DKNA would like to express its gratitude towards Mrs Thea Chiesa, Editor of T&T Competitive Index 2013 for granting her permission to use the report as source. Comments and analysis by DKNA are preset by “DKNA”:
The World Economic Forum Tourism & Travel Competitiveness Index 2013 (WEF TTCI) has been released in March 2013. This is a Thailand focused analysis on environmental sustainability and its impacts on future hotel and tourism business-trends.
The Travel & Tourism Competitiveness Index (TTCI) aims to measure the factors and policies that make it attractive to develop the T&T sector in different countries. The TTCI is based on three broad categories of variables that facilitate or drive T&T competitiveness. These categories are summarized into the three sub indexes of the Index:
(1) the T&T regulatory framework sub index;
(2) the T&T business environment and infrastructure sub index
(3) the T&T human, cultural, and natural resources sub index.
Each of these three sub indexes is composed in turn by a number of pillars of T&T competitiveness, of which there are 14 in all. This analysis wants to focus on pillar No. 2 Environmental sustainability out of 14 pillars.
DKNA: Your attention is guided towards the location and allocation of “environmental sustainability” into the sub index: regulatory framework. It represents the view that environmental sustainability is the responsibility of government and therefor business will comply. The discussion however remains if this applies or not – particularly if one does observe the sub index of “Stringency of Environmental sustainability legislation”. The proverb “Nothing gets eaten as hot as it has been cooked” comes to mind, leaving opportunity standing alone in the room for the taking of “first movers” and visionary hoteliers.
Stable growth performance is the simple average of inbound tourism growth (the compound annual growth rate in the period of 2007–11) and the volatility of growth (the standard deviation of annual growth rates in the same period) per economy. Economies with high growth rates and low volatility rates score high, and vice versa.
DKNA: Environmental sustainability is one of the top 5 T&T Stable Growth Performance Score for developed and emerging economies combined. Viewing emerging Economies alone – environmental sustainability is the number one Stable Growth Performance Competitive Enabler.
Developing and fostering more varied forms of travel can transform Environmental sustainability from a regulatory burden to a true differentiator for tourism source markets. Policymakers, especially those in developing tourism destinations, should prioritize long-term sustainability to safeguard their natural and cultural assets because “green consumerism” has become a significant buying power in developed markets.
Key emerging tourist groups, including the well traveled retiring baby boomers, are demanding green travel offerings instead of traditional sun-and-beach vacations. A clear focus on greening the supply side of tourism as well as environmental conservation efforts on a national level will generate clear advantages over competing destinations.
Policymakers need to be able to consistently match long-term tourism master planning, short-term interests of multiple stakeholders, and external influences such as macroeconomic events or tourist demand changes to make tourism sustainable— economically and environmentally. To succeed, policymakers will need to manage the bottleneck of natural assets carefully to put economic yield and ecological footprint into a steady, stable state.
In Kenya, the Seychelles, and Tanzania, for example, ecotourism has gained traction in recent years, growing from a niche segment to a high-yield volume market. These countries preserve their natural assets for responsible tourism, which drives economic growth on both the national and local level.
DKNA: Examples closer to Thailand show a similar trend on the policy level. Point in case is the introduction in September 2012 by the Government of Myanmar and its Ministry of Hotel & Tourism release of the responsible tourism policy. This is matched with the recent launch of DASTA in Thailand. DASTA is a public organization and the acronym for “Designated area for sustainable Tourism administration.” Successful hoteliers however acknowledge that a pro active position is of advantage. Only awaiting the necessity to comply with new policies can be of financial disadvantage because the prices of required services to reach compliance will have been fixed by the time a new policy is launched.
Thailand is ranked 9th in the region of Asia and 43rd in an overall comparison of 140 countries. Thailand declines by only two places since the last edition, demonstrating some resilience to the natural disasters and political unrest with which the country has been grappling. Thailand is endowed with rich natural resources (ranked 82) and a strong affinity for Travel & Tourism (ranked 23rd and 18th, respectively), with a very friendly attitude of the population toward tourists (ranked 13th).
This is buttressed by the government’s strong prioritization of the sector, with good destination- marketing campaigns (11th) and relative price competitiveness (25th).
However, some weaknesses remain: despite the prioritization of the sector by the government, some aspects of the regulatory environment—such as the protection of property rights and the long time required for starting a business—are not particularly conducive to developing the sector (ranked 77th).
In addition, given the importance of the natural environment for the country’s tourism, environmental sustainability should be a greater priority (ranked 99th on this indicator).
Other ranks worth mentioning:
Average room rate, first class hotel: Rank 24 Value 101.3 USD
Natural Environment quality: Rank 82 Value 4.1
(Value: 1 extremely poor – 7 pristine)
Source: WEF TTCI – March 2013
The importance of the natural environment for providing an attractive location for tourism cannot be overstated, and it is clear that policies and factors enhancing environmental sustainability are crucial for ensuring that a country will continue to be an attractive destination going into the future.
The sub index pillar Environmental sustainability measures the stringency of the government’s environmental regulations in each country as well as the extent to which they are actually enforced.
Given the environmental impacts that tourism itself can sometimes bring about, it also takes into account the extent to which governments prioritize the sustainable development of the T&T industry in their respective economies. In addition to policy inputs, this pillar includes some of the related environmental outputs, including carbon dioxide emissions and the percentage of endangered species in the country.
2.01 Stringency of environmental regulation Score: 3.8 Rank: 78
How would you assess the stringency of your country’s environmental regulations?[1 = very lax; 7 = among the world’s most stringent] | 2011–2012 weighted average. Source: World Economic Forum, Executive Opinion Survey
2.02 Enforcement of environmental regulation Score: 3.6 Rank: 74
How would you assess the enforcement of environmental regulations in your country?[1 = very lax; 7 = among the world’s most rigorous] | 2011–2012 weighted average. Source: World Economic Forum, Executive Opinion Survey
2.03 Sustainability of T&T industry development Score: 4.9 Rank: 38
How would you assess the effectiveness of your government’s efforts to ensure that the T&T sector is being developed in a sustainable way? [1 = very ineffective—development of the sector does not take into account issues related to environmental protection and sustainable development; 7 = very effective—issues related to environmental protection and sustainable development are at the core of the government’s strategy] | 2011–2012 weighted average Source: World Economic Forum, Executive Opinion Survey
2.04 Carbon dioxide emissions Score : 4.2 Rank: 71
Emissions, metric tons per capita | 2008 According to the World Bank, carbon dioxide emissions are those emanating from the burning of fossil fuels and the manufacture of cement. They include carbon dioxide produced during the consumption of solid, liquid, and gas fuels and gas flaring. In the World Development Indicators, this indicator is labeled “CO2 emissions (metric tons per capita).” Source: The World Bank, World Development Indicators (September 2012 edition)
2.05 Particulate matter concentration (PM10) Score : 52.6 Rank: 103
Urban population–weighted PM10 micrograms per cubic meter | 2009 Particulate matter concentrations refers to fine, suspended particulates less than 10 microns in diameter (PM10) that are capable of penetrating deep into the respiratory tract and causing significant health damage. Data for countries and aggregates for regions and income groups are urban population–weighted PM10 levels in residential areas of cities with more than 100,000 residents. The estimates represent the average annual exposure level of the average urban resident to outdoor particulate matter. The state of a country’s technology and pollution control is an important determinant of particulate matter concentrations. Source: The World Bank, World Development Indicators (September 2012 edition)
2.06 Threatened species Score : 7.8 % Rank: 107
Threatened species as a percentage of total species (mammals, birds, amphibians) | 2012 This variable measures the total number of Critically Endangered, Endangered, and Vulnerable species as a percentage of total known species for mammals, birds, and amphibians. Source: The International Union for Conservation of Nature (IUCN), Red List of Threatened Species 2012
2.07 Environmental treaty ratification Score : 17/25 Rank: 96
Total number of ratified environmental treaties| 2012 This variable measures the total number of international treaties from a set of 25 for which a state is a participant. A state is acknowledged as a “participant” whenever its status for each treaty appears as “Ratified,” “Accession,” or “In Force.” Source: The International Union for Conservation of Nature (IUCN), Environmental Law Centre ELIS Treaty Database
The WEF TTCI list 26 trends for the Travel and Tourism industry for 2013. A key element of the background data is the participation of some of the major aviation organizations besides the travel community in its creation. Since the aviation is tightly linked with tourism their input is highly relevant. Listed are the two with most environmental sustainability relevance.
The inclusion of international aviation emissions in the European Union’s Emission Trading System, which caused political backslash in many countries, has been suspended on the premise that a global framework to regulate aviation emissions will be agreed on at the next International Civil Aviation Organization (ICAO) General Assembly in 2013. Will the ICAO General Assembly be able to deliver a global framework.
Zero environmental impact is the long-term goal to which eco-aviation and eco-hospitality aspire. The industry has done much to demonstrate its commitment to a low-carbon economy through the active demonstration of alternative, optimized operations such as retrofitting, recycling, and preserving rainforests and reforestations, but more needs to be done to integrate people into the process. The industry has done a fantastic job in talking to itself. But the public—customers and passengers—still perceives the industry as being a heavy polluter. Integrating passengers and customers as stakeholders in working groups to address this issue should become best practice for the future. If the public understands what they stand to benefit by reducing the environmental impact of Travel & Tourism, political barriers will be easier to remove.
DKNA: How do this trends influence Thailand’s Hospitality and Tourism? Should a Hotelier care and if yes, how?
Imagine that a major international organization provides your hotel with a large share of your corporate business. Further imagine that said organization adapts the strategy to become carbon negative or neutral by say 2020. This will without doubt have a huge impact on your future business if you, as the current General Manager is not laying the foundation for a comprehensive EMS (environmental sustainability management system).
The time factor is crucial as it takes approximately a minimum of 6 months to create the beginning of an EMS. A further consideration is that not all EMS are equal. I recommend to select a hospitality specialized EMS with international recognition such as EarthCheck.
Simply waiting for the corporate office to provide a guideline is another strategy, however the creation of such a guideline on the corporate level brings with it expenses for the corporate office, which can influence the comprehensiveness. An additional weakness could be that not everything what has been designed on a corporate level will fit the wide range of multiple brands, nor does it fit individual requirements of highly specialized operations.
With special thanks to Mrs Thea Chiesa, Editor of WEF T&T Competitive Index 2013