IEMS - Thought Leadership Brief #73

3 SPRING 2023 NO.73 / THOUGHT LEADERSHIP BRIEF In fact, the greenwashing occurring in the consumer products industry has created the impending need for more transparency and reporting, so to enhance the credibility of service and products providers and generate trust in consumers. Then there’s the question of price, as sustainable travel is often perceived to be (or effectively is) more costly, and most customers’ inclination to pay for a premium depends on which segment they belong but is generally still low. This is even more so when the booking experience for sustainable options is perceived as more cumbersome, and the information required to make the choice is not easily accessible. Finally, the lack of rewards or acknowledgements for their better choice or behaviours is another factor hindering travellers to choose more sustainably. While the six factors above provide a very comprehensive explanation of key roadblocks, there are other underlying dynamics and factors worth mentioning. First is the question of pricing, which seems to be the most pressing to travellers. Currently, sustainable options seem not as comfortable or easy to book as their competing ones, plus they are pricier. Hence, why would people need to go the extra mile and pay more for them? And, in some cases like that of booking flights, why should travellers be the ones to bear the costs of compensating carbon emissions? Finally, why are we always talking about costs and not about potential savings? The answers to these questions are simple. First, sustainable products and services in tourism need to be more easily accessible. Booking. com’s new feature of the ‘Travel Sustainable property’ badge is a step towards that goal. Currently, there is even a filter to select only such properties, yet this filter could be further expanded to cover different practices (i.e., removal of single use plastics, energy saving options, etc.) and levels for properties to ‘race’ towards sustainability. Also, as this system is very new, introducing a verification system for travellers to confirm such claimed efforts exist would be ideal. Secondly, most travellers already know that companies do not need to let them pay more to be more sustainable. Replacing single-use cutlery with reusable ones or providing refillable jugs and eliminating plastic water bottles is just a matter of making a little investment that will then be repaid in a few years. Introducing energy saving measures will also be an easily repayable investment, and so on. In making customers pay for investments that will repay themselves, companies are either asking for more profits or not showing enough commitment on sustainability, and travellers don’t agree to that. Moreover, compensating for carbon emissions should be made mandatory for airline companies so to give them an actual incentive to experiment with less carbon-intensive fuels and responsible catering services. Currently, most airlines make an overly extensive use of disposable materials. Some of these materials are necessary for hygiene reasons, but most can be replaced yet this is not yet happening. All they offer is instead an option to pay to offset carbon emission. This, in my view, is connected to the way tourism companies and travellers perceive sustainability, which seems to be different. As a matter of fact, industry research shows that ‘sustainable travel products are still in their infancy and obtaining the required funding and sponsorship remains a prime challenge for T&T companies.’10 Yet re-investing profits in more sustainable business models will repay in the long run. Also, current sustainability practices employed by the industry often include carbon offsetting or embedded products that have an effect mostly on energy consumption. However, studies consistently show that travellers feel that examples of sustainability practices are best represented by the usage of renewable energy and resources and by reducing or eliminating single-use plastics. The former is an embedded feature of a product, but the latter is highly visible to travellers, which are therefore signalling the need Source: Accenture analysis, 2022 Note: 1. Product is not available in the current market; however, it will be available in the future. Product configurations included in the framework above are the ones offered at the time of booking. 10 World Economic Forum and Accenture, 2022. Aviation Hospitality Car rental and ride-sharing Industry Product con guration of sustainable features Ancillary product Bundled product Embedded product – Latest aircraft generation – Electric/hydrogen-powered aircraft – Hybrid electric vehicles – Full electric vehicles – Energy efficiency – Entire property powered by RE – Low-carbon menu – SAF usage services – Avoidance and/or removal carbon offsetting – Avoidance and/or removal carbon offsetting – Low-carbon menu – Avoidance and/or removal carbon offsetting