Achieving sustainable tourism goals: increasing role of the public sector
Post COVID, the best hotels are going to be those that connect to their local cultures and communities. The future traveller will want to look to hotels that make him/her feel safe and secure, and also hotels that are taking on that social responsibility, focus on relations, empathy and giving back to the community.
Hotels can no longer be contained with measuring their efficiency by RevPAR, etc. Not only is sustainability a growing social issue, but consumers are becoming more aware of sustainable practices in hotels as information becomes more transparent. By advertising a brand or a hotel property’s sustainable practices and activities, these brands/properties can gain an upper hand in attracting more customers.
Hotels have high fixed costs in mainly two areas: (1) Utilities and (2) Human Resources. It’s an opportunity for the industry to learn how to convert fixed costs into variable costs. “Going green” should really be a priority for the hospitality industry for a number of reasons, including customer loyalty, cost savings, and most importantly, environmental impact. In today’s competitive hospitality industry, if a hotel does not have a comprehensive sustainability program in place, then it is at a disadvantage.
The hospitality industry worldwide has always been a peoples’ industry and largely dominated by the Private Sector. The Pandemic has changed all that. Post COVID-19, the Public Sector is going to play a dominant role in various ways such as public health regulations, environment policies, local community issues, certifications, etc. Public policy interventions will eventually encourage hotels to adopt sustainable tourism practices quickly and efficiently.
A sustainable tourism incentive strategy is a necessity that the national/ state/ regional authorities across the globe should adopt for the resurgence of the covid struck hospitality sector. Incentivised green technology and sustainable-friendly variations will help to overcome the problems plaguing the low occupancy in hotels or hotels which are on the verge of closure.
For example, the government can try to incentivise the costs associated with third-party sustainable tourism certification. One way to give such practices a boost is by offering direct or indirect monetary/ non-monetary instruments that propel private undertakings to change their outlook towards greater sustainability. This becomes more necessary for small and medium-sized properties that will not be able to afford the extra costs associated with green/sustainable certification. It is said that green-certified/eco-friendly hotels require a higher investment than conventional or normal hotels. As per the industry standards, the cost of green/sustainable hotels is approximately 10 per cent to 15 per cent higher than the conventional properties.
The Government/Public Sector can incentivise sustainable tourism practices for the hospitality industry in several ways, such as:
Capital subsidy/Interest subsidy for green/sustainable hotels/purchase of EVs: The hotels which invest in captive power plants and energy-saving machinery/ equipment in their hotels whether in the form of a new construction or retrofitting can be provided funding in terms of capital subsidy or interest subsidy provided the projects are bankable. Subsidies can be offered for the purchase of electric vehicles by the hotels. A capital incentive, including low-interest rate funding, through banks, may help propel the sector to adopt these sustainable measures quicker.
VAT refunds & income tax holidays: Government support for adopting energysaving machinery/equipment/certification can be in the form of VAT refunds or incometax holidays.
Reimbursement of sustainable tourism/green building certification costs: Governments can seriously consider reimbursing/exempting the certification costs which smaller or stand-alone hotels incur towards green certifications. It could be applicable to both new constructions and existing hotels.
Financial support for setting up EV charging stations: Hotels/Resorts/Motels/ Eateries etc can be encouraged to set up electric vehicle charging stations in their open spaces.
Appointment of a sustainable tourism task force: The Government along with hospitality sector stakeholders can form a sustainable tourism task force that will create frameworks and regulations to promote sustainable tourism, capacity building, monitor and evaluate results, share best practices on a domestic and global scale, recognise and award industry best practices, etc.
Promotional efforts: Governments should not only incentivise green/sustainable practices by the Hospitality industry but also effectively communicate to the tourists at large through marketing campaigns that highlight, promote and elevate sustainable tourism properties.
Governments world over are beginning to mandate reduced energy use and emissions in terms of renewable energy policies, electric vehicle incentives, etc. Government authorities worldwide need to frame incentive policies (financial/nonfinancial) to encourage small and mediumsized hotel properties to adopt green practices and/or get themselves certified as ‘green hotels’.
Government authorities’ no longer can postpone their sustainable tourism policies. If Governments don’t already have sustainability on their agenda and built into their strategies, this crisis has given them a real opportunity to rethink.