2011 Cambridge Business & Economics Conference ISBN : 9780974211428 Assessing Sustainability in the Travel Trade Industry Britt Ventriglia1 and Ruth Rios-Morales2 ABSTRACT The purpose of this study is to evaluate how sustainability is currently being understood and to what extent it’s perception is affecting implementation decisions within the travel trade industry. In pursuit, this study first explores the perception of sustainability within the hospitality industry in correlation with other industries, then goes on to asses the reasons behind implementation and their relation to the potential benefits among pioneering hotels, while providing a comprehensive look into the current challenges of implementation along all industries. The survey method of research is used in this study. The study uses triangulation in assessment, incorporating both quantitative and qualitative data collected. The experimental data provided better information and conclusively demonstrates a relationship between variables or segments samples in the population. In light of our assessment it has been found there are some travel trade organizations which are taking sustainability seriously and have emerged at early adaptors and implementers’ of sustainability, however, conclusions support the idea of sustainably as a preventive innovation, and introduce the preventative cycle. Keywords: Travel Trade Industry, Sustainability, Social Corporate Responsibility Contact Details: 1 Britt Ventriglia (MBA), Marriott International Headquarters, Bethesda Maryland. U.S.A. Tel. 001 805 268 1007 Email. bventriglia@gmail.com Ruth Rios-Morales (PhD), Les Roche-Gruyere, University of Applied Sciences Switzerland, Rue de l’Ondine 20, CH 1630 Bulle, Switzerland. Tel. 00 41 26 919 7827, Fax 00 41 26 919 7879 e-mail: ruth.riosmorales@glion.edu 2 June 27-28, 2011 Cambridge, UK 1 2011 Cambridge Business & Economics Conference ISBN : 9780974211428 1. Introduction Sustainability is a widely accepted concept in the world of business and it is becoming one of the most common axioms used in the field of the travel trade industry. The travel trade industry, including the hospitality and tourism sector, represents an important economic contribution to world’s GDP (UNCTAD, 2007) and it is one of the main sources of income for many countries (UNWTO, 2009). The purpose of this study is to discover how the concept of sustainability is currently understood and to what extent the perception is affecting the decisions for implementation within travel trade industry in correlation with other industries. This study also aims at assessing the reasons behind implementation, the potential benefits among pioneering hotels, and reviews the current challenges of implementation. The survey method of research is used in this study; primary data is collected through questionnaires. The study uses triangulation, incorporating both quantitative and qualitative experimental data collected, to provide better information and conclusively demonstrate relations between variables or segments samples of the population. In light of our assessment it has been found that some large travel trade organizations are taking sustainability seriously in matters of concept and action. However, ultimately the reasons organizations are implementing sustainability; do not show a strong relationship to the benefits currently being received, causing some early adaptors of to struggle with sustainability as a preventive innovation. This study provides recommendations for further research in benchmarking, and also introduces the preventative cycle as a way to describe and visualized the current state of sustainability among all industries surveyed in this research. The remainder of this paper is organized as follows: the next section we review related literature associated to the topic of sustainability. Section 3 present the methodology used in this study. Section 4 discusses the key results of the paper. In section 5 we discuss implications and make recommendations. The last section presents the conclusions of this study. June 27-28, 2011 Cambridge, UK 2 2011 Cambridge Business & Economics Conference ISBN : 9780974211428 2. Conceptual Background and Related Literature In the last century, the travel trade industry has become one of the fastest growing economic sectors in the world, both in developed and developing countries (Butcher, 2003; UNWTO, 2009). It is estimated that the industry currently provides 1 in every 12.3 jobs (WTTC and Oxford Economics, 2010), from which 806 million corresponds to travelers abroad (UNWTO, 2009), and generates an economic impact reaching close to US$ 1,600 billion worldwide (WTTC, 2009). The travel trade industry is a vast and complex system composed of interrelated and inter-dependent individual businesses, organizations and services; where in hotels though accommodation, constitutes one of the main ever expanding pillars of the entire industry (Bohdanowic , 2009; Rowe et al., 2002; Solnet et al, 2010). In the future, hospitality and tourism is expected to take a leading and dynamic role in global economic growth, with all figures expected to rise, if not double by 2020 (WTTC, 2009). Scholarly research concerning the positive and negative impacts of the travel trade industry in the environment, cultural society, and economy is large. Most current published academic literature found concerning the impact of tourism uses a cautionary platform, where the negative environmental impacts and the impact on the local community and destinations are described (Bohdanowicz & Zientara, 2009; Kamm, 2009; Moscardo, 2009). In addition, there is a growing body of academic studies providing words of caution, suggesting that the travel trade industry can have highly negative environmental and cultural impacts if it is not responsibly managed and monitored (Sauvé, 1996; Bohdanowicz et al., 2004; UNESCO, 2005; Buckley, 2009; Butcher, 2003; Mowforth et al., 2008; Peeters et al., 2009; Lane, 2009; UNWTO, 2009; Weaver, 2009). June 27-28, 2011 Cambridge, UK 3 2011 Cambridge Business & Economics Conference ISBN : 9780974211428 Businesses from other industries are also under extreme pressure from governments and special interest groups and are probed as to their social responsible impacts. Corporate Social Responsibility (CSR) programs have been common practice for quite some time (Kotler & Lee, 2005); however, due to scandals for companies like Enron, WorldCom, and India’s recent Satyam Computer Services scandal being labeled as "India's Enron" by Forbes (Mohan, 2009) and “India's Madoff” by Business Week (Kripalani, 2009), much more information is demanded form consumers and governments as to corporate responsibility and ethical practices thorough transparency. At present, major trans-national and national corporations must implement specially programs to improve their social and environmental activities in order to survive and remain competitive (Mowforth et al., 2008; Bohdanowicz & Zientara, 2009). In addition, it has become standard practice today to provide a statement of ethical standards, sustainable energy efforts and other charity or foundation program involvement via corporate websites or annual reports (Banerjee, 2006; Murphy, 2009). Large companies have also sought to identify themselves with the environmental and cultural preservation groups (Butcher, 2003); using marketing techniques and principles to encourage behavioral change or advance a social cause has been linked to sustainability (Kotler & Lee, 2005; Lane, 2009; Weaver, 2009). Since social marketing aims at influencing a large audiences to voluntarily accept new or reject old behaviors for the great good (Peeters, Gossling, & Lane, 2009), organizations and marketers are charged with a massive task, especially in hospitality and tourism industry where there are powerful and emotional issues of pleasure, freedom and status involved in the decision process (Lane, 2009; Williams, 2002). Jim Bucher (2003), writes how powerful the elements of adventure, escape, and goodold fashion fun are in motivation, an area not commonly explored by academics’, however, extremely influential to travel consumer choices. June 27-28, 2011 Cambridge, UK 4 2011 Cambridge Business & Economics Conference ISBN : 9780974211428 Tourism industry associations and government agencies have attempted to recognize and reward good practices and performance through a charity of awards, eco-labels, and sustainable certification programs (Buckley, 2009; Hartlieb & Jones, 2009). However, other findings indicate these changes are not, or have yet to, translating into real bottom line results (Johnson, 2009), and that many hospitality businesses who are still in the process of discovering sustainability, tend to be either hesitant or unsuccessful in implementation (Bohdanowicz, 2003; Sammer & Wüstenhagen, 2005; Bohdanowicz, 2009; Gill & Dickinson, 2008). The few successful leaders in sustainable hospitality and tourism area are currently dominated by independent and non-affiliated hotels (Johnson, 2009), typically small and medium sized organizations (Weaver, 2009; Leslie, 2009). Though, it has been argued that in the recent years, large scale hotel companies have made a considerable effort to improve the quality of life in local communities and the well-being of their employees, studies have concluded that international hotel companies are an essential element in the development of host communities (Bohdanowicz & Zientara, 2009; Tzschentke et al., 2004), though academic research collected as to their results or challenges is still being built. Hall and Gossling (2009), have mapped the progression of sustainability in the tourism and hospitality industry, describing a preventive innovation, which have been found to diffuse rather slowly, in part due to delayed rewards from implementation (Rogers, 2002), and also due to the significant link between consumers and producer of the tourism experience (Hall & Gossling, Global Environmental Change and Tourism Enterprise, 2009), assuming that the social environment of the travel trade industry is potentially affected by the perception and expectations of consumers. June 27-28, 2011 Cambridge, UK 5 2011 Cambridge Business & Economics Conference ISBN : 9780974211428 3. Methodology Framework and Data This research is essentially based on primary data collected through questionnaires. Random sampling technique was used to gather an estimated representative of the entire population. A sample estimate consisting of 250 total qualified candidates (working in top managerial positions) with an equal distribution between segments was reachable in the time frame of this study. The sampling techniques were based on the following specifics: industry of employment, level of expertise, and decision making abilities. Research aimed on gathering a representative sample of experienced hospitality professionals and professionals among other industries. The questionnaire encompassed 19 multiple-choice, rank, and likert-scale questions including an open-ended question for further information or explanation. The completed questionnaires from the surveyed reflected a 31.2% population response rate; providing a sample size of 78 participants. The age range differs among segments, finding the hospitality participants older in years than the participants from other industries. However, as you will see in the segment descriptions, the this could be due to hospitality segment candidate guidelines where participants in this segment had to be of management position or higher to qualify for the study, and this average age (40.5) relative, is at least relative to the U.S. average age for management professionals (U.S. Bureau of Labor Statistics, 2009). Although noteworthy, this research study will not explore this possible relationship, as age is not a factor in this research analysis nor the gender, however; these information can be useful in the interpretation of our findings. Size of the business was taken into account and recorded due to historical research which indicates that the number of employees or size of the business can inadvertently affect reasons behind implementation (Knight & Cavusgil, 2006) and is often indicated as a challenge in implementing new innovation or ideas (Tushman & Anderson, 2004). June 27-28, 2011 Cambridge, UK 6 2011 Cambridge Business & Economics Conference ISBN : 9780974211428 4. Results and Discussion Our findings have been compiled and compared by segments. The understanding, awareness, and perceptions of management has been linked to change or implementation of new innovations (Sutton, 2001; Knight & Cavusgil, 2006). Therefore, the focus is on a cross section of findings of questions from areas of: general understanding of sustainability; the attraction and benefits of sustainability; implementation difficulties (open-ended); and general reasons for implementation. 4.1. Understanding Sustainability Results from the first series of questions followed a general theme associated with the meaning and use of sustainability. When participants’ were asked to rate their understanding of the term sustainability using a scale of one (1) to five (5); where the low level one (1) indicated they were unfamiliar with the term and the high score of five (5) indicated expert knowledge. The total sample showed very little variance in degree of understanding, as the mean score 3.55, indicating an overall ‘general’ to ‘detailed’ understanding of the term. The qualitative data for the total sample is visualized below in Figure 4.1. As we can observe, out of the 78 participants, not one was unfamiliar with the term, and 11 felt they had expert knowledge, although ‘general’ understanding received the highest frequency. Further results obtained from questions on sustainability revealed only 71% of the participants currently use, and are exposed to sustainable initiatives in the work place. Results filtered by segment showed that 85% of the hospitality organizations surveyed has implemented sustainable practices in their place of business; compared to only 57% of the other industries. Figure 4.1: Rate of Understanding: total sample frequency of response visualized June 27-28, 2011 Cambridge, UK 7 2011 Cambridge Business & Economics Conference ISBN : 9780974211428 Source: Summary of Results. 4.2. Reasons behind Implementation Participants were given the choice of listing the top-5 reasons behind the implementation of their organization’s sustainability programs. The choice options for this question were based on extensive literature review, where common reasons for implementing sustainability, CSR, and change, into an organization were listed. In Figure 4.2, we observe the hospitality segment’s response to question number seven of the survey questionnaire. Results revealed that the hospitality segment, showed ‘personal values and beliefs’, as the top reason for implementation of sustainability into their businesses’. Followed by ‘market needs/anticipating consumer demand’, ‘natural resource concern’, ‘CSR goals’, and ‘competitive advantage’, making up the top 5 reasons among the industry. It is interesting to point out that some participants in this segment did listed ‘previous success’, as a reason for implementation, although it ranked low on the list. However, it is not clear in the response if this ‘reason’ is based on own previous success, or the pervious success of others. In comparison, other industries reviled similar answers to hospitality segment. However, other industries’ first choice for implementing programs was ‘market needs/anticipating consumer demand’, followed by ‘CSR goals’, and ‘natural resource concern’, also including June 27-28, 2011 Cambridge, UK 8 2011 Cambridge Business & Economics Conference ISBN : 9780974211428 ‘return/profit/cost-savings’ as a top-reason, tied for 4th. Of all the eighteen (18) choice options listed, both segments reviled the same choices in the top-5, however, in much different orders. Figure 4.2: Hospitality segment: Reasons behind implementation in your organization 4.3. Perceptions as to why ‘others’ are going green This section of the study was designed to gather information on perception; asking participants to make assumptions about the decisions of others, in the hope of revealing what they feel are the true motivators behind implementation in the business community. These results also greatly differ between segments in regards to their own business’s reasons for implementation. However, in both questions concerning reasons, results revealed one universal common ‘reason’ consistent among both segments, which was ‘Market Needs / Anticipating Consumer Demand’. June 27-28, 2011 Cambridge, UK 9 2011 Cambridge Business & Economics Conference ISBN : 9780974211428 4.4. Benefits of Implementation This study also investigated the views of potential ‘benefits’ of implementing sustainable programs. The ‘benefits’ chosen by the hospitality segment reveled that ‘Guest/client satisfaction’ was a top benefit followed then by ‘press and marketability’ and ‘competitive advantage’. In comparison, the other industries segment chose the most considerable benefit as ‘press and marketability’, followed by other high ranking fair benefits such as ‘outside interest’, ‘competitive advantage’, and ‘increased employee moral’. It’s also important to note that ‘tax relief’ and ‘cost savings/profits’ received the lowest ranking, with ‘tax relief’ listed as not a benefit currently by a high number of participants. 4.5. Understanding sustainably related to Challenges In this section we have explored the similarities and differences between variables and possible reasons for their differences between the two segments. The total sample revealed an overall mean of 3.55 indicating an overall ‘general understanding’ of the term sustainability; this includes 11 participants indicating an ‘expert’ understanding. In order to find out how the ‘experts’ define sustainability; we classified and compared their definitions to the four main categories of definitions in major academic literature, with a fifth section for outliers: the U.N. Definition, Impact Measurement, Triple Bottom Line (3BL), or personal values /CSR. Table 4.3 reflects the cross-tab correlation between the areas of understanding sustainability and defining sustainability. Results first showed that although all participants’ in Table 4.3 reported to have an ‘expert’ understanding, they differed in scope of definition, reveling a lack of relationship or parallel between the understanding and the definition of sustainability. Thus, this could imply that individuals understating of the term sustainability, no matter how detailed or specific, still shows variance meaning; demonstrating a lack of clear explanation, even among those who consider themselves as ‘experts’. These findings support the mirror June 27-28, 2011 Cambridge, UK 10 2011 Cambridge Business & Economics Conference ISBN : 9780974211428 existing theory, which implies sustainability can really only be defined by the individual, in context with a specific organization or business (Jonker & Witte, 2006; Gossling et al., 2009; Mootee, 2009). Table 4.3: Sustainability defined by those with 'Expert' understanding Response to Question 1: Rated ‘Expert’ Understanding of the Term Sustainability. Expert 1 Expert 2 Expert 3 Expert 4 Expert 5 Expert 6 Expert 7 Expert 8 Expert 9 Expert 10 Expert 11 Response to Question 2: Scope of definitions as categorized in Section 3.2 UN’s explanation Impact Measurement 3LB Values/CSR Outliers X X X X X X X X X X X 5. Further Implications and Recommendations A key outcome of this study has been that despite what some media articles are reporting, hotels, a main pillar of the industry, are ahead of other industries in adapting sustainability into their business models and strategies; testing theory presented by Bohdanowicz (2009) and Buckley (2009), and finding it concurrent. However, there are limitations to how this data can be generalized as the majority of information was captured form participants in the United States and United Kingdom; therefore it is not indicative of all hospitality or tourism organizations worldwide. Another key outcome reveled that this shift to sustainability is due to market needs or organizations anticipating consumer demand. This could further implicate that the late majority and laggards in sustainability are likely to miss the current competitive advantage. Historical literature indicates an increase in survival rate from travel trade services with the adoption of new innovative services (Hall, 2009; Tushman & Anderson, 2004). This current June 27-28, 2011 Cambridge, UK 11 2011 Cambridge Business & Economics Conference ISBN : 9780974211428 study provides incentives for hospitality and tourism organizations, not only to capture the foreseeable demand, but by adopting new programs into the organization firms therefore can better face the challenges of versatility, complacency, and total employee involvement, ultimately making them stronger organizations. Sustainability had been found to provide organizations with plenty of press and marketing opportunities, however, is has yet to yield concrete measureable results or useable accountability standards; which is in turn directly affecting the perceived benefits and value of implementation. It is suggested by this study’s research that the more easily sustainability’s is communicated and understood, the more the benefits, value, and progress will be yielded. One approach in tackling this challenge of absent benchmarks has been adapting to, or acquiring a sustainable brand label or certification trademark. Current literature does exist on eco-brands labels and certifications; however it is still in the infancy stage. Recommendation for further research should be focused on establishing a clear and identifiable brand for sustainability, which easily communicates its meaning of sustainability to consumers and employees. Also, yet to be explored is the hospitality industries affect over consumer education is area sustainability. The importance of networks and creation and successful partnership strategies has been documented, however, an outline of information as to their effect on consumer education and understanding of the term is still limited. 6. Conclusions In light of our analysis and discussion it is fair to say that some major travel trade organizations are taking sustainability seriously, and have emerged as early adaptors of sustainability as preventive innovation. However, ultimately the reasons behind organizations implementing sustainability; do not show a strong relationship to the benefits currently being received. June 27-28, 2011 Cambridge, UK 12 2011 Cambridge Business & Economics Conference ISBN : 9780974211428 With the hospitality and tourism industry’s commanding influence and reach in the global economy; business and organizations have a huge opportunity to take the lead of this growing market, by taking pro-active steps to capture this foreseeable demand. However, due to sustainability current state in the preventative innovation cycle, until sustainability finds a way to offer stronger value to organizations, within the hospitality industry and other industries, further progression will remain slow. An extremely important element for future research is the continued reckoning of perception among management professionals, both within hospitality and other industries in regards to sustainability. As preceding literature attests, ‘it the awareness, attitudes, and perceptions of the owners and managers of tourism enterprises which are often of most importance, especially those organizations, predominately national and international companies, wherein policy is dictated by head office” (Leslie, 2009: 216). Therefore, not only are the decisions for implementation currently managed by leadership, it can be interrupted that what it actually means to be a sustainable hotel or a sustainable tourism organization, has to do with perception and judgment of leadership. 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