The escalating climate debate has thrust all sectors into the limelight, prompting critical questions regarding their sustainability agendas. This urgency has been brought to the forefront as extreme weather events become more common, highlighted by Delhi’s record-breaking temperatures soaring to 52.4°C and London’s particularly rainy summer.

These climatic shifts pose an issue not just to the environment but also to the allure of popular tourist destinations. Few travellers would enjoy getting baked at 52°C. Learning from the impacts of the global pandemic, the tourism industry has acknowledged that its survival hinges on its capacity to adopt and champion sustainable practices.

The industry, which traditionally thrives on the beauty and bounty of our environment, faces a challenge. It must preserve the very resource it seeks to exploit or at least capitalises upon.

As a sustainability expert for one of the world’s largest travel management companies, here are my thoughts if the tourism industry is genuinely prepared to invest the substantial sums required to pivot towards a greener future.

The current state of sustainable tourism

Tourism accounts for a significant slice of the global economy, contributing to 9.1 pc of the world’s GDP and created 27 million new jobs in 2023. However, it is also a double-edged sword. While it fosters economic growth, it is responsible for roughly 8 pc of global carbon emissions, not to mention the local environmental degradation, cultural erosion, and resource depletion in overburdened destinations.

Tourism is responsible for roughly 8 pc of global carbon emissions

With increasing pressure on reaching sustainability goals set, there is more effort being made by various government bodies around the world to the travel industry, companies and organisations as well as travellers.

Sustainability with initiatives like installing LED lights and low-flow showers

Recognising this, the industry has gradually awakened to the call for sustainability with initiatives like installing Light Emitting Diode (LED) lights and low-flow showers, travel agencies curating eco-friendly packages and airlines proposing carbon offsetting schemes to the conscientious travellers.

This shift is heartening, yet scepticism remains about the depth of the industry’s commitment to sustainability and whether it is prepared to make the necessary investments to do some actual good on the ground, instead of greenwashing, as some players may be accused of.

To meet the Sustainable Development Goals, investment in the realm of hundreds of billions of dollars per year is needed

The investment dilemma

The transition to a sustainable tourism model is laden with extremely high costs. The United Nations Environment Programme (UNEP) estimates that to meet the Sustainable Development Goals (SDGs), investment in the realm of hundreds of billions of dollars per year is needed.

Retrofitting hotels to be energy efficient, transforming operations to reduce waste, and investing in sustainable infrastructure like renewable energy and green transportation, especially the aviation industry, are not marginal expenses.

Despite the necessity to make unprecedented levels of investment, it is essential to see if the industry’s pockets are deep enough to sustain such monetary outflows, especially after the crippling blow dealt by the Covid-19 pandemic.

Though a detailed business case study is yet to be conducted, there are some clues already available about whether these investments are worth it.

Let us look at the hotel industry which often faces a dilemma when considering investments in sustainability. The upfront costs can be rather significant, yet the long-term benefits, both financial and environmental, can be compelling.

Sustainable practices can lead to reduced operating costs over time. Energy-efficient lighting, heating, and cooling systems, as well as water-saving devices, can drastically cut utility bills. These savings can go a long way in offsetting the initial investment costs.

Studies have found that hotels investing in sustainability can see a positive Return On Investment (RoI). While initial investments are sometimes higher, the long-term savings and additional revenue from increased demand can more than make up for it.

The pioneers and pushback

Like anywhere else, in any other field, there are undoubtedly leaders and laggards in adoption of sustainability and setting a blueprint for sustainable tourism. The Nordic countries, for instance, have embraced sustainability with a zeal that others might benchmark. Iceland, with its geothermal spas, sustainable fisheries, and renewable energy, advocates a model that intertwines economic benefit with environmental stewardship.

In 1993, Scandic Hotels decided to become a leader in sustainability which is now an integral element of all operations in their daily operations. They have been voted the most sustainable brand in the hotel industry for nine years in a row, by Sustainable Brand Index of Sweden.

It is no longer enough to have an environmental, social and governance (ESG) strategy focused on reporting and setting targets for some distant future date. Hoteliers must show that they are already taking action on ESG issues across their value chain.

Smaller operators struggle to justify the upfront investment without immediate payoff

International hotel chains and independent operators alike have begun to address these environmental challenges by introducing sustainable practices into their daily operations. Unfortunately, these efforts have thus far seen success predominantly at the property or city level due to the
fragmented nature of the market, highlighting the necessity for government intervention to bolster sustainability throughout the industry.

However, not all players are aboard the sustainability train. Smaller operators struggle to justify the upfront investment without immediate payoff. In nations where tourism is pivotal yet governance weaker and oversight is lax, the environment pays the price for unfettered growth. The financial commitment to genuine sustainability is a towering hurdle for many, often leading to ‘greenwashing’ as a facile alternative.

Consumer influence and authenticity

But fortunately, travellers of today, particularly millennials and Gen Z, demand authenticity and ethical operation. Their influence cannot be understated as they drive demand towards greener choices, forcing the industry to respond with genuine initiatives or face the exodus of clientele. This consumer awakening is potent, yet change requires much more than just the consumer pressure. It demands an industry-wide ethos that intrinsically values the environment as a stakeholder.

A growing number of Indian travellers prefer to support businesses with strong sustainability credentials. Travellers are now willing to spend 30 pc more on hospitality companies with sustainable practices. By investing in sustainability, hotels can attract this demographic and potentially charge a premium for their eco-friendly services.

The Global Business Travel Association, major international carriers and 40 companies and organisations have come together to form a new sustainable aviation fuel alliance called SAF Coalition to rapidly scale investment in the SAF sector and advocate for the incentives and policies necessary to promote US economic competitiveness in the emerging SAF marketplace.

Travel tech firm Amadeus recently commissioned a survey with 500 travel managers globally and uncovered that investing in trip management technology to reach sustainability goals is a top priority for corporate travel managers.

For this moral realignment to concretise into significant investment, policies, and frameworks must be enforced. Governments and international bodies must align incentives for green investment in tourism, balancing carrots with sticks, subsidies and tax breaks with regulations and policies.

Sustainable travel has been steering the European tourism policy for the past few years, led by increasing demand and expectations by the travellers and the host communities alike. The European Union has taken the lead by setting a target to cut its greenhouse gas emissions by at least 55 pc by 2030.

To empower consumers in the green transition, the European Commission and EU Consumer Protection Authorities have contacted 20 airlines to respond within 30 days outlining their proposed measure to address potentially misleading environmental claims.

With increasing pressure on reaching sustainability goals set, there is more effort being made by various government bodies to the travel industry, companies, and organisations as well as travellers.

The road ahead

With increasing pressure on reaching sustainability goals set, there is more effort being made by various government bodies to the travel industry, companies, and organisations as well as travellers

There are glimmers of hope that the tourism industry is serious about sustainability. The rise in renewable energy use, the commitment to achieving net-zero targets from some of the world’s largest airlines and hotel chains and the development of more sustainable tourism products and services are encouraging. Yet, hardcore sceptics rightly argue that these incremental changes are not enough, the pace must quicken and the scope must broaden.

The current investments are noteworthy. However, it is still a fragmented market. To be genuinely serious about sustainability, the industry needs to look beyond token gestures towards integrated, long-term strategies that encompass not just environmental, but also social and economic dimensions.

As we surge ahead, it is clear that consumer demand, regulatory pressure, and the existential threat of an ailing planet are tightening the screws on the industry. The tourism sector’s survival hinges not just on the present financial ledger but also on the health of the ecosystems and communities it relies on.

(The Green Corner is a regular feature of India Outbound. We invite travel and tourism industry stakeholders, analysts and travellers to contribute to this column. For more information, send an email to contact@indiaoutbound.info).