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(originally published by Booz & Company)


Competing on the Eco Front

The environmental issues facing the travel industry can be divided into four areas, each of which have different effects at the global, regional, and local levels. First, emissions, contributed primarily by airlines but exacerbated by air conditioning, heating, and ground transportation, are a long-term, global problem, which individual countries can only ameliorate so much. Second, the impact of deteriorating natural resources can be felt on a regional level; it includes everything from scarce supplies of clean water that must be shared among tourists and residents to beaches ruined by overdevelopment. Third, waste is primarily a local problem, and unsustainable, short-term solutions to waste management not only endanger fragile ecosystems, they also put tourism at risk in the long run. Finally, noise pollution remains a major local issue, especially for the airline industry in neighborhoods located near airports, despite significant improvements in the noise levels of modern aircraft.

Addressing these problems holistically, not just in the short term but in sustainable ways, requires strong public-sector leadership that often involves stringent regulations to prevent long-term damage to a country’s travel resources and reputation. A successful regulatory framework needs to encompass every aspect of how the travel industry may affect the environment, including emissions, natural resources, waste, and noise, and it must be driven by penalties and legislation that set clear standards and targets for carbon emissions, recycling, and utility usage. No regulatory policy will work, however, unless governments make sure policies are actually implemented and follow up to determine that they are having the desired effect on corporate and individual behavior.

The country of Montenegro offers an example of how such a regulatory framework can work in practice. Montenegro voted for independence from Serbia less than two years ago, yet it is already experiencing a tourism boom. Hoping to avoid the kinds of problems caused by mass tourism in its more established Mediterranean neighbors, the country has put together a program for developing its travel industry that has sustainability, protection of nature, and ecotourism at its core. It includes transparent emissions taxation schemes, such as levying a surcharge on the emissions of cars entering the country; land use requirements designed to allow for the growth of tourism without jeopardizing natural beauty; and policies intended to attract investors with long-term perspectives, operating expertise, and a sensitivity and commitment to the impact of national tourism development.

Environmentally friendly projects that typically must be led by the private sector, such as transportation infrastructure, alternative energy production, and waste management, too often languish unless the government can convince companies to participate, either through regulation or, better yet, through incentives. When California enacted legislation to force the state’s largest industrial polluters to reduce their greenhouse gas emissions by 25 percent by 2020, the state created a carbon market that lets clean energy producers sell carbon credits to polluters who could not or would not reduce their emissions. The state also committed $3.2 billion to fund a drive to install solar panels on a million rooftops by 2018. Its largest corporate solar-power installation is now in operation at Oakland International Airport; it fuels 80 percent of the facility’s energy needs.

Of course, the best solution is to come up with a win-win for both the private and the public sectors, and for the environmental sustainability of a country’s travel industry overall. Rare as it may be, it can be done. In a determined effort to preserve its unparalleled cultural heritage and landscape, the Tuscan region of Italy has erected regulatory barriers to the construction of large resorts and provides incentives for restoring old farmhouses into small lodges for tourists. Italy is a prime example of a country that must work to improve the environmental sustainability of its travel industry. It ranks 28th in overall travel competitiveness, but just 39th in overall environmental sustainability, and a worrisome 113th in the sustainability of the development of its travel industry. The country has an outstanding global travel brand; tourists flock by the millions from all over the world to visit its exciting cities and beautiful countryside. Yet the results of the World Economic Forum report suggest that Italy must work harder to preserve its cultural and natural heritage — otherwise, its attractiveness as a destination may decline as other countries enter the global battle for international tourists.

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  1. Viren Doshi, Gary Schulman, and Daniel Gabaldon, “Lights! Water! Motion!s+b, Spring 2007: How to revitalize the crumbling infrastructure on which so many countries’ travel industries depend.
  2. Volkmar Koch, Jürgen Ringbeck, and Stefan Stroh, “Travel 2.0,” s+b Leading Ideas Online, 2/5/2008: The travel industry needs to develop a keen understanding of customer habits and tastes.
  3. Jürgen Ringbeck and Stephan Gross, “The Importance of Being a Must-See Destination,” s+b Leading Ideas Online, 5/8/2007: How a strong travel and tourism sector contributes to a country’s overall economy.
  4. World Economic Forum, The Global Competitiveness Report 2007–2008: An analysis of the global competitive environment.
  5. World Economic Forum, The Travel & Tourism Competitiveness Report 2007: View last year’s report to examine how the travel competitiveness of countries changes over time, sometimes rapidly.
  6. World Economic Forum, The Travel & Tourism Competitiveness Report 2008: Essential reading for anyone concerned with promoting the travel industry, or just being a tourist.
  7. The International Air Transport Association Web site: The airline trade association’s insider take on its contribution to environmental sustainability.
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