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CSR: hotel groups must reap what they sow

16 February 2006
CSR: hotel groups must reap what they sow

Hotel groups are coming under increasing pressure from guests, financial investors and governments to become more socially and environmentally responsible. Guests might not care enough about the environment to resist having clean towels every day, but they might easily go elsewhere if the locals were resentful, the scenery was trashed or the beach was polluted.

Investors are even more ruthless. If hotel groups take more from the host country than they give back, governments are unlikely to welcome them, seriously curbing their ability to expand - and their viability.

The argument for sustainable hotel development is compelling on several levels. In Asia, for instance, it is recognised that the impact of the 2004 tsunami was exacerbated by irresponsible development - including tourist resorts. The clearance of mangrove forests, wetlands and the mining of coral reefs all reduced natural flood defences and made the death toll of hundreds of thousands of people far worse than it otherwise might have been.

"Companies shouldn't be afraid to link CSR [corporate social responsibility] to profit," says reputation consultant Paul Goldsmith of Paul Goldsmith Consultancy. "A profitable hotel benefits the company, the locals and the host country - as long as it's environmentally sustainable."

Resentment can arise, for instance, where hotels guzzle local resources and fail to benefit the local economy. But by providing an infrastructure of clean water, a power supply, sewage treatment and so on for the whole community rather than just the resort, they store up goodwill - or as Goldsmith calls it "reputation capital".

On paper it's a win-win situation. Treat waste water, for instance, and locals can use it on crops, which in turn can be bought by the hotel restaurant. Clean up the beaches, and the government is more likely to invest in nearby tourist attractions. By saving energy, the hotel saves money.

Support and loyalty Most important, by paying local staff a wage that is average - or even above average - the hotel gains local support and loyalty.

"You get what you pay for. If locals want to burgle your hotel guests, it might be because they don't see a reason why the hotel should be there," says Goldsmith.

But although many companies have CSR policies in place, they often don't work at ground level. Guyonne James, project manager at Tourism Concern, says hotel operators are often under pressure to push costs down and that comes mainly out of wages. "The ghetto outside the five-star hotel you're staying at is where the hotel workers live," she says.

James argues that a social policy should come before the environmental policy. "First, the locals need to be included in the decision-making process; then you need to evaluate the labour conditions; make sure you have a bigger understanding of the local culture; and ensure you get independent auditing of your CSR policy to monitor and evaluate it," she advises.

Consultants reckon this adds up to an equally shrewd business move for expansion-hungry groups. "If two companies are vying for one site and one hotel has a track record of polluting its locality and putting nothing back into the community, the government will choose the environmentally sound one," says Goldsmith.

But the onus doesn't just lie with the hotel groups. Lyndall De Marco, executive director at the Tourism Partnership, which represents 35,000 hotels, points out that hotel companies rarely develop their hotels or own their real estate.

"Developers do that and governments let that happen. In China there are 1,000 hotels being built - all by property developers. Hotel operators come in halfway through if they can, but it means they have little influence at the development stage."

There's also an argument that the battle to introduce sustainable development in "non-green" countries such as China is being lost, but industry observers counter that as China becomes increasingly Westernised and developed it will note the benefits of hotels providing local employment and using local suppliers.

De Marco points out that the West hasn't got a great track record itself, adding that hotel groups still have a lot to learn. "Hotels can no longer just be "green". The pressures of CSR demand that sustainable development has a three-tiered bottom line based on economy, community and environment," she says. "The traditional environmental policies now embrace goals such as alleviation of poverty, education, etc. To do this hotel groups have to work with governments, non-governmental organisations and local people."

Worldwide campaign Meanwhile, and as a reminder of the dangers of not embracing a strong CSR policy, trouble may be brewing in paradise. In Bimini, a tiny island in the Bahamas, a 10-year worldwide campaign against the Miami-based developer of a resort has taken a new turn. Locals and campaigners claim the developer has bulldozed mangrove swamps in a hurricane area and barred locals from parts of their own island - and they want the proposed hotel operator, Conrad Hilton, to withdraw in protest.

"They should be aware of the environmental and social impact," says James at Tourism Concern. "Surely somebody should have asked the question?"

More information

Sustainable Hotel Siting, Design and Construction, published by the Prince of Wales International Business Leaders Forum, is priced £175. E-mail: iblf@mmcltd.com

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