ABTA and the Business Case for Sustainability

Nikki WhiteHead of Destinations and Sustainability

June 2011

In this session:

1. About ABTA

2. The role of the trade association in Sustainability

3. The Business Case and Sustainability

4. What has the recession meant for sustainability

5. Case Studies – ABTA approach in action

• The Travel Association – 60 years this year• Represents over 5,000 travel agencies and more than 900 tour

operators• Main aims:

- to maintain high standards of trading practice for the benefit of its Members, the travel industry at large, and the

consumers that they serve

- to create as favourable a business climate as possible for its Members

ABTA – the Travel Association

Chief ExecutiveMark Tanzer

CommunicationsDestinations & Sustainability

Public AffairsMember & Legal

ServicesFinance

Planning, Development &

Resources

The role of the Trade Association

Awareness/Information

Basic foundations

Joint Initiatives

Policy/LobbyingIndustry voice

Implementation

The sustainability journey

Awareness/Information

Policy/LobbyingIndustry voice

Implementation

Basic foundations

Joint Initiatives

Engagement

Effec

tiven

ess

Good Sustainability Baseline

An approach for all

Driven by reporting as it’s a tangible measurement Retrofitting a sustainability approach into an organisation

Reporting

Business in general

Recognising that sustainability is critical for the continued success of the Tourism Industry - ABTA will provide leadership for our members to develop sustainable businesses.

To support our members in providing a long term sustainable tourism industry for the benefit of holiday makers and destination communities. Using our role to encourage our members to be socially and economically viable whilst encouraging respect for the limitations on the destinations we visit and the environments we work in

The vision

Business Case: why do we care?

- In 2011, talking about the business case may appear to be a backwards step

- Can still be a useful engagement tool

- Bottom line / project approach as a catalyst towards fully embedded sustainability

Economics: impacting on the bottom line:

- Sustainability is not just the ethical thing to do – it makes excellent business sense:

- TUI Travel Plc – 40 FTEs working on sustainability - Energy saving measures = £8 million in the last 2

years

- Scandic Hotels in Scandanavia: savings of £9 million on energy, £2.2 million on water and £4 million on waste over a ten year period across the group

Climate Change

Source: Climatic Research Unit, University of East Anglia

Recession and the growth in demand for Ethical Businesses

A the start of the recession, doomsday style predictions were made for sustainability – these haven’t MATERIALISED

Sustainability reporting has grown year-on-year despite the recession according to PWC

Risk management and legislative compliance were & still are key engagement factors

Current trends – it’s time to get creative with sustainable tourismBusiness case for sustainability engagement is stronger than ever before

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

-10%

-1%

4%

7%

0%

6%

1%

-7%

-18%

-11%

2%

-4%-5%

7%

13%

18%

6%

17%

9%

2%

-10%

-3%

12%

3%

Passenger

Value

Recession in recap2010: A challenging year

0% 10% 20% 30% 40% 50% 60%

51%

43%

36%

31%

27%

23%

18%

12%

A changed market placeWebsite Selection Criteria:

0% 5% 10% 15% 20% 25% 30% 35% 40%

38%

18%

16%

16%

14%

11%

10%

8%

A changed market placeReasons to book offline:

-20% -15% -10% -5% 0% 5% 10% 15% 20%

self catering

room only

bed and breakfast

half board

full board

all inclusive

-16%

-4%

-5%

-5%

17%

20%

-19%

-9%

-7%

-16%

13%

19%

Passengers

Value

A changed market placeConsumer trends: Board Basis

Current market outlook:

•Consumers – spending their holiday funds more conscientiously

•Market = price driven. Price a key motivator for on & offline bookings

•Growth of A.I board basis reflects the need for customers to control costs

•Disposable income – not set to increase until 2014 and therefore, trends look likely to continue for the next couple of years at least

•Exchange rates – playing a key factor in destination selection. Value for money is key. Egypt, Tunisia, Turkey, Morocco and other destinations outside the Euro-zone have seen large growth.

Recession as a sustainability catalyst?

Corporate Outlook: Market declines mean bottom line core area of concern Sound sustainability management = reduced operational costs. The

business case is there Risk aversion through sustainability & brand loyalty? (Top of the list

for online booking selection. BP Gulf of Mexico Oil crisis saw shares drop 6.6% & 12% drop at lowest point)

Consumer Opinion: Value for money and price are key Sustainability can be used to ADD VALUE to the tourism product Sustainability doesn’t have cost the consumer Consumer – now expecting sustainable tourism (but the

responsibility rests with you / 47% on ABTA Consumer trends)

Our future focus

• Rounding off the sustainability journey at the destination level

• Building on our partnership approach with the supply chain = The Travelife Sustainability System

• Online system to help accommodation businesses manage their sustainability impacts

• Demonstrating the tangible benefits of sustainability engagement & why this is all the more important during times of recession

• Developing ‘on-trend’ approaches to sustainability engagement with high customer engagement factors

Case Studies – Sustainability inaction

• Destination Partnerships – rounding off the sustainability journey

• Egypt & Dominican Republic: Government level commitment and resourcing of sustainable development plans

• Marrying destination stakeholders – removing “acting in isolation” • Scaling up impacts on a destination basis• Support implementation process at policy level e.g. renewable

energy innovation• Incentives for acting sustainably supported with appropriate

infrastructure• Embedding Sustainability into destination development plans

Case Studies

• Retail Engagement – pulling sustainability and commercial awareness together

1. Managing internal impacts (energy, carbon, solid waste)

2. Generating customer demand (using sustainability as a USP)

3. Businesses in the local and global community (philanthropy)

• Unique three-way partnership between accommodation providers, tour operators and Travelife to manage and promote sustainability in the supply chain.

• Key Features• Travelife Environmental and Social audit• Centralised shared database for Tour operators• Collaboration between Tour Operators using one brand “Travelife”• Bronze, Silver, Gold Awards (Award plaques)• Continual Improvement Programme• Marketing opportunities via Hotel and Tour Operators

Brochures/Websites• Travelife Collection• Multi-stakeholder advisory and consultation process

Case Studies – Sustainability in action

Engagement

Effec

tiven

ess

Good Sustainability Baseline

Fully Embedded – Day to Day Business

Solo Activities / Project Approach

Destination Partnerships

Retail Strategy

Conclusions

- Role of the trade association is essential for improving industry performance – it must move all along the sustainability journey

- The recession has changed the sustainability market place – more of a focus now on economic costs at source of delaying action on key sustainability issues (climate change etc.)

- Progress needs to be made at the destination as well as supply chain levels for sustainability to be really achieved

- The industry has moved on from a project approach to one of fully embedded sustainability whilst improving effectiveness of outputs

Thank you