include a safe, stable work environment, free of danger while receiving acceptable
levels of pay and benefits. Their economic power comes from their ability to withhold work
through strikes, and the ability to form a union to make demands for better treatment. Sex
tourists’ interests are in their illegal desire to participate in sex trafficking and their economic
power arises from the money they are willing to pay to the property for their accommodations, as
13
well as their referral power to others in the sex trade business. Regular tourists’ interests are to
receive value for the money they are spending at a high-quality resort that is safe to visit. They
also want to be able to voice their concerns without fear of repercussion and receive accurate
information before booking and during their stay. Their economic power stems from their
willingness to book the resort and should the resort become a destination for sex tourism, they
can withhold their money through a boycott. These same interests can be applied to travel
agencies. Suppliers’ interests are to receive regular orders and to receive payment for their goods
and services on time. Their economic power stems from their ability to withhold orders from the
hotel or choosing to supply to a competing property that upholds their values.
The government of Costa Rica and the Papagayo region, including politicians and law
enforcement, as well as the Papagayo community and non-governmental organizations hold
political power. Their interests vary; the government and law enforcement’s main interest should
be to uphold the law criminalizing sex trafficking, however, due to the massive income brought
in by the tourism industry, the practice was often overlooked and it was not until 2009 that the
country would make trafficking illegal.22 Their political powers stem from their ability and
willingness to pass legislation to punish sex traffickers and tourists, as well as their willingness
to investigate these crimes. The Papagayo community’s interests are to have companies willing
to employ members of the community and to develop the economy; their political power rests in
their ability to vote for politicians who uphold their beliefs and work to protect their community.
Non-governmental organizations' interests include the protection of children and other
trafficking victims, the government’s response to the issue, and growing the tourism industry in a
22
(Linde & Eisenbeis, 2011)
14
way that is beneficial for all. Their political power stems from their ability to lobby for change
and back political candidates that uphold their values.
Legal power and informational power is held by a multitude of stakeholders previously
discussed. Employees can file suits against the company for failing to act to prevent sex
trafficking and the resulting emotional damage. The victims of sex trafficking can file suits
against the hotel under the 2003 reauthorization of TVPRA.23 Hotel guests, NGOs, travel
agencies, and hotel employees hold informational power; any of these stakeholders can use their
voice to either uplift the company for upholding the criteria of The Code and doing their part to
fight sex trafficking, or they can use it to expose the lack of effort or work the company is doing.
If the Carlson Company decides to proceed with the hotel development, what
steps can it take to assure that the company remains in compliance with The
Code of conduct it has signed?
If the Carlson Company decides to proceed with the development of the Papagayo
property, there are several steps it can take to ensure it remains in compliance with The Code. To
start, the company should ensure they are complying with the criteria set forth by The Code. The
company started by creating a corporate policy to remove the threat of association with human
trafficking. The company then undertook a massive training program for its employees to teach
them what to look for and how to respond to possible cases of sex trafficking. Examples of signs
of possible sex trafficking victims are transactions that are paid in cash, long-term stays that
insist on skipping housekeeping service, guests who are dressed inappropriately for the weather
or who do not seem to know where they are, and signs of coercion or controlling behaviors.24
There are clear examples of employee training being a powerful tool in the fight against sex
23
24
(George & Smith, 2014, pp. 91)
(Coughlan, 2019)
15
trafficking. One such example is the capture of Samuel Cozart with a 17-year-old victim at the
Days Inn of Roseville, MN. A manager at the hotel saw warning signs of abuse, searched for
Cozart’s name on the internet, and found a connection between Cozart and an escort service
listed on backpage.com. The manager called law enforcement and they arrested Cozart, who was
later sentenced to 21 years in prison for his crime.25
Another important action the company can take to maintain compliance with The Code is
to collaborate with their stakeholders. In addition to training its employees, the company can
work with its contractors and vendors to ensure their employees receive training on the signs of
sex trafficking as well. It can join forces with non-governmental organizations to create a
network of support for their employees and to ensure they are receiving the most up-to-date
information to combat the sex trade. Perhaps most importantly would be collaborating with other
hotels and hotel operators in the region. By collaborating with other properties, the community of
hotels would be creating an even larger protective network for those who are susceptible to being
trafficked. This also creates additional pressure on other companies who develop in the region to
join the network and works to prevent hotels from opening that would cater to the sex-tourism
market.
Finally, educating guests on the signs of sex trafficking and the effects of the trade on the
victims and the community is an additional measure that can be taken by the company to ensure
compliance. Research shows that guests want to know what steps businesses are taking to
combat human trafficking and use the power of their wallets to reward businesses that are doing
their part, and conversely, withholding business from those that are not. For example,
25
(Carlson, 2012)
16
One study conducted by World Vision’s Child Safe Tourism arm found that, when asked
whether a business’s policy to protect children would influence their purchase habits,
94.8 percent of participants said it would. In a similar vein, 84.8 percent of survey
participants stated that they would like to know more about how to protect children and
prevent exploitation.26
Consumers no longer want to be complicit bystanders to human trafficking and would rather
direct their dollars towards companies that are working to protect and deter the practice.
Abstract
The Carlson Company was presented with an opportunity to develop a luxury resort in
the Papagayo region of Costa Rica, however, in the course of their research, it was found that the
region is a hotbed for sex trafficking. This could cause issues with future development, as it
could be a conflict of interest since they signed The Code of Conduct for the Protection of
Children from Sexual Exploitation in Travel and Tourism in 2004. The company needs to
consider the implications of moving forward with the development, both financially and in
regards to its reputation while maintaining their commitment to The Code.
Prostitution in many forms has been around for centuries; however, the trafficking
industry has become a multi-billion-dollar industry where approximately 2 million children have
been trafficked annually.27 Traffickers use the travel industry to facilitate the movement of their
victims, and rather than ignoring the problem or pretending it does not exist, companies are now
taking measures to deter the use of their services in the industry. One way of facilitating this
change was to sign The Code. This shift in dynamic did not happen overnight and many
prominent travel companies were hesitant to sign The Code due to the many implications that
26
27
(Sarkisian, 2015, pp. 9)
(Linde & Eisenbeis, 2011)
17
could arise, so Carlson Company was the first North American hotel and travel company to
sign.28 Fortunately, there are now 381 member companies spanning 165 countries that have
signed The Code, including Hilton, IHG, Marriott, and Hyatt Hotels.29
One of the issues with potential development was its location and its proximity to one of
the most widely visited countries known for human trafficking. Of the 3 million tourists who
visit Costa Rica each year, an estimated ten percent are sex tourists.30 Since the company had
signed The Code several years earlier, the proximity to this prolific issue was problematic.
Should the company open the resort, it would need to heavily monitor its operations to ensure
The Code was being upheld. Should the resort not follow the guidelines, the company risks being
censured by The Code’s organization, the victim of trafficking could bring legal action against
the company, and the reputation of the Carlson Company would be damaged.
To monitor the operations of the hotel to ensure it was not used as a location for human
trafficking, the company would need to establish buy-in from its employees at the property. This
presents another issue, as the employees would be members of the community surrounding the
hotel. Since many of the citizens depend on income from the travel and tourism industries, they
are less likely to report incidents of trafficking.
There are many reasons why the employees would be hesitant to monitor and report
incidents of human trafficking. Research also shows that while hotels and restaurants are
developed in poverty-stricken areas of the country, the average citizen in the area does not see a
boost in income, but rather many lose their standard means of income from farming or fishing
and are forced to accept lower-paying jobs in the tourism industry. This income inequality
28
(Linde & Eisenbeis, 2011)
(“Members of The Code,” 2020)
30
(Schmidt, 2007)
29
18
between the citizens of Costa Rica in these areas and tourists leads to the exploitation of children
in the sex industry. Many sex tourists are willing to pay cash or exchange goods and for those
with few means, this becomes one of the few ways to survive.31
The social norms of the country also prove to be difficult to overcome and could cause a
conflict of interest for the employees of the hotel responsible for monitoring and reporting.
Gender norms and homophobia are two such examples. Males are considered superior to
females, who are thought to be “passive objects of male sexual desire”32 so even if a female
victim were to come forward for help, especially a minor, they could be considered as complicit
to the crime, rather than a victim. As homophobia and transphobia are prevalent throughout the
country, many children are rejected by their families and find themselves homeless. Here, they
find themselves vulnerable to exploitation by human traffickers and tourists.
For the Carlson Company to generate buy-in from its employees, the company will need
to create outreach with a variety of its stakeholders. When developing the hotel, they should
work with the families in the area to ensure their current sources of income are protected; this
could be done by minimizing the footprint of the hotel to maintain local farming land or fisheries
or creating a supply chain with the locals rather than outsourcing the food.
For those community members who work in the tourism industry, the company will need
to pay decent living wages so the families can rely on their income rather than needing to turn to
sex tourism to survive. It would also be beneficial to create a network with other hotels and tour
operators in the region that are willing to adopt similar policies, so employees will know that the
same standards would be expected elsewhere.
31
32
(Hawke & Raphael, 2016, pp. 31)
(Hawke & Raphael, 2016, pp. 31)
19
Additionally, the company should collaborate with local NGOs and government officials
to create resources and work within the community to fight the root causes of sex trafficking.
This could include outreach to vulnerable LGBTQIA youth who find themselves on the street, as
well as educating the citizens of the community on the causes and effects of human trafficking.
NGOs can use their influence to work for increased portions of the government’s budget to
combat human trafficking and help the country’s politicians and law enforcement create
programs to effectively investigate and prosecute perpetrators.
By using some of these recommendations, the Carlson Company would be going beyond
the requirements of The Code. However, given the environment it plans to enter, more work
would need to be done to truly combat the root causes of sex trafficking. By integrating itself
into the community, it would incentivize its employees to actively fight the sex trafficking
problem rather than be passive onlookers, or worse, active participants.
Conclusion
The Carlson Company’s groundbreaking signature of The Code paved the way for
several other hospitality companies to take a stand against sex trafficking within the industry;
however, this alone is not enough for the industry to fight the issue. While signing The Code and
adhering to the criteria will prevent some instances of trafficking, it is going to take systemic
changes in the communities where these companies operate to win the battle.
Companies will need to integrate themselves into the communities most affected by the
sex trade industry and partner with politicians, law enforcement, and non-governmental
organizations working to fight human trafficking. Companies will also need to ensure they are
paying their employees a decent living wage to help prevent poverty-stricken families from
falling prey to sex traffickers. These actions may be unfeasible for smaller hotel companies due
20
to the financial costs of wages and maintaining partnerships, however, many smaller hotel
companies have realized that without merging with a larger hotel company, it will be unable to
compete in the global marketplace.
This knowledge spurred the Carlson Company to sell their hotels division to Chinese
conglomerate, HNA Tourism Co. in April of 2016 for $7.3 billion.33 While the company’s hotel
brands were profitable, it was clear that owners were more willing to invest with companies with
bigger name recognition and a variety of brands to compete in various market segments.34
Owners know that if they invest in a Courtyard by Marriott hotel, the Marriott customer base will
be larger than that of a Country Inn & Suites. By selling its hotel business, but maintaining their
travel agency, CWT, the company can still uphold the criteria of The Code without the risks
involved in operating a hotel.
33
34
(Halter, 2016)
(Cox, 2016)
21
References
(18) About. (2019). Retrieved from The Code website: http://www.thecode.org/about/
(25) Carlson, S. (2012, June 6). Man sentenced 21 years in prostitution of girl at roseville hotel.
Retrieved from Patch website: https://patch.com/minnesota/roseville/man-sentenced-21years-in-prostitution-of-girl-in-roseville
(24) Coughlan, S. (2019, February 13). Hotels train staff to spot human trafficking. BBC News.
Retrieved from https://www.bbc.com/news/business-47201210
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