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Towards a green economy

by the predominance of smaller businesses. For example, close to 80 per cent of all hotels worldwide are SMEs (WEF 2009a) and, in Europe, this figure is 90 per cent.19 Additionally, providers of goods and services for the industry tend to be small, local businesses. Reaching out to such a wide variety of small businesses, across numerous sectors, continents and languages is a daunting task. Without information, knowledge and tools, greening will be nearly impossible. Nonetheless, engaging these critical actors is a necessary condition for a sustainable industry. In Nepal, for instance, incentives for private- sector participation in capacity-building events and the implementation of sustainable action plans have helped to increase their access to international sustainable tourism markets, improved project performance and stimulated interest among other companies in Nepal in sustainable tourism business practices, creating synergies throughout the industry (UNEP 2008).

Organisational management is a key element of business sustainability. According to By and Dale (2010), successful management of change (political, economic, social and technological) is crucial for the survival and success of tourism SMEs, particularly with the following eight critical factors: adaptability and flexibility; commitment and support; communication and co- operation; continuous learning and improvement; formal strategies; motivation and reward; pragmatism; and the right people (skilled and motivated collaborators). Kyriakidou and Gore (2005) argue that best performing SME operations in hospitality, tourism and leisure industry share cultural features such as cooperative setting of missions and strategies, development of teamwork and organisational learning.

Tourism businesses are no different to other businesses when it comes to the criteria that must be considered in deciding whether to invest in them. However, there are some specific characteristics that will affect tourism business costs (Driml et al. 2010):

■ Tourism businesses are relatively labour-intensive and therefore labour costs often make up the largest proportion of operating costs;

■ The cost of inputs for capital investment and operation are higher for remote locations;

■ The cost of capital will attract a premium if there is uncertainty about returns from investment in tourism;

■ The price of land in tourist-desirable locations will be governed by competition with other land uses which may be able to pay more (due to higher returns);

19. Available at www.hotelenergysolutions.net, accessed on September 30, 2010.

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■ Project planning and approvals cost will be high if assessment is lengthy or complex; and

■ Labour and land make up a high proportion of inputs and are subject to payroll tax and land tax.

A question is how to address these basic issues while making sustainable investment decisions. In this regard, the ITF-STD recommends that “tourism businesses and government institutions in charge of tourism should adopt innovative and appropri ate technology to improve the efficiency of resource use (notably energy and water), minimise emissions of greenhouse gases (GHG) and the production of waste, while protecting bio diversity, helping reduce poverty and creating growth and sustainable development conditions for local communities.” The business case for investing in these areas is sound. At the private-sector level, hotel owners, tour operators, and transport services can play a key role in protecting the environment and influencing tourists to make sustainable choices. Increased public environmental awareness, including traveller awareness, has contributed to the development of a host of voluntary industry initiatives and the definition of environmental performance at the national, regional and international

levels (UNEP 1998). Many larger

corporations are already addressing their environmental and social impacts. In many countries, SMEs account for the vast majority of businesses and can have a significant environmental impact; however, they tend to be more reactive to addressing environmental issues (Kasim 2009). Nevertheless, increasing pressure from consumers could force them to address more impacts in order to remain competitive.

Enabling conditions for engaging the industry 1. Tourism

promotion organisations, resource

management agencies and Destination Management Organizations (DMOs) should link tourism products (i.e. parks, protected areas and cultural sites) more closely with marketing positions. This will ensure a consistent and unique selling position in world tourism markets based on high-value experiences at natural and cultural sites in a compact geographical area.

2. Tourism industry associations and wider industry platforms play an important role in engaging tourism businesses in sustainability as well as developing practical tools to respond to many common challenges. As in most industries, the concept of corporate social responsibility (CSR) is increasingly recognised in the tourism sector and is being promoted by industry bodies, at the international as well as national levels. However, a formal response, including

measures such as triple-bottom-line

reporting, environmental management systems and certification appears to be prevalent only within

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