The Concept Of Sustainability In The Hotel Industry Tourism Essay

Over the years, sustainability and environmental issues have gained significant attention in hospitality, tourism and management projects. Across the world, discussions on sustainable development including that of hospitality industry are ongoing; in fact the hospitality industry is taking a serious note of it.

This chapter discusses on issues, challenges and trends that hospitality industry is facing and might face in the coming years ahead. Eco Responsible Approach and the top issues that might influence the global hospitality industry in the coming years ahead including sustainable development, calls for green hospitality, labour cost, multicultural issues and higher education are taken actively. Latest Trends in the hospitality, ways to enhance guest experience in hospitality and guest expectations to green initiatives shall be discussed. Further, the aspects pertaining to guest demands for sustainable products & services shall be covered.

Key words: Sustainable; Issues; Challenges; Trends; Hospitality Industry

7.2 Sustainability, Tourism & Hospitality:

The concept of sustainable development was initially taken in the context of the social indicators and thereafter expanded to address the environmental indicators. The World Commission on Environment and Development (The Brundtland Commission) popularised the concept of sustainable development in 1987. We may define sustainable development as: ‘Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’ World Tourism Organisation (UNWTO) has mentioned that Sustainable tourism development meets the needs of present tourists and host regions, while protecting and enhancing opportunities for the future. It is envisaged as leading to management of all resources in such a way that economic, social and aesthetic needs can be fulfilled, while maintaining cultural integrity, essential ecological processes, biological diversity and life support systems.

The dimensions of sustainability encompasses of following elements:

competence management;

eco-efficiency;

financial management;

innovations;

operational performance;

product performance.

stakeholder management; and

sustainable management;

Sustainability practices are becoming increasingly common and the issues concerning to sustainability have become an essential part of the social and political discussions in most of the countries. These days many of the small businesses have to struggle for survival in a world of competitions with key players, mergers and mega corporations. There is a strong urge for sustainable development and thus need of involvement of all stakeholders including local communities. Further there is a strong requirement for educating the young people on the environmental issues and instilling the values in their minds so as to make the world a better place in which to live.

The concept of sustainability in the Hotel Industry:

The hospitality industry is gradually becoming one of the great examples of why running a sustainable business will be crucial for long-term success. Defined at the 1992 UN Conference on Environment and Development in Rio de Janeiro as ‘meeting the needs of the present without compromising the ability of future generations to meet their own needs’, sustainability is increasingly becoming one of the most relevant issues to hoteliers in the 21st century as costs continue to rise, demand becomes increasingly sensitive and the pressure on being economically, socially and environmentally responsible grows.

Due to the growing environmental degradation, society is forced to become increasingly aware of the need of adopting and enforcing more effective measures of environmental protection. Sustainable development, including the development of a more sustainable built environment, has thus become a priority and a challenge of our time. A number of studies indicate that the hotel industry has an important responsibility in this process. The global hotel industry, comprising of various facilities, constitutes one of the most important sectors of the tourism industry. Hotels provide accommodation and offer high level of resources for utilization (including energy, water, consumables) in hotel facilities, the environmental footprint of hotels is typically larger than those of other types of buildings of same size. Research has revealed that the hotels are large users of consumer goods; waste generation is one of the more visible impacts the hotel industry has on the environment. According to an IHEI (2002) estimate, a typical hotel produces in excess of 1 kg of waste per guest-day, which, for a typical facility, results in many tons of waste each month. These figures clearly reflect that there is an urgent need for more environmentally sound practices and products in the hotel industry.

Over the years, there has been an increased environmental awareness among the general public and the development of the concept of “green consumerism” has flourished. Where, most of the hotels in the recent past were paying attention to environmental responsibility it has is now increasingly emerged as a corporate issue.

However, in order to achieve greater environmental responsibility, proper implementation tools and strategies are necessary. The instruments of action include the enforcement of relevant laws and regulations (health and safety requirements, planning and building regulations, water utilization, waste generation and the release of emissions), as well as voluntary standards. Certification and labelling schemes are increasingly growing in popularity. Further, the governments, NGO’s, Academic Communities are coming up to assist hoteliers in running more environmentally responsible businesses. As a matter of fact many good hotel chains have also developed their modules and have practiced innovative practices. Significantly, the research study by Centre for Hospitality Research, Cornell University (2010) & (2012) by Glenn Withiam & Rohit Verma in Hotel Year Book 2012 highlighted on Sustainability citing “customers’ demand for sustainable hotel operations has taken root and expanded. The hotel industry has taken notice, as demonstrated by a push for consistent reporting standards and industry best practices coming from our industry roundtables in both Asia and North America. In that regard, meeting planners and corporate planners are now requesting that hotels provide sustainability-related information (such as energy use or recycling policies). Third-party certification of green claims has become an important part of sustainability reporting, as demonstrated for instance by Travelocity’s Green Hotel Directory, which does not recognize self-certified hotels.”

Hotels are highly dependent on financial performance and have to bank upon increased demand and reducing the costs for survival. Sustainable practices can appear altruistic to the guest, shedding a positive light on a hotel. Also, when applied correctly they are generally cost-effective with short periods of payback. The hotels who implement such measures are generally financially sound as costs are recovered in a short time and many a times often the long-term savings are great. However, only a small percentage of existing hotels have sustainability at the core of their business routine that also in organized sector.

There are many benefits for a hotel with sustainable business practices:

– Additional revenue through lower costs.

– Cost saving through cost-reduction measures.

– Easier financing because of lower long-term risk.

– Greater attractiveness to lenders.

– Greater long-term financial stability.

– Increased asset value because of long-term business capability.

– Long-term ability to stay in business and be profitable.

7.3 Trends & challenges of the industry:

Due to increased awareness on the growing environmental degradation, society is becoming aware of the need of adopting and enforcing more effective measures of environmental protection. Sustainable development has become a key priority and a challenge of time. The issue of sustainability needs to be addressed at different levels, in cooperation with academia, industry, policy makers, the general public and other stakeholders. The hotel industry has an important responsibility in this process. The study by Wang Jin – zhao and Wang zing (Shenyang University – China) in the Journal of Management Science & Engineering (2009) in has highlighted in the article issues, challenges & trends, that facing Hospitality Industry has been taken in this chapter and as under

7.3.1 Issues in Hospitality

Green Hospitality: Sustainable Development Calls for green hospitality. Going green is a burgeoning issue in the hospitality industry. People are keen to look at sustainable solutions in a whole new way. There has been a change in the perception of green; it has gone from a fringe movement to mainstream. As a sign of its gaining popularity, one of the appreciated initiatives in India is Welcom Environment Programme by ITC Welcom Group of Hotels in addition to others. Across the globe various conferences on hospitality are being held. The basis of sustainable hospitality operation is a three-part balance, expressed as “profits, people, and planet.” By taking those three elements into account, thus, a sustainable green hospitality development program becomes economically viable, as well as beneficial to the community and environment.

Higher Education: Tremendous changes are taking place in hospitality industry which poses several challenges for transformation of the whole educational process including educational curricula, learning materials, instructional practices and education stakeholders. This includes restructuring the learning process to reflect the use of information in the real world, changing the role of the educator from presenter of pre-packaged facts to facilitator of active learning and transforming the library specialist to an active collaborator in curriculum planning for effective use and availability of information resources. Ministry of Tourism, Govt of India is providing Hospitality & Tourism Education through National Council of Hotel Management, Indian Institute of Travel & Tourism Management and interestingly is Broad Biasing Hospitality & Tourism Education through Central Financial Assistance Scheme by giving a direct grant of Rupees Two Crores to each University for offering hospitality programmes under this scheme. In 2012 about 22 universities in India have been benefited and many more are likely to get. Indeed, educators need to inspire new aspirants and gear them for industry needs. The new educational providers have also been offering the undeniable demand for open, flexible, distance and e- learning; with world class universities like IGNOU offering Hospitality & Tourism Programmes, as collaboration project NCHMCT & MOT, Govt. Of India; and state universities like Uttarakhand Open University and others are promoting Hospitality & Tourism Programmes reaching to the unreached. Similarly organizations like AHLA, whose primary business is not education but who facilities to it with its educational institute.

Labour Cost Issues: Labour expenses continue to remain amongst the large expense items for hospitality managers, accounting nearly about 40- 45 percent of total operating costs. Thus, any trend or issue that could potentially impact labour costs needs to be taken seriously by hospitality owners and managers alike. “Due to the magnitude of the expense, labour costs and issues have always consumed a substantial portion of the time and efforts of hospitality managers. The cost of labour is the biggest expense in all categories of hotels. Even with the advent of select-service properties, hospitality developers cannot avoid the human component of hospitality operations. While managing labour expenses is important, hospitality managers also needs to be aware that employees are an integral part of the hospitality experience. The interaction between hospitality guests and employees has a significant impact on the customer experience and the success of the business operation. Therefore, a fine balance must be drawn between cost controls and guest satisfaction.

Multicultural Issues: The newest trends and topics surrounding hospitality research and development is the management of multicultural talent in the hospitality industry. With the development of globalization, multicultural issues are facing and disturbing the industry operators. Bringing the far corners of the world together is part and parcel of what the hospitality sector does. Blending amenities to cater for the needs of the world’s different cultures is central to success for large, international hospitality chains. Cultural issues have never before been such a crucial determinant of how a large hospitality should operate. In some Asian cultures, for example, eye contact is not sought, as it can make guests feel uncomfortable, while in Western tradition it is equated with openness and honesty. This could be important in defining how staff addresses themselves to certain Asian guests.

7.3.2 Challenges confronting the Hospitality Industry: The various kinds of challenges confronted by the Hospitality Industry revolves around Economic Issues, Operating Issues, Marketing Issues and Technological Issues

Operating Issues

Human Resources: Shortages of human resources and their impact on the industry in almost every geographic location are consistently among the most difficult challenges noted by hoteliers. In many communities, hospitality expansion is limited not by capital, but rather by human resources. A shrinking labour force is the number one challenge facing the global hospitality industry, according to the International Society of Hospitality Consultants, which recently convened to brainstorm world issues and rank them according to importance. The problem of attracting and retaining qualified workers, once an issue only in an isolated number of markets, is increasingly becoming a global challenge. Demography, wage levels, failure to adequately address worker satisfaction and a reputation for long hours and low pay are all cited as contributing factors. Creative hospitality professionals have begun to develop innovative strategies for capturing and keeping high quality workers. In India itself the research report by HVS International cites that ongoing demand for human resources is 3,20,000 and the trained manpower supply is 12,000 annually through Govt. Institutes of Hotel Management. The Prime Minister’s National Skill Development Council has articulated a vision that tourism sector will employ additional 5 million skilled persons by 2022. Realizing the increasing importance of Tourism as an integral part of economic and developmental policy of India Ministry of Tourism Govt. of India has received the 12th Plan Allocation in Rupees 15,190 crore which is a substantial increase over its 11th Plan size of Rupees 5156 crore. In order to meet the growing needs of Human Resources, Ministry of Tourism, Government of India has launched Hunar se Rozgar Programme with a target to train 1,07,800 people in 2016-17 against training of 53,800 personnel in 2012-13 for the trade of Hospitality & Tourism.

Cost Containment : Hospitalities are increasingly challenged to find ways to reduce costs without sacrificing the quality standards imposed to consistently meet guest expectations. The idea of “doing more with le” requires managers to think about ways to operate more effectively (in other words to “do the right things in the right way”) and to examine possibilities for cost savings that will not affect the guest’s perception of value.

Increased Competition : Hotels everywhere indicate that their community is overbuilt; there are too many available hospitality rooms relative to the guests desiring to rent them. The resulting competition, which often involves price cutting in efforts to provide greater value to guests, educes still further the profits generated. A steep fall in occupancy ratio in the wake of the global slowdown and tight competition among hospitality operators in a shrinking market have brought down hospitality room rents drastically across the country. The competition has resulted in low occupancies and as a result, the average room rate has taken a beating of almost 30 percent in all major leisure markets. Rooms are now sold not only for less but also bundled with packages, like breakfast, airport transfers or a day’s sightseeing. Competition calls for innovation in hospitality industry.

Marketing Issues

Market Segmentation and Overlapping Brands: Market segmentation is increasing as lodging chains focus on a specific niche of travellers. Additionally, brands overlap. Some industry observers are concerned that franchisers may expand their number of brands to the point that investors who purchase from the same franchiser will be in direct competition with themselves! Also, as the number of brands increases, the ability of consumers to differentiate between them decreases.

Increased Guest Sophistication : Consumers have become more sophisticated and, as a result, so have the types of products and services that they desire. Amenities, including business centers, exercise and recreational facilities, and guest-room innovations, increase costs but, if not carefully selected, may not appeal to many guests being served by a specific property.

Technological Issues

The challenges of keeping up with the fast pace of technology is difficult and expensive.

Interactive Reservation Systems: Guests can now use the Internet’s interactive reservation systems, and hospitality companies are sometimes criticized for the (alleged) large number of keyboard clicks required to make a reservation. The number of reservations made via the Internet continues to increase. Surveys show that a good number reservations are made through the Internet, and this percentage is increasing every year. With such high percentage of reservations done through the Internet, hospitality cannot afford not being connected. If the potential guest cannot book online, a reservation will be made at the competitor’s web site.

Guest-room Innovations: With wi fi connectivity, mood based lighting, choice of music, multiple telephone lines, interactive opportunities for ordering room service, modern ammenities and guest-room check-out are examples of amenities that guests increasingly desire, but that are very expensive to install and implement.

Data Mining This technology allows marketing and sales personnel to find new ways to use guest-related data. (data mining: using technology to analyze guest and other related data to make better marketing decisions.)

Yield Management This computerized process allows managers to match guest demand with room rates (high demand means higher rates because of lessened discounts; low demand result in higher discounts.) (yield management: demand forecasting systems designed to maximize revenue by holding rates high during times of high guest-room demand and by decreasing room rates during times of lower guest-room demand). Yield management is critical to maximizing a hospitality’s profitability. The concept are applied to every revenue department and across department. The yield manager’s job is to maximize the revenue per available room by selling rooms to the right customers, at the right price, at the right time.

Economic Issues

Dependence upon the Nation’s Economy When the nation’s economy is good, business travel generally increases. Hospitality occupancy rates and rack rates increase, which results in higher profit levels. The reverse is also true: business travel slows when the economy slow. Then occupancy and rack rates decrease. Discounts to increase occupancy are offered, which yield lower revenues and profit decreases.

Globalization Globalization impacts the lodging industry dramatically because it influences the extent of which people travel both within the country and around the world. Therefore, it is not only the economy of the nation, but also the economies of individual countries, that play an increasingly larger role in the financial success of lodging properties. To compete, they must pay closer attention to the trends of globalization. The industry must reflect the requirements of the global village in many aspects of its operations, including food, services, amenities, staffing policies and training.

7.3.3 Trends in Hospitality Industry:

Rapid Growth in Vacation Ownership : Vacation ownership is the fastest growing segment of the lodging industry and is likely to continue growing as the baby boomers enter their fifties and sixties in the U.S.A.. The World Tourism Organization has called timeshares one of the fastest growing sectors of the travel and tourism industry. Hospitality companies are adding brand power to the concept with corporations like Marriott Vacation Club International, the Walt Disney Company, Hilton Hotels, Hyatt Hotels, Promus’ Embassy Suites, Inter-Continental and ever Four Seasons participating in an industry that has grown rapidly in recent years.

Integration & Globalization: Vertical integration is a trend that began a few years ago. Lodging companies realized that guests’ accommodation needs were not just at one level; rather, they seemed to vary by price and facilities/amenities. Almost all major lodging companies now have properties in each segment of the market. The future of the lodging industry involves globalization. Companies cannot grow unless they venture beyond the United States. American hospitality chains and their management techniques were in demand by many developing countries who wanted premium-name hotel. An extensive survey of the condition of the hospitality would have shown that substantial amounts of money would be necessary to maintain the hospitality’s condition. The hospitality industry is thus at the very core of the globalization of international business. Hospitality companies therefore need to consider the implications of the global context in which they operate and must be prepared to address the questions that arise from this changing environment. Globalization will ultimately touch virtually all aspects of the hospitality industry. Increasingly, customers, management processes, employees, products, and sources of capital will be competed for and will move across national boundaries. Competition in the future will come from global entities with the advantages that globalization brings.

New Management : The complex forces of capacity control, safety and security, capital movement, and technology issues will require a future management cadre that is able to adapt to rapid-paced change across all the traditional functions of management. The growing complexity of the customer/employee interaction, driven by technology and the information age, will shape human resources needs in the future. The customer, armed with more information, will expect frontline and other hospitality staff to be at least as knowledgeable about the firm’s offerings as they are themselves. This will be difficult in an industry characterized by low-skilled, low-paid personnel and a high degree of cultural and behavioral diversity among its employees. Visioning the future: major forces driving change in the hospitality industry’ considers seven areas decisive to the future development of the industry. Each is examined to determine the scope and complexity of the issue and the timing of its impact. That is assets and capital, health and safety, new management , marketing, distribution and capacity management, technology, sustainable development, social issues

Expanded role of Travel Intermediaries & Portals: The entry of Google has added a new dimension to hotel room distribution, since users can book directly from the search results page, instead of clicking through to another site. Going forward, hotels may find themselves being distributed much like package goods. Many guests will go to a travel purveyor for hotel rooms, just as they go to a food market for groceries. Further, there have been facilities extended to many countries including India for developing free websites by google enabling small or even un organised hotels accessible on web.

Mobile apps and RFID : Social media, which have grown exponentially in the past few years, will continue to be a force, but the big electronic development for hotel distribution and operations is mobile devices, particularly those with radio frequency identification (RFID) chips. Because of the remarkable plunge in the cost of RFID, the study by Cornell Research Centre anticipate that this will break out as its own trend soon enough, and the combination of RFID and mobile apps will allow guests to use their smart phones to book a room, check in, open their guestroom door, and settle their folio – all without direct contact with staff. Even without RFID, guests’ use of mobile devices will create opportunities for innovation by hoteliers, including new services and operating efficiencies.

Next generation globalization: Not long ago, globalization meant that hotel brands from developed nations expanded into developing nations, whether through master franchises or by acquiring local firms. Globalization is now flowing in the reverse direction, as brands from developing nations are expanding to developed nations, as well as to other developing nations. To name just a few brands, Taj Hotels from India has now operations in UK, US having properties in Boston, New York, and San Francisco, as well as hotels in London and Sydney, Jumeirah from UAE now manages the Essex House in New York, as well as properties in London and Frankfurt ; Thus, globalization will mean that hotel brands criss-cross the globe.

7.4 Eco Responsible Approaches in Hospitality Business

In the tourism industry, hotels account for a significant amount of the overall pollution generated by this sector. The potential of implementing more sustainable practices in the hotel sector requires the availability of reliable tools for assessment and benchmarking of hotel environmental performance. A number of such tools have been developed by international environmental organizations, branch associations and even hotel corporations. The various schemes differ with regard to geographical/climatic areas covered, types of hotel facilities included, detail of environmental information required, benchmarking methods, user-friendliness and implementation cost.

Green Hotels: In view of the shortage of resources on Earth, rising awareness of environmental protection, and ecological conservation, eco-friendly hotels shall be the answer for the above issues, so that natural resources can be recycled, re-used, and energy can be conserved. These are the future goals of the hotel accommodation industry. The term green hotel (eco-friendly hotel) was first introduced following the emergence of the above concepts. Eco-friendly Hotel Association (2000) was set up to create the green hotel requirements that promote the economical use of water and energy, and reduction of solid waste, so as to safeguard the Earth resources. Green Mountain State (2010) has focused on the creation of an eco-friendly environment, possibly allowing for contribution from all staffs and guests alike. It carefully scrutinizes each area of the hotel operation to find ways to reduce the impacts on the environment. It also looks for ways to educate the public, and to remind everyone that every bit counts no matter how tiny the contribution may be. At the same time, it maintains its commitment to provide the kind of quality service that is expected by hotel guests. The basic concept of a green hotel is a place of accommodation that can provide eco-friendly services, but its main goal shall be focused on ways to maintain its sustainable operation. Under the premise of minimizing the environmental impact, a green hotel shall be managed in such a way to provide patrons with a comfortable, healthy, natural accommodation while its service quality is maintained.

Development of Green Hotels: Eco-friendly or green hotels are developed under the concept of sustainable operation of the tourism industry. It shall be based on the capacity to sustain the ecological environment, and shall be in line with local economic development and local ethics. In addition, it can meet the needs of contemporary people, but without endangering the future generations. Furthermore, it shall be able to promote the local economy, resource conservation, and protect the ecofriendly environment, thus creating a harmonious relationship with the nature. As the hotel accommodation is closely tied to the development of the tourism industry, when the recreation and leisure trend is becoming increasingly popular, increased demand for tourism will also stimulate the demand for hotel accommodation. According to the traditional impression, hotels are places that offer luxury accommodation and services. But, under the global environmental awareness and environmental advocacy, and complying with the environmental management requirements, hotel services are now focused on cleaner production, eco-friendly services, and regular resource conservation.

The concept of eco-friendly hotels came into being under the green corporate culture

and the above principles. With increasing attention on the environmental issues, and

influenced by the concept of green hotels, hotels in every country are urged to implement the environmental management and energy saving measures.

The main spirits of green hotels are to provide affordable products and services to meet the needs of the public, to improve the quality of life at the same time, to reduce the ecological impact on the environment gradually throughout the life cycle, and to reduce the consumption of natural resource. At least, the pace of energy consumption shall be reconciled with the

Earth’s loading capacity. Eco-friendly Hotels Association (2010) firmly supported the

green initiatives through encouragement and promotion of the green hotel services.

Through appropriate management of the natural resources, the green hotel concept

can be applied to the hotel accommodation industry.

The Green Practices in Hotels include:

Commitment to Environmental Practices: (By formulating Environmental Committees, Developing Strategies, Plan of Action, Manuals, formulating green teams, monitoring environmental performance, communicating visibility of environmental practices to guests, stake holders, staff, vendors & public)

Energy Efficiency & Conservation: (Installing occupancy sensors, use of energy efficiency equipments, applications of alternate energy sources, proper HVAC maintenance, energy efficient designs, buildings & construction patterns)

Lighting: (Installing programmable sensors, use of reminder cards, provisions for natural lights, application of dimmer controls, use of CFL and other such energy efficient lamps)

Landscape: (Sprinkler irrigation systems, recycled water, drip irrigation methods, use of drought resistant plants, grouping of tolerant plants, usage of organic fertilizers)

Managing Hazardous & Toxic Substances: (Proper provisions and instructions for storing, use of least toxic products, little or no phosphates laundry products, use of re chargeable batteries)

Pest Management: (Implementation of green integrated pest management programme, application of organic insecticides, usage of traps & barriers and discretion of strong and harmful chemicals)

Purchasing: (Creating environmental purchasing polic