The travel industry — hotels, airlines, cruise ships, as well as their supply chains — is under intense pressure to reduce its carbon footprint.
But what's keeping the travel business from moving more quickly toward carbon neutrality is the lack of a leading voice and the potential that companies could lose operating margins while establishing industry sustainability standards.
During a panel on tourism's responsibility in climate-change solutions at the World Travel Market in London, participants discussed the issue from all angles. They agreed that the hotel industry and its guests must shoulder some of that responsibility.
Jane Thompson, director of aviation, travel and tourism at consultancy ICF and deputy chair of British Aviation Group, said governments need to lend a helping hand, too.
“It comes down to fuel. Its cost is three to five times what it was. Any nascent industry needs government support. … Investors need help in a risky environment,” she said.
Nico Nicholas, CEO and co-founder of Zeero Group, which advises on businesses’ climate-change issues, said governments are wielding sticks as well as handing out carrots.
“Fines and regulations are needed to wake up the industry, but aviation should not shoulder this on their own. It is up to all of us to take a share of that responsibility, and we need to recognize the challenges,” he said.
The cost to remove one ton of carbon dioxide from the atmosphere has a top range of approximately $4,000, Nicholas added.
“At that rate, we’ll be paying fines and still requiring investment,” he said.
There are simple ways of upgrading fuel by converting biocrude into biodiesel, which reduces emissions, Nicholas said.
The way to get the ball rolling is educating all parties and stakeholders, panelists said. That requires storytelling and collaboration, said Munnmunn Marwah, chief operating officer of business advisory MMGY Global and Think Strawberries.
“Teams need to speak about it confidently. In India, we have no end of sustainability policies, but in day-to-day life, it is not always there. We need to create a shift in habit. It should be more about customer experience, rather than just a tick on a list,” she said. “It might be a small start but have rewards around [key performance indicators] and understand purpose and methodology before you expand.”
One voice still needed
One of the biggest impediments to the travel industry becoming more sustainable is there's no definitive voice leading the way, said Anthony Daniels, general manager of the United Kingdom and Ireland for PONANT and chairman of The Expedition Cruise Network. But it's not the first time sustainability issues across hotels, airlines and cruises have been discussed.
“One voice to make it more digestible, and for guests to see how sustainability relates to their journey. Take community engagement as an example. It’s in the top 10 things guests want, but it is low in that top 10, but after the trip, it moves right up. What they experience enriches them. We can do this also for sustainability,” Daniels said.
One voice is good for the overall tourism sustainability picture, but when it comes to operations, partnerships are crucial, said Hans Rood, CEO of Transcend Cruises. Rood has also worked at Cunard/Seabourn, Holland America, Hurtigruten, KLM Royal Dutch Airlines and Royal Caribbean.
“We can sail a long way on batteries, but this requires infrastructure and cooperation. Shore excursions need to be included in this sustainability ethos, too,” he said.
But who takes on the mantle of responsibility for carbon neutrality between the traveler and provider? Thompson said individual travelers bear some of that responsibility, but there's an opportunity to both forward good citizenship and see ticket prices fall.
“I want to travel sustainably and add that to my social media. Such activity will impact the industry due to the price gaps that will form. It is education first, though, and it is possible to do this upwards through the C-suite. Tourism and hotel industries also must put pressure on governments, and underlying all is investment,” she said.
Despite guest sincerity about climate change, it is still the consumer who expects the travel company to take responsibility, Nicholas said. He added travel providers must look at this responsibility as a marketing opportunity.
Cruise ships and river yachts can take waste from the communities they dock in for fuel, he said, giving one such marketing opportunity.
“[Those communities] will love you, and the guest will, too. Add $2 to the [day’s cost], and we will earn hundreds of millions to help sustainability. What we are lacking is a tangible story behind” that increase in fare, Nicholas said.
Take ownership
The entire travel industry needs to “shout louder and be proud of what we’ve done but also must underline the challenges that face us,” Daniels said.
It could be the case of one company doing it, and everyone else following, or no one doing anything, and everyone else being content with that, Nicholas said.
“Take ownership. That will lead to FOMO from the other companies,” he said.
Marwah said her work with Indian airline IndiGo has resulted in a reduction in fuel costs, which has led to definite gains.
“[IndiGo] talks more about efficiency and punctuality. That is sustainability, and for some it is also luxury,” she said.
One step forward Thompson said she has seen is that airports are having much more involvement in destination management, not just obsessing about passenger numbers.
“Often [environmental, social and governance] is too siloed, and businesses are not incentivized to collaborate, but I am optimistic,” she said. “Sustainability is more aligned to derisking and there is an increased requirement for ESG reporting, which makes companies act more consciously, not just competitively.”
Blended finance, which includes green financing, is another initiative that is changing the picture, Nicholas said.
“Be responsible for your little piece and understand how your piece fits into the larger jigsaw,” he said.
Some industry standards in benchmarking sustainability could also go a long way, Marwah said.
“Start measuring what matters,” Marwah said.
“Do not wait for regulations. Think further than that,” Rood added.
Plus, government turnover is likely to happen in most countries every few years, so hotels, airlines and cruise companies ought to lead the discussion on sustainability.
“Governments are only there for four or five years. [The travel industry has] the power, so let’s use it,” Nicholas added.