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. 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