Consumers and businesses want responsible travel. How can the industry deliver it?
The travel industry may have been forced into crisis mode at the hands of the pandemic, but as I look out to 2022 and beyond, I see a brighter future ahead.
In November, I was in Glasgow for the COP26 climate summit where I found a renewed sense of optimism: industry leaders I met with and spoke to in person—after a long period apart—showed a real willingness to address sustainability.
In regular conversations with clients in both aviation and hospitality, I can hear the gained momentum. Sustainability is no longer viewed as an afterthought, but something that is integral to future business growth, profitability, and innovation.
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Raising environmental, social and governance matters (ESG) to the top of the agenda
At Accenture, we see a new imperative for travel companies looking to move beyond survival mode as they rebuild: they must become responsible.
It is why we have a systematic approach that will enable travel companies to prepare for change: we call it the Sustainability DNA model. This model aims to strengthen the management practices of companies to influence new behaviors, and must be applied across five key areas:
- Stakeholder inclusion: A means of ensuring trust, accountability and impact both inside the organization and beyond
- Emotion and intuition: Ensure open dialogue across the value chain is in place by default
- Mission and purpose: Vital elements based on integrity that must be embedded into all parts of the business
- Technology and innovation: Emerging technologies offer a useful way to breakthrough challenges, if used responsibly
- Intellect and insight: Puts critical thinking and continuous learning at the heart of what each organization does
More than ever, both business and leisure travelers will be closely attuned to the environmental and social impacts of their decisions, which means aviation and hospitality companies must prepare to respond.
There are several reasons why travel companies must double down on their sustainability agenda, but many lack a clear strategy and roadmap to do so. In Glasgow, we introduced a Net Zero Roadmap alongside the World Travel and Tourism Council and the UN Environment Programme to help and guide companies in their decarbonization efforts, for instance.
Businesses are currently at the stage of announcing sustainability commitments—a welcome signal of intent—but are only in the early stages of developing the strategic roadmaps for achieving these commitments.
Here’s what they should consider on the road ahead.
The rise of the ‘conscious consumer’
Consumer sentiment is quickly shifting in favor of more sustainable choices; given the increasingly visible impact of the climate crisis, this should be of little surprise.
Research I came across from Accenture found that 59% are ready to switch to another travel provider that offers sustainable products, such as low carbon-emission travel, hotels and resorts with the highest energy efficiency, lowest water use, etc.1
However, studies I have also seen show that sustainable options are adopted by consumers only if they feel cost-effective.2 Part of the problem could lie in the fact that almost half (49%) of all travelers feel sustainable options are limited.3
That means travel companies must think harder about how sustainable travel options are highlighted to their customer base across all channels of communication.
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Tackling ESG issues as one
At Accenture, we believe that building a responsible travel company is achievable. Doing so means approaching environmental, social and governance (ESG) matters with clear purpose.
Moody’s published research in October, which reported that global issuance of green, social, sustainability and sustainability-linked bonds was on course to reach $1 trillion for the year, highlighting the rising investor appetite for companies addressing ESG matters.4
Investors know that companies are good at creating value, and want to ensure they can do so in a sustainable way, as this increases planning certainty.
When it comes to the environment, companies must consider measures to reduce greenhouse-gas emissions through the use of innovative technologies, or circular-economy models of production and reductions in food waste, for instance. For airlines, the use of sustainable aviation fuel, or offering customers carbon calculators, could help the industry make a real step change in its decarbonization efforts, while for hospitality companies, similar progress could be made by embracing renewable energy or stepping away permanently from single-use plastics.
On social matters, it means building a workforce that is inclusive and caters to the needs of a diverse customer base, addressing serious ethical issues around child labor across the value chain, and giving back to social communities. Accountability is needed to deliver on such goals, which is why appropriate governance must be embedded.
Putting people front and center
I believe people are the real drivers of every successful business; that means attracting new talent and keeping existing talent onboard is vital.
Over the course of the pandemic, I have seen many travel companies lose good talent, leading to debilitating shortages, which in turn has had a negative impact on the traveler experience. Our own research found that more than half of the 8.2 million travel and leisure jobs lost in the US between March and April 2020 belonged to women, signaling complex challenges around talent retention.
To overcome these challenges, a culture must be in place in which the needs of each employee are met. Implementing this will ensure a productive, healthy balance in the workforce and bring with it a sense of belonging.
Be proactive, not reactive
If travel companies are to meet the sustainability challenge, they must be willing to take proactive measures.
We believe that by adopting the Sustainability DNA model, travel companies will be well positioned to get ahead of impending regulations and create financial value that has a positive impact on society and the environment.
I am pleased to see our clients are willing and excited to debate and explore this urgent matter. This is just the beginning of the journey for many, and I look forward to the lively discussions ahead. There is no time to waste.
1 Accenture, Life Reimagined: Mapping the motivations that matter for today’s consumers, 2021
2 Sustainable Travel Survey 2021 – Importance & Sentiment to Fight Climate Change When Booking Travel
3 Booking.com’s 2021 Sustainable Travel Report Affirms Potential Watershed Moment for Industry and Consumers
4 Sustainable bonds on course to top $1 trillion annual issuance in 2021