Higher Learning Research Communications – … Learning Research Communications – December 2012 ... of Glion Institute of Higher Education’s ... the top hospitality management

Higher Learning Research Communications – December 2012 Volume 2, Number 4

1 Special Issue on “Tourism, Hospitality and Leisure in a Globalized World”

Editorial

Academic research represents a milestone in the practice of quality higher education. Academics that consistently conduct and publish research in specialized disciplines develop leadership in their particular areas and nurture with new knowledge disciplines and professions. Certainly they strengthen the critical atmosphere in which students study and contribute to the reputation of the institutions in which they teach, and by segue attracting highly qualified students and new promising faculty into their programs. Ground-breaking knowledge is often developed at graduate degree programs, that is, after all, how the practice of academia grows its expertise. Research is a tool for both academia and industry, providing both the framework and opportunity to explore and discover new knowledge and ideas, and strengthening higher education by encouraging the continued debate and challenge of peer-to-peer collaboration. The special issue celebrates quality of research as a basis of higher education.

Since Higher Learning Research Communications focuses on policy and practice in higher education, we have dedicated this special issue to the practice of paramount research in specialized fields of study. This issue is published as a demonstration of how academicians and practitioners can work as peers to provide a global scope. As a festschrift of Glion Institute of Higher Education’s 50th anniversary, we dedicate this special issue to “Tourism, Hospitality and Leisure in a Globalized World”

Overlooking the magnificent Lake Geneva in Switzerland, Glion is one of the world’s leading schools of international hospitality education. Ranked among the top hospitality management schools in the world for an international career, and celebrated by the global hospitality industry, Glion has been at the top of higher education providers in this realm by recognizing early on that neither job experience nor books alone can grant a student a high-quality education. As this fast-paced, industrialized world increasingly requires schools to train their students with not only theoretical knowledge, but also practical, measurable, and technical skills, Glion has recognized this trend and integrated key components in its curriculum to confront the challenges and seize that opportunities that the school and its students will face.

Being a hospitality higher education institution, Glion has a strong business curriculum delivered by expert faculty members and is committed to continuously adapting its programs to meet the needs of the modern capitalist world. As with many other fields, market trends, governmental policies, eco-consciousness and innovative business practices have impacted the tourism industry. Guest Editors Ruth Rios-Morales and Ian Jenkins, both from Glion, were asked to put together a Journal Issue that represents the state-of-the-art research in the discipline. We hope you will enjoy this special edition – and whether you are involved in the hospitality and tourism industry or not, will recognize the quality of research that nurtures in a relevant manner higher education programmers in this field.

The Editors



Editors-in-Chief DENISE DEZOLT, Walden University, United States of America

CARLOS MUJICA, Universidad Andrés Bello, Chile JUAN SALCEDO, Universidad Europea de Madrid, Spain

Special Issue o Guest Editors

Ruth Rios-Morales, Les Roches University of Applied Sciences Ian Jenkins, Glion Institute of Higher Education

Senior Consulting Editors Drummond Bone, UK Richard Riley, USA

Joseph Duffey, USA David Wilson, USA Manuel Krauskopf, Chile

Editorial Advisory Board Agueda Benito, Universidad Europea de Madrid, Spain

José Joaquín Brunner, Universidad Diego Portales, Chile

Manuel Campuzano, Universidad Tecnológica de México

Simón Cueva, Universidad de Las Américas, Ecuador

Leopoldo de Meis, UFRJ, Brazil Orhan Erdem, Istanbul Bilgi

University, Turkey Ana Fanelli, CEDES, Argentina Carlos Enrique González,

Universidad del Valle de México

Halil Guven, Istanbul Bilgi University, Turkey

Daniel Levy, University at Albany -SUNY, USA

David López, The National Hispanic University, USA

Craig Marsh, Laureate Education, Netherlands

Rogerio Meneghini, Scielo/Bireme/PAHO, Brazil

David Post, Pennsylvania State University, USA

Germán Ramírez, Laureate Education, USA

Graciela Risco, Universidad Peruana de Ciencias Aplicadas, Perú

Jamil Salmi, World Bank, USA Susan Saxton, International

Baccaulaureate, Netherlands Simon Schwartzman, IETS,

Brazil Ned Strong, Harvard University,

USA Dominic Szambowski, INTI

Education Group, Malaysia Claudia Uribe, IDB, Washington,

DC Despina Varnava-Marouchou,

European University Cyprus Iris Yob, Walden University, USA

Executive Director Carmen M. Méndez, Laureate Education, USA Higher Learning Research Communications (HLRC, ISSN: 2157-6254) is published collaboratively by Walden University (USA), Universidad Andrés Bello (Chile), Universidad Europea de Madrid (Spain) and Istanbul Bilgi University (Turkey). Written communication to HLRC should be addressed to the office of the Executive Director at Laureate Education, Inc. 701 Brickell Ave Ste 1700, Miami, FL 33131, USA. HLRC is designed for open access and online distribution through http://journals.sfu.ca/liu/index.php/HLRC.

The views and statements expressed in this journal do not necessarily reflect the views of Laureate Education, Inc. or any of its affiliates (collectively “Laureate”). Laureate does not warrant the accuracy, reliability, currency or completeness of those views or statements and does not accept any legal liability arising from any reliance on the views, statements and subject matter of the journal.



Introduction

In the era of globalization, the economic contribution of the tourism, hospitality and leisure industry to the world’s GDP is significant. Tourism represents one of the main sources of income for many countries; tourism creates jobs, enhances exports and contributes to the economic welfare of a host country. Although the contribution of tourism, hospitality and the leisure industry in the era of globalization has been broadly recognized, there are also numerous challenges that this industry faces.

Higher Learning Research Communications is publishing this special issue with articles focusing particularly on the development of tourism, hospitality and leisure in the globalized world. The issue consists of a selection of 4 papers from authors that contribute to the understanding of recent developments in this industry, as well as strengths and weaknesses, threats and opportunities for the tourism, hospitality and leisure industry in the globalized world.

“Challenges and Opportunities of the World Tourism from the view Point of Ecotourism”, by Fredy González Fonseca, analyses the potential options of ecotourism as a key driver of sustainable economic development for local communities. Despite the benefits this sector presents to local communities in Mexico, the author argues that there is non-existent support from the national or local governments and no equitable tourism legislation protecting potential natural resources, which could be used for future ecotourism activities.

On “Economic Competition, Sustainability and Survival of the Dodo: The Eastern Island Case and the Tragedy of the Common Effects”, Pedro Moreira examines the results of a series of decision games obtained under a quasi-experimental design. Behavioral patterns were analyzed and extrapolated to explore the terminal effects of competition trends on the survival and economic viability of organizations and travel destinations in restricted environments.

Marina Mattera & Alberto Moreno Melgarejo write on the “Strategic Implications of Corporate Social Responsibility in the Hotel Industry: a comparative research between NH Hotels and Meliá Hotels International”. The study outlines the best practices of two leading Spanish hotel corporations: NH Hotels and Meliá Hotels International. By identifying actions undertaken by the most important firms of the sector, these hotels can serve as an exemplar and be replicated by other firms. The authors note that a firm can enhance their positive impact on their operating environment by increasing sustainability practices, improving understanding of the triple bottom line and minimizing negative social as well as environmental footprints.

Finally, “Lifestyle entrepreneurs: Insights into Blackpool’s small hotel sector”, by William Rowson and Conrad Lashley, examines branded chains that dominate sections of commercial hospitality provision. The study acknowledges that those managing small



accommodation properties, in the form of guest houses and small hotels, have more lifestyle ambitions for their commercial operation rather than classical entrepreneurial motives.

We would like to thank Carmen M. Mendez for all her support during the development process of this issue and also Higher Learning Research Communications for giving us this opportunity to publish the special issue. We thank all the reviewers for their assistance and support in the review process of the papers for this special issue.

Ruth Rios-Morales, Les Roches-Gruyè University of Applied Sciences

Ian Jenkins, Glion Institute of Higher Education


5 Gonzalez Fonseca – Challenges and Opportunities in the World of Tourism from the Point of View of Ecotourism

Challenges and Opportunities in the World of Tourism

From the Point of View of Ecotourism

Fredy González Fonseca

Universidad del Valle de México, Mexico ([email protected])

Abstract

This article emerges from the analysis of the data corresponding to the tourism

activity in the world and in Mexico, considering: the arrival of tourists and

international visitors, and the arrival of tourists in the North American region.

Subsequently, it is intended to place ecotourism as an option for sustainable

development, which helps generate additional income for local communities and

contributes to the protection and conservation of natural resources. The analysis of

global tourism in the above categories, in addition to the discussion about the

criteria and characteristics of ecotourism versus sustainable development, allows

us to visualize the potential that this activity poses to emerging economies such as

Mexico. The discussion about Ecotourism and sustainability shows that there is a

mutually beneficial relationship when the community is incorporated in the

development of ecotourism projects, as demonstrated in EcoAlberto Park.

Nonetheless, an activity that has no government support or equitable tourism

legislation, in addition to the absence of quality research, can overshadow any

potential natural resource to practice ecotourism activities in global markets

representing tourism.

Keywords: Global Tourism, Tourism activity in Mexico, Slow Tourism, Ecotourism,

Sustainability

Challenges and Opportunities in the World of Tourism from the Point of View of

Ecotourism

The development models that societies have adopted throughout the twentieth century

were characterized by encouraging industrialization and promoting economic growth, rather than

the maintenance of environmental goods and services provided by the ecosystems. In response

to this situation, the international community organized several forums to discuss the effects of

mailto:[email protected]



these economic development models, especially in the area of inequity in wealth’s distribution

and lack of natural resources care. 1

In this context, and as a result of these meetings since 1995, the Mexican government

signed a series of international agreements and pledged to promote a policy oriented towards

the conservation of existing biodiversity in the country, recognizing it as an essential wealth for

sustainable development and promoting the well-being of rural and native communities,

especially those settled in areas of environmental importance or subject to any protection

scheme.

The challenge for sustainable development through nature tourism in Mexico is how to

design a public policy directed towards the competitiveness of this sector at its national and

international level, which results in improved economic and social well-being for the communities

where corporations operate. In terms of concrete actions in the case of private companies, it

must maximize their social responsibility, while creating support and encouragement to maintain

and improve the quality of their operation. In addition, both communities and private companies

should generate actions to comply with the standards established in this area, and also seek to

obtain certification of service quality, both domestically and internationally.

The objective of this paper is to expound tourism challenges and opportunities in Mexico

from the point of view of ecotourism. To accomplish this, first it presents an overview of the

global tourism situation, placing Mexico in the same context and analysis categories, such as

international tourist arrivals and international visitors to Mexico. To introduce the principal topic

of the document, this is followed by the conceptualization of slow movement, ecotourism, and

mass tourism; the relationship between ecotourism and sustainable tourism; and their

characteristics according to several authors. Finally, it describes the potential of Mexico in terms

of ecotourism activities.

Analysis of world tourism in 2008

Tourism is a social phenomenon that promotes the movement of visitors to a region or

destination in the world with certain natural or artificial features aimed to leisure and rest. In

order to understand the trends in the tourism market, it is necessary to analyze what happened

in recent times, taking as a reference the year 2008 given its characteristics, and presenting

figures until 2011. Here is a brief summary of the most important events of world tourism,

focusing on 2008.

1 In 1972, the United Nations World Conference on Human Environment was held in Stockholm Sweden. In 1976, the United Nations

World Conference on Human Settlements (Habitat), Vancouver Canada. In 1987, the World Commission on Environment and

Development, Tokyo Japan. In 1992, the Earth Summit Rio de Janeiro Brazil. In 1995, the Programme of Action for Sustainable

Development was approved and developed. (Agenda 21)



The arrival and departure of international tourists in 2008 was influenced by

socioeconomic and geopolitical events, plus climatic conditions, without considering the implicit

constraints the tourism industry faces every day.

Some of the economic factors were not only characteristic of the year under review, like

the case of a major source market such as the U.S. and its mortgage crisis which began in

August, 2007. The crisis spanned over several years and spread to other financial markets in

the world and became a major international crisis, described by some analysts (UNWTO Panel

of Experts) as the worst since World War II. In addition, other elements such as the fight against

drug dealing, problems related to national security, and climate events such as hurricanes,

floods, or earthquakes affected to a greater or lesser extent some international destinations.

Derived from this, the World Tourism Organization (UNWTO) estimated that international

tourist arrivals recorded worldwide 922 million tourists in 2008, only 2.0% above the level

reached in the previous year (World Tourism Barometer). See Table 1.

Results obtained from the analysis on International Tourist Arrivals by Sub-Region (Table

1), have introduced a substantial change in the global tourism map, even though Europe

remains firmly in the first place in terms of tourist arrivals: 489 million, located at the bottom in

terms of growth rate (0.3%). This represents an important loss of percentage points when

compared with a growth of 10.5% obtained in 2007, reflecting that not only the American

continent was influenced by the financial crisis originated in the United States, but that it also

had an impact on the number of international arrivals to Europe.

Meanwhile, the Middle East, despite being the last in terms of tourist arrivals, 55.1

million, ranks first in terms of growth rate in 2008, which was 18.2% lower than the growth

experienced between 2006 and 2007, it means 23.3%.

The African continent is located in third place in terms of growth rate as 2008 recorded

46 million 600 thousand arrivals, 3.6% above the level reached in 2007. This growth is

particularly due to the low prices available in comparison to the Mediterranean region. In this

regard, the Panel of Experts from UNWTO estimates that factors such as economic crisis and

internal problems in the continent hinder the growth settle the arrival of international tourists

during the first half of 2009. (UNWTO World Tourism Barometer Vol. 7 No.1, January 2009).

The American continent, according to the mapping of the UNWTO, occupies the third

position with regard to its rate of growth in international tourist arrivals, but in contrast registers a

fall with 2.9% compared with the levels recorded in 2007. (UNWTO World Tourism Barometer

Vol. 7 No.1, January 2009)





Preliminary data indicates that Central America (Belize, Costa Rica, El Salvador,

Guatemala, Honduras, Nicaragua, and Panama) and South America (Argentina, Chile,

Colombia, Ecuador, Guyana, Paraguay, Peru, Uruguay, and Venezuela) had the best growth

rates, 6.4% and 3.5% respectively, in tourist arrivals.

On the other hand, the Caribbean can barely reach a growth of 2.0% compared with

2007, while for Canada, Mexico, and the United States, comprising the North American region,

an overall growth of 2.6% is likely. Regarding the above, and in accordance with the Panel of

Experts on Tourism of the UNWTO (World Tourism Barometer, 2008), it was possible to observe a

significant slowdown in U.S. tourism. Indeed, business travel declined due to a failure of low cost

flights, more than leisure travel.

Finally, in 2008, the Asia-Pacific region showed 1.2% in international tourist arrivals, very

poor results compared to the level reached in 2007.

International Tourism in Mexico

Despite the following circumstances: 1) the financial crisis, 2) the drop in tourism

movements worldwide, and 3) the tightening of immigration regulations, it is considered that the

influx of tourists to Mexico in 2008 showed a positive balance of 22,637.4 tourists,

corresponding to an increase of 5.9% over the previous year. (UNTWO Tourism Highlights 2009

Edition) See Table 2.

Worldwide, tourism in that year, according to the UNTWO Tourism Highlights 2009,

reflected a growth rate of 2.0%, a figure much below than the one recorded in Mexico. See

Table 1.

According to the Ministry of Tourism of Mexico’s database figures (DataTur, 2011), the

number of international visitors to Mexico registered in 2008 was 91,462.2 which reflects a

decrease of -0.8% compared to that recorded for the previous year. Continuing the trend, the

number of international tourists rose 5.9%. The contribution of inbound tourism was 2.7% growth

and 11% for cross-border tourism. Nevertheless, in the category of international hikers, there

was a decrease of 2.8%, especially noticeable in cruise ship passenger volume, amounting to

6,430.9 thousands a decline of 5.6%.

The downward trend in economic growth, combined with the current uncertainties

(extreme market volatility and decline in both consumer confidence and business), is expected

to continue to affect tourism demand, at least in the short to medium term.

Faced with these dark forecasts according to the Panel of Experts on Tourism of

UNWTO (Tourism Highlights, 2010) Mexico is the North American country that showed better

numbers at the end of 2008, a 5.9% improvement occupying first position in terms of growth,



followed by US (growth of 3.5% above 2007) and Canada, in third position, recording a

decrease of 4.4%. See Table 3.

Given the decline suffered by the Canadian market 4.4% due to the U.S. financial crisis,

which affected international tourist arrivals in this region, all the countries in the American

continent were positioned in third place with a 2.9% growth, surpassed by the Middle East and

Africa with 18.2% and 3.6% respectively. See Table 1.

It is clear that efforts to attract international tourism to the North American region must be

complemented by a serious search for new markets, besides promotion to existing destinations.

This requires joint and decisive action of the governments in the region. Such is the case of

ecotourism, with a strong environmental focus, which has positioned countries like Costa Rica,

Nepal, Kenya, and Canada, among others, as representatives favoring this type of activities over

conventional (mass) tourism or "sun and beach" tourism, as it is called. In the following sections,

we will address the so-called “slow tourism”, which is gaining strength in Europe, and consider

ecotourism as a special category of nature tourism and mass tourism.

Slow Tourism, Ecotourism, and Mass Tourism

The idea that ecotourism offers a fair deal to communities, providing financial rewards

and being useful to certain groups of influence, is a notion that is not far from the principles of

social justice and sustainability. This, actually, is the basis of the efforts of many countries

concerned by these issues. (Wearing & Neil, 1999).

Following the position of Fullagar et al. (2012), one of the components that can assist in

achieving some of the objectives mentioned above is what they call the "slow movement”

The “slow movement” concept stresses the issue of recovery and assessment of the

roots of many native and rural people, who have been powerless in the invasion of major

building projects at the hands of foreign investors mostly. The “slow movement” promotes the

return to the contact with nature through practices involving the total interaction of people with

the environment, without damaging or modifying its pristine condition. These experiences can be

translated into practice through activities with or without physical effort, based on a socially

responsible form of tourism, such as Ecotourism.

In order to make sense of the practice of traditional tourism (“sun and beach”) and orient

it towards productive goals, we must first review how it was generated through travel dynamics.

When local communities are involved in tourism-related interactions, the sense of belonging and

the desire to incorporate social values is made explicit and clear, improving tourism practices

that seek to appraise local over the foreign culture. (Wearing, Wearing, & McDonald M., 2012,

p.42). This behavior is evident when the community manages a kind of hierarchy, similar to

organizations, in an attempt to define their roles within the group of tourist services.





Table 1 Based on data from World Tourism Barometer Vol. 7 No. 3 October 2009; World Tourism Barometer Interim update August 2010; World Tourism Barometer Vol.10, March 2012 and UNWTO Tourism Highlights, 2012 Edition.

International Tourist Arrivals in North America

Region/Country 2007 2008 07/06 08/07 2009 2010 2011 11/10 (%) (%) (%)

(1000) (1000)

AMERICAS 142,866 147,847 5.2 3.5 141,697 150,707 156,600 3.9

North America 95,287 97,717 5.2 2.6 93,042 99,183 101,704 2.5

Canada 17,931 17,142 -1.8 -4.4 15,737 16,097 15,976 -0.8

Mexico 21,370 22,637 0.1 5.9 22,346 23,290 23,403 0.5

United States 55,986 57,937 9.8 3.5 54,958 59,796 62,325 4.2

These practices can be contrasted with reality, in projects like EcoAlberto Park (2011),

located in the state of Hidalgo, Mexico. It has achieved outstanding results in upholding their

socio-cultural heritage. This is handled in a clear hierarchical system with clear roles, highly

defined services, active participation of all families, and a community that stands as a great

example of the rescue of customs and cultural traditions. The Park’s managers are active

advocates of natural resources and a model of Ecotourism activities based on principles of

sustainable tourism2.

“Slow movement” can create a new sense of time, place, and experience in local

communities. For instance, “slow travel can create for tourist and host alike a different and

potentially deeper set of experiences in contrast to the fleeting and highly commodified tourism

[packaged] by many travel agents.” (Wearing et al., 2012, p.43).

According to Butler (in Scace 1993, p. 65), Ecotourism must meet the following criteria:

It must be consistent with a positive environmental ethics encouraging adequate

behavior.

It does not underrate the environmental resources, avoiding erosion of resource

integrity.

It concentrates on intrinsic rather than extrinsic values.

It is biocentric rather than homocentric in philosophy, in that an ecotourist accepts

Nature largely on its own terms, rather than significantly transforming the

environment for personal convenience. It must benefit the resource. The

2 Research Project conducted for the subject of Ecotourism and Sustainable Tourism, in the town of Ixmiquilpan, State of Hidalgo,

Mexico. 2011.



environment must experience a net benefit from the activity, although these are

often spin-offs of social, economic, political or scientific benefits.

It is a first-hand experience with the natural environment.

It must fulfill expectations of gratification measured in appreciation and education, not

in thrill-seeking or physical achievements.

It brings highly cognitive (informative) and affective (emotional) dimensions to the

experience, requiring a high level of preparation from both personnel and

participants.

According to Blamey (as cited in Weaver) with these criteria, we can distinguish three

elements that recur in ecotourism: Nature orientation, a learning-educational component, and

sustainability requirements. (2008, p.7).

The first component refers to ecotourism as nature-oriented. The ‘eco’ prefix is precisely

the term used to refer to “ecology” and “ecosystem”. According to Weaver, the condition of ‘eco’

recognizes that ecotourism does not need to be developed in a particular ecosystem or

habitat.(2008, p.10).

The motivation and the interaction between the visitor and the features often bring an

element of education, learning, or appreciation of the natural aspects as integral parts of the

ecotourism product. (Weaver, 2008, p.11). In this interaction, the tourist can be involved in a

learning process, often unintentional, but that ultimately generates an exchange of experiences

enriching both sides.

The last component refers to the term ‘sustainability’ that first appeared in 1987 under a

report of the World Commission on Environment and Development (UNWCED), “Our Common

Future”, better known as the Brundtland Report. In the Report, the Commission used the term

‘sustainable’ (or “sustainable development”), defined as “the one that meets the needs of the

present without compromising the ability of future generations to meet their own needs”.

(UNWCED, 1987, pt. 27). It implies a major change in the meaning of sustainability, mainly

ecological, and also a framework that emphasizes the economic and social contextual

development.

According to Newsome, Moore, and Dowling (2002), “tourism comprises either mass or

alternative tourism. The former is characterized by large numbers of people seeking replications

or their own culture in institutionalized settings with little cultural or environmental interaction in

authentic settings.” (p. 10). See Figure 1.



Figure 1 an overview of tourism Newsome, Moore & Dowling, 2002, p. 11).

According to Smith and Eadington (as cited in Newsome et al., 2002), “alternative tourism is

sometimes referred to as ‘special interest tourism’ or ‘responsible tourism’ and it is usually taken

to mean alternative forms of tourism which place emphasis on greater contact and

understanding between hosts and guests as well as between tourists and the environment” (p.

10).

TOURISM

MASS TOURISM

Traditional or Conventional

Tourism

ALTERNATIVE TOURISM

Specific interest of responsible tourism

OTHER CULTURAL NATURAL EVENT

Large number of tourists

usually in staged settings

Involves short term travel to

and from destination

Small number of tourists in

authentic natural or cultural

settings

Tourism in natural scenery

1. Adventure: emphasis on activity

2. Nature-based: primarily viewing of natural landscape

3. Wildlife: primarily viewing of wild life

4. Ecotourism: includes educative and conservation supporting elements



As Newsome et al. (2002) state it, “the primary goals of ecotourism are to foster

sustainable use through resource conservation, cultural revival and economic development and

diversification.” (p.14); although it is designed as a solution for local communities and its

definition is generally confused with nature tourism, ecotourism itself has a number of features

that give it a privileged status in sustainable development terms.

Newsome et al. (2002) emphasize that “ecotourism comprises a number of interrelated

components all of which should be present for authentic Ecotourism to occur.” (p. 15). They also

point to five key principles fundamental to Ecotourism:

Ecotourism is Natured- based,

It is ecologically sustainable,

It is environmentally educative,

It is locally beneficial, and

It generates tourist satisfaction. (2002, p. 15).

According to Dowling (as cited in Newsome et al., 2002), “the first three characteristics

are thought to be essential for a product to be considered Ecotourism, while the last two

characteristics are viewed as being desirable for all forms of tourism.” (p. 15).

For Newsome et al. (2002), “the educative characteristic of ecotourism is a key element

that distinguishes it from other forms of nature- based tourism.” (p. 17). A representation of this

characteristic can be found in EcoAlberto Park, located in the region of Ixmiquilpan (Hidalgo,

Mexico), where the community offers their visitors the opportunity to learn about their culture and

customs. This is achieved through exhibition of practical and active involvement as well as

wisdom deeply rooted in the location.

Although it is not a popular tourist destination in central Mexico, this park yet attracts

students, tourists and professionals who want to have a direct contact with Nature. They can

increase their knowledge about the ecosystem, the lifestyle of the community, and its services.

Emphasis is on the appreciation and enhancement of the natural heritage of the place. In the

words of the park manager during an interview with the person in charge of the Park

Administration, “what we have achieved is an interaction with various types of tourists where the

influence of natural environment has not only motivated and educated visitors themselves but

also the local community living in the area of influence, known as Los Albertos”.

Local benefits have quickly surfaced: with only seven years of operation, the park has been

able to generate income and decent jobs for the community, allowing the decline of the

phenomenon of migration to the United States (at least 70% of the original community).

(Interview with the Manager of EcoAlberto Park, 2011). Something that was impossible ten years

ago, when the main economic activity was focused on hunting, deforestation, handicrafts in a

small-scale, and inflows of money transfers from North America in the first place.



Sustainable Development and Sustainable Tourism

Going back to key terms in the creation and evolution of sustainable development, we

could emphasize: local communities, future generations, and availability of natural resources.

But how could we envisage the possibility of such a development when, according to the United

Nations Development Program (Fighting Poverty), more than 2.8 billion people, or about half of

the world's population, live on less than two dollars a day?

Reviewing the concept of sustainable development, a variety of interpretations

has emerged from the 90's. According to Hunter (2002), the debate of sustainable development

“has revolved around such inter-related issues as: the role of economic growth in promoting

human well-being; the substitutability of natural resource capital with human-made capital

created through economic growth and technological innovation; the criticality of various

components of the natural resource- base; the potential for substitution; the ability of

technologies and environmental management methods to decouple economic growth and

environmental degradation; the meaning of the value attributed to the natural world and the

rights of non-human species; and the degree to which a systems perspective should be adopted

entailing a primary concern for maintaining the functional integrity of ecosystems.” (p. 8).

All of these issues had been discussed in different debates, namely on “how best to

achieve, or strive to achieve, equity in the nature of opportunities to access natural resources

which create human well-being, and in the distribution of the costs and benefits (social,

economic and environmental) that ensue from the utilization of resources.” (Hunter, 2002, p.8).

However, it depends on whose perspective is adopted: the investor, the researcher, the

environmentalist, or the community itself.

The interpretations of human needs and desires vary from one extreme to the other,

forming the starting point of the debate about sustainable development. For instance, Williams

(as cited in Hunter, 2002) stresses that “under some interpretations of [sustainable

development], equity also applies across species barriers, in particular the inherent right of non-

humans to exist above and beyond any utilitarian value imposed by humans”.(p. 9).

Considering the real needs of human groups and their natural environment, we can at

this point highlight the vision of sustainable development and sustainable tourism as an

equilibrium; finding the right balance between the need for development and the need for

environmental protection.

Butcher (1997) (as cited in Hunter, 2002) developed a scathing attack on the whole

concept of sustainability, arguing that:

The denigration of human progress embodied in the sustainability paradigm is likely to

hold back humanity from facing up to and solving the problems of poverty and



underdevelopment. It is hence a far bigger problem than some of the troublesome by

products of unplanned tourism development. (p. 15).

This, indeed, is not the most pleasant postulate about the debate on sustainable

development and tourism, but it somehow leaves ample consideration about what constitutes

development or not. Assuming we represent different institutions or agencies in the public or

private sectors around the world, the discussion of sustainable tourism and its potential

compatibility with sustainable development continues its march, especially nowadays when

governments are seeking alternative economic development attached to the principles of

sustainability. Under the tutelage of the World Tourism Organization, direct efforts are promoted

by each continent towards green economies. By encouraging businesses that respect the

principles of sustainable development, perhaps in the operation of sustainable tourism from a

multidisciplinary approach, answers can be found.

According to Griffin (2002):

The emerging destinations of the less developed world are less likely to have their long-

term interests protected as tourism develops. Less developed nations are particularly

vulnerable for a number of reasons. They possess environmental and cultural features

that tourists from the developed world wish to experience, given the right health, safety

and security conditions. [….] If sustainable development is open to interpretation and is a

multidimensional concept incorporating economic, sociocultural and ecological

considerations, the less developed nations are understandably likely to place higher

priority on the economic dimension. (p. 28).

The growth of tourism is inevitable; however, as Griffin points out, emerging economies

often do not have the budget to develop tourism projects that respect the principles of

sustainability. (2002, p.29). Therefore, to attract capital, they offer a wide variety of concessions

such as reduced taxes, free access to land purchase, ease to obtain licenses for land use, and

fewer restrictions on environmental matters. (Griffin, 2002, p.29). For this author, “the result can

be a failure to capture much of the income stream generated from tourism”. (Griffin, p.29).

However, although “there is no easy solution to this dilemma, […] ironically it may lie in the

growth of tourism itself. (Griffin, 2002, p.29).

The globalization phenomenon, the destination marketing, the accessibility of these

attractive rates and solutions for all markets is generating massive displacements of international

tourism, which often go against the parameters of sustainability and equitable development

much discussed in the early 90's. For this reason, “it is far more difficult to be optimistic about

the prospects of tourism developing sustainably in less developed nations than in developed

ones.” (Griffin, p.30). Furthermore, “[t]he need for economic development is far more urgent, and

the political and legal means for controlling tourism and its impact far less evident.” (Griffin,

p.30).



The transfer of knowledge will be a cornerstone for the sake of recovering global

experiences in sustainable tourism, especially in emerging economies, and this will depend

largely on the politics in each country, regarding education and research.

Ecotourism in the Globalization Era

Ecotourism is a planned tourism process in its development, interrelationship, and

interdependence with the environment. (Chavez, 2005, p. 66; trans. by author). This means that

it is closely related to sustainable development as it consciously analyzes existing resources in a

given area. It also plans the best development for local communities, ensuring thus human

welfare and conservation of the environment, without compromising or jeopardizing the ability of

future generations to satisfy theirs. (Drumm & Moore, 2005).

The mystery of globalization has allowed many political barriers to disappear, and caused

and satisfied an opening of knowledge in terms of civilization. Due to the advances in

transportation and information technology, even the most remote places on Earth are getting

within reach of the traveler. Tourism is, in fact, the world's largest industry and nature-oriented

tourism is the fastest-growing segment.

The travel motivations of tourists can come from a range of possibilities, from a simple

photo, to direct contact with nature, communities, culture, and education. Ecotourism is a type of

nature tourism, where the enjoyment of activities, the respect for nature and the protection and

conservation of the environment are top considerations. (Newsome).

This higher appreciation of the natural experiences has determined the setup of a new

travel ethics that is now called ecotourism. The term has gained popularity in the fields of

conservation and travel, but what does it mean, exactly? The Nature Conservancy has joined

the World Conservation Union in adopting this definition of Ecotourism:

Environmentally responsible travel and visitation to natural areas, in order to enjoy and

appreciate nature (and any accompanying cultural features, both past and present) that

promote conservation, have a low visitor impact and provide for beneficially active socio-

economic involvement of local peoples [sic]. (as cited in Drumm).

Currently, most tourism activities that take place in natural areas do not constitute

ecotourism and, therefore, are not sustainable. (Ceres Ecotur). Ecotourism is distinguished from

simple nature tourism by its emphasis on conservation, education, traveler’s responsibility, and

active participation of the community. (Ceres Ecotur). Specifically, ecotourism is characterized

by the following features:



Visitor behavior is conscious and causes low impact,

Sensibility and appreciation with respect to local cultures and biodiversity,

Support for local conservation efforts,

Sustainable benefits to local communities,

Local participation in decision-making, and

Educational components for the traveler and local communities. (Ceres Ecotur).

It is evident that the increase of tourism in sensitive natural areas may become a threat

to the integrity of ecosystems and local cultures, if not carried out in accordance with proper

planning and management. The growing number of visitors to areas with sensitive ecosystems,

from the ecological point of view, can cause considerable environmental degradation. Likewise,

the massive influx of visitors can hurt in many ways native cultures. Moreover, variations in

climate, exchange rates, and political and social conditions may determine that the reliance on

tourism is becoming a risky business. (Project Report on Eco-system)

However, the same growth creates significant opportunities for conservation and for the

benefit of local communities. Ecotourism can yield much-needed revenue for the protection of

national parks and other natural areas, resources that could not be obtained from other

sources(Project Report on Eco-system). Similarly, ecotourism can offer a viable alternative of

economic development to local communities that have few options for income generation. Also,

it can generate a more responsible education and activism among the visitors, turning them into

more enthusiastic and effective conservation agents.

Potential for Ecotourism Activities in Mexico

According to a study conducted in Mexico (Centro de Estudios Superiores en Turismo

[CESTUR], 2001) that was unique in its field, by the beginning of the millennium the impact of

ecotourism and adventure tourism3 was the following:

The value of the annual formal ecotourism and adventure tourism activities

exceed$750 million Mexican pesos, and 442 companies were identified as operating

ecotourism and adventure tourism.

Spending by international tourists represented 64.2% of the total, equivalent to $486

million Mexican pesos, while spending by domestic tourists represented 35.8% of the

total, equivalent to $271 million Mexican pesos.

Domestic tourists made 667,091 formal practices of ecotourism and adventure

tourism, which accounted for 45% of all practices.

The total expenditure by international visitors in ecotourism and adventure tourism,

$51.2 million in US dollars4, represented 0.62% of the $8.295 billion US dollars in

revenue generated by visitors in 2000. (p. 3).

3 Those trips made by people motivated to experience challenges posed by the nature, regardless of their athletic prowess.

4 Currency exchange: $9.5 MXP per USD (October 2000)



According to Sandoval (2006), ecotourism is currently the tourist segment which shows

the strongest growth. (p. 11). As a result, in recent years, a large number of tour operators have

entered the world of alternative tourism5. (Sandoval, 2006, p. 11). However, the impressive

growth in developing countries of this new type of tourism is but a response to the need to

generate economic growth alternatives that produce monetary benefits in regions undergoing

profound economic crises. (Sandoval, 2006, p. 11). On the other hand, a more conscious

attitude of many tourism businesses and international organizations (Sandoval, 2006, p. 11),

such as the World Tourism Organization (UNWTO) and United Nations (UN) itself, led to

establish 2002 as the International Year of Ecotourism, celebrated at the World Summit on

Ecotourism6, held in Quebec between 19 and 22 May, 2002. (UNWTO, 2002).

Just a few days before World Tourism Day and their General Assembly in 2009, the

UNWTO indicated that:

Raising the profile of tourism in both the political and public perception is a critical

element in increasing awareness of the sector’s economic potential as an efficient

provider of employment and the way forward to the Green Economy.

More than 900 million international tourist arrivals per year generate millions of

jobs. Travel and tourism is one of the few sectors that cuts across the economy

mobilizing employment, investment and sustainable development opportunities for

emerging economies. (UNWTO, 2009).

Mexico’s potential in the development of ecotourism activities should be accompanied by

structural reforms in the tourism legislation, increasing proposed protected areas and supporting

local initiatives for development of ecotourism projects.

Clearly, a local system like ecotourism is a concerted effort to promote economic growth

for the area, within a framework that includes human development, social integration, and

environment harmony. This explains why this activity has raised the interest of the Mexican

Public Administration as a strategy to promote local development in marginalized regions.

The design of ecotourism as a sustainable development strategy promoted by the Public

Administration, is the result of planning and control, aiming at transforming the traditional areas

from individual to associative. In other words, it goes from totally unrelated zones to “globally

local” development regions. This is, therefore, the reason for an adequate implementation of

ecotourism as a development strategy. The Municipal Management should be part of the local

development, which means, according to what Borja and Castells (1998) state, the new frontier

of urban management is able to prepare the city to meet the challenges of global competition.

(p. 14).

5 In this new model, the traveler was looking for non-repeatable and unique experiences in a quality environment.

6 To get more information:http://www.cinu.org.mx/eventos/turismo2002/doctos/dec_quebec.htm



Conclusions

The environmental, along with the demographic issues, are concerns that prevailed

during the second half of the Twentieth Century. They have raised questions which have

evolved in all shapes or forms that, in the first decade of –the Twenty-first Century, these

countries are accepting or rejecting. A clear example is the group of nations led by the United

States competing for the exploitation of natural resources. The case of the Space Race or the

ownership of the Antarctic "for research purposes" sums it up.

It is clear that tourism could not stay out of this trend, for its economic and social impact

positions it globally as a key priority for the late Twentieth and early Twenty-first centuries. The

fact that the World Tourism Organization (UNWTO) became a specialized Agency of the United

Nations (UN) in October 2003 indicates this.

A latent concern for the environmental subject has led governments of emerging

economies like Nepal, Costa Rica, and Kenya, among others, to encourage public policies which

favor the development of ecotourism projects, linked to the situation in each locality. This view,

that began more than a decade ago, has given positive results in positioning these same

countries as leaders in the practice of ecotourism worldwide.

It is known that the development of traditional “sun and beach” tourism, lacks an

appropriate methodology for planned growth. Such is the case of “sun and beach” destinations

like Puerto Plata (Dominican Republic), Acapulco (Mexico), and Cartagena (Colombia), which

have been at the mercy of foreign investors in huge resorts. The boom has caused progressive

degradation of the beaches, water pollution, and underemployment7 in the regions where they

operate, and a total ignorance of the needs of the communities where hundreds of resorts do not

teach the slightest attachment to the principles of sustainable development.

It is urgent for Mexico to promote, plan, and control tourism aimed at economic, social

and environmental balance. The philosophy of tourism actually ties in perfectly with the

principles of the Mexican Constitution, in terms of leisure and social recreation for its population.

However, low cost and massive tourism may affect, and actually have a highly negative impact,

on habitats and local communities.

In government programs and plans, the subject of ecotourism remains a pressing need to

address, but guidelines and specific actions fail to trigger the activity. Ecotourism is a “product in

the stage of birth”, and it is imperative to create a culture towards ecotourism in those local

regions as well as in international tourist markets.

7 The statistics on employment, define people who do not work a minimum number of hours of week, work sporadically for a few

days a year or without sufficient regularity, the under employee. http://www.eumed.net/cursecon/dic/S.htm

http://www.eumed.net/cursecon/dic/S.htm



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23 Pedro Moreira - Economic Competition, Sustainability, and Survival Endurance: the Extinction of the Dodo, the Easter Island Case, and the Tragedy of the Commons Effect

Economic Competition, Sustainability, and Survival Endurance: the Extinction of the Dodo, the Easter Island Case, and the Tragedy of the Commons Effect

Pedro Moreira Institute for Tourism Studies, Macau SAR, PR China ([email protected])

Abstract

A fast developing industry worldwide, tourism demands a monumental extent of resources, and at times devastates and condemns the very own environments that are fundamental to the economic survival of organizations and the sustainability of travel destinations. The purpose of the study is to link three established scientific themes on survival and sustainability to empirical results in the field of economic decision and behavior. The discussion of this link may also represent the originality value of the paper. Departing from the results of a series of decision games obtained under a quasi-experimental design, behavioral patterns were analyzed and extrapolated to explore the terminal effects of competition trends on the survival and economic viability of organizations and travel destinations in restricted environments. The findings show that the identified competition tendency neutralized an important share of the economic potential offered by the decision game, with significant negative effects on the economic efficiency. If persistent, the competition tendency is expected to produce long term effects on the sustainability and economic survival of organizations and travel destinations in restricted environments.

KEYWORDS: Economic competition, sustainability, economic survival endurance, restricted environments, travel destinations

Introduction The travel and tourism industry, and specifically the business tourism operations

related to meetings, incentives, conferences, and exhibitions (MICE), are frequently considered strategic vectors in the development of cities as travel destinations, though frequently colliding with sustainability concerns, concerns that are even more justified when organizations and travel destinations operate in restricted environments.

Restricted environments are defined as environments characterized by conditions that

generate especial vulnerability to extreme competition and to collapses caused by the depletion of resources. These are environments with inherently unstable equilibriums and higher risks to the economic survival of organizations, and in the limit to the economic survival of a whole city as a travel destination.



The study's main research question focuses on the dominant tendency or behavioral

pattern found in a decision game with competition versus cooperation alternatives, and on the implications of that dominant tendency to economic efficiency, sustainability, and survival endurance. The purpose of the paper is to present a summary of relevant theories and cases on competition, survival, and sustainability, and to discuss the implications of the research findings on the economic survival endurance of travel destinations in restricted environments.

The first section includes a review of the literature and the presentation of three

established scientific themes on survival and sustainability: the extinction of the Dodo; the Easter Island case; and the tragedy of the commons effect. The next sections describe the methodology and the results and data analysis. The last two sections include a discussion of the results and of the themes presented, followed by the conclusions and implications of the study.

Organizational Ecology, Restricted Environments, Systems Overload, and Systems

Collapse

“It remains to be studied how the interaction of dispersal, local adaptation, and plasticity determines the demography and evolution of a species across space, when the environment also changes in time.” (Chevin & Lande, 2009, p.1149)

“Time, the denominator of economic value, eventually renders all advantages obsolete.” (Williams, 1992, p.29)

A fast developing industry worldwide, tourism demands a monumental extent of

resources, and at times devastates and condemns the very own environments that are fundamental to the sustainability of destinations and the economic survival of organizations. Business tourism operations related to meetings, incentives, conferences, and exhibitions (MICE) are frequently considered strategic vectors in the development of cities as travel destinations, and frequently collide with sustainability concerns. Business events are concentrated in time with a very intense demand for resources in a minimal period, and create conditions that may lead to systems overload and, in the limit, to systems collapse. In this paper, system overload is understood as the submission of a system to demands that exceed the limits of adaptation. System collapse, in the sense of human or organizational populations, is defined as a drastic decline in the population figures which stabilize far down from the highest levels reached in the past.

Butler (2010, 1980) focused on the parallels between the concepts of tourism area life

cycle, sustainable development, and carrying capacity to discuss the risk of exceeding development limits and the importance of reaching a state of sustainability. The first argument on the difficulty of achieving this state of sustainability is the absence of knowledge and control over destination limits, tourist flows, and industry development and operation that exists in most destinations. According to Butler (2010, 1980), both the concept of tourism area life cycle and the concept of sustainability demand for stabilization or growth stop on approach to the carrying capacity limits. Exploring more specific elements, Liu (2003) distinguished five dimensions of carrying capacity: (1) physical, related to the maximum number of visitors; (2) ecological, related to the effects on the environment and on the sustainability of the natural resources; (3)



psychological, involving the perceptions of tourists; (4) social, including the sociocultural impacts; and (5) economic, linked to financial performance and development opportunity costs. Clarke (1997) identified four approaches to sustainable tourism: (1) sustainable tourism versus mass tourism, opposing a small and sustainable scale against a large and unsustainable scale; (2) continuum between sustainable tourism and mass tourism, refuting a fundamental difference; (3) sustainability as the real focus instead of scale, with the argument that mass tourism could be sustainable; and (4) convergence of the scale extremes with sustainable tourism to be applied to all scales of development. In our view, Clarke’s four approaches can also be considered as a stages sequence, and we suggest that this idea could be investigated through historical studies over the past routes and characteristics of development on destinations that reached already a wide and mature range of sustainable travel and tourism operations.

The literature includes some degree of criticism about the state and the direction of the

theoretical trends, as Hardy, Beeton, and Pearson (2002) argued that sustainable tourism is still excessively focused on environmental and economic aspects in detriment of social factors. There are also some positive notes, as Butler (2010) pointed out that although “there are very few examples of a successful long term application of sustainable tourism principles at a destination level, [….] there are many examples of successful short term applications of sustainable development principles at a facility level” (p.12). In the end, the reality check supports higher expectations of success in small-scale short-term applications than in large-scale long-term applications of the sustainability principles. Nevertheless, while affirming the importance of the concept of sustainable tourism to respond to negative impacts of tourism and safeguarding a long-term viability, Liu (2003) has argued in favor of a systems perspective of the theme, consistent with the macro approach proposed by Wheeller (1991), and with the integration of economy, society, and environment proposed by Farrell (1999).

In a restricted environment, the disappearance of a single crucial resource might result

in the collapse of an advanced society (Foot, 2004; Flenley, 1993). Restricted environments are more sensible to minor fluctuations of the available resources, and a marginally supportable population in one decade may become excessive in the following decade (MacIntyre, 1999).

In economies dominated by travel, tourism, and adjacent industries as MICE (meetings,

incentives, conventions, and exhibitions), restricted environments are thought to: (1) be more fragile and vulnerable to the fluctuations of the demand and the evolution, mutation and rotation of markets; (2) support lower limits in carrying capacities and adapt less effectively to the impacts of high numbers of arrivals; and (3) operate under higher risks for the sustainability and the survival of organizations and the travel destination overall environment. In early stages of development, the increase of the population can be seen as a basic and pragmatic solution to respond to an increasing number of arrivals, but this solution is not a solution of efficiency and is especially dangerous the more restricted is the environment. Growing population and shrinking resources are a combination for collapse (Foot, 2004) in restricted or isolated environments, and the dangers of system overload and collapse may even be accentuated by slow, gradual changes and distorted perceptions of risk (Moreira 2009a, 2009b, 2008, 2007a, 2007b). Finally, the environmental systems overload should not be considered independent of the economic and social systems overload and, as Foot (2004) noted, the “environmental collapse can precipitate economic and social collapse” (p.12).



Restricted environments (Moreira, 2011a, 2011b, 2011c, 2010) face higher risks under conditions of travel and tourism market demand variation, overload of the carrying capacity, and resources scarcity. The development of specialized economies, especially in the stages characterized by rapid and powerful growth, can also enhance the competition between organizations for the access, control, and final share of the critical resources. The degree of change and transformation that has been imposed to the environment in the last millennium, and especially in the last century, is a stern reminder that the exceptional human potential for competition and destruction should never be neglected. Even when considering humans at the most basic animal level, “industrial humans are the most voracious predators in the world’s oceans and, simultaneously, the most successful terrestrial carnivore ever” (Rees, 2005, p.15).

A population collapse could be understood as a drastic decrease in the population size

or complexity over a significant area and a prolonged time (Diamond, 2005) or, in our definition, a drastic decline in the population figures which stabilize far down from the highest levels reached in the past. Populations’ survival and development, in either human or organizational populations, depend on the equilibrium of primary resources. In organizational ecology, primary resources include survival, infrastructure and energy basics, physical space, access, human population to guarantee market and organizational members, and some degree of environment stability. These critical conditions are especially important in restricted environments due to the inherent fragilities of these systems, in which eccentric variations could initiate processes of economic decline and population collapse. Accordingly, this paper defends three fundamental ideas: (1) economic growth is not infinite or unlimited; (2) the sustainability of economic growth depends on the final state of sustainability of a destination; and (3) the intelligent use of resources and the monitoring of the natural limits are core elements of sustainable development in travel and tourism destinations. The following sections present three established scientific themes on survival and sustainability that will be later reanalyzed in view of the research empirical results.

The Extinction of the Dodo

The last confirmed sighting of the dodo in the Mauritius islands was reported by Evertsz in 1662 (there are also records of later captures of a dodo by Lamotius in 1668 and Hugo in 1673), and the extinction time was estimated statistically close to 1690 (Cheke, 1987, 2001, 2004; Turvey & Cheke, 2008; Fuller, 2002; Roberts & Solow, 2003; Hume, Martill & Dewdney, 2004).

The case of the dodo is still one of the most enigmatic cases of population extinction.

One of the first species confirmed extinct, the dodo case is linked to the understanding of the extinction processes (Turvey & Cheke, 2008). In biology, it is now accepted that abrupt changes of the environment conditions can represent a risk of extinction if the populations are unable to adapt or relocate to another geographic range (Chevin & Lande, 2009).

The extinction of the dodo is the result of a combination of factors. The most important

of these factors are perhaps related to the benevolent conditions of the environment that allowed disfunctionalities to accumulate over time in the absence of evolutionary pressures, and the impossibility of relocation due to the restrictions and isolation of the environment.



One of the characteristics of the environment that is relevant to establish parallels with the field of organizational ecology is the evidence that the environment was restricted and isolated for a long time, and that the stability of the conditions was then disrupted with the entrance of new populations. It is true that the new populations included predators but, even without the direct threat the predators represent, if the environment is fundamentally restricted, new populations always have the negative effect of increasing the demand for resources, including geographic area.

Resource Degradation and Population Collapse at Easter Island

The environment degradation process on Easter Island was a gradual process (Zebrowski, 1997) and may have lasted for several human generations. The persistence of the error was extreme and the last tree went down most probably with the awareness that it was the final cut. As Flenley described it:

[…] it’s a fairly small island. You could stand on the summit of Easter Island and see the whole place. The person who cut down the last tree must have known that it was the last […] but they still cut it down. (As presented by Renouf, 2003).

Furthermore, as Bahn and Flenley (1992) stated:

The person who felled the last tree could see it was the last tree. But he (or she) still felled it. This is what is so worrying. Humankind’s covetousness is so boundless. Its selfishness appears to be genetically inborn. Selfishness leads to survival. Altruism leads to death. The selfish gene wins [...]. (p. 214). The orthodox view of the human origin of the Easter Island disaster has been contested

(Rainbird, 2002; McCall, 1993; Orliac & Orliac, 1998; Haddon & Hornell, 1975; Van Tilburg, 1994; Langdon, 1995), but independently of the causes, the circumstance that an isolated restricted environment is more vulnerable to collapse seems consensual. According to Foot (2004):

On Easter Island the trees gradually become fewer, smaller and, as society adapted, maybe less important. The last palm disappeared around the mid-1400s, yet the real crisis did not appear until a century later by which time it was too late to do anything about the loss of the forest. (p. 17). For Brander and Taylor (1998), “the economic record in Easter Island is one of rising

wealth and rising population, followed by decline” (p. 121). One of the explanations to the Easter Island human population evolution is the degradation of a slow-growth resource base due to population growth and the consequent population decline. The specific palm tree that existed in Easter Island (Jubea chilensis, the Chilean wine palm) is a very slow-growing palm taking 40 to 60 years to reach the fruit-growing stage, which along with the unfavorable rainfall and temperature are the initial conditions contributing to the decline of the resource (Brander &Taylor, 1998). A hypothesis considered is that, with a faster-growing resource base, the population and the resource stock may have converged to a stable equilibrium over time (Brander & Taylor, 1998).



Two questions noted by Rainbird (2002) have special relevance to economic competition and development: (1) Is landscape change a natural or a cultural product? (2) Is the landscape change a degradation of the environment or an enhancement? When analyzing phases of extreme development in restricted environments as travel and tourism destinations, the same questions emerge related to economic, social, and environment stability and sustainability.

The Tragedy of the Commons Effect

The tragedy of the commons effect is the rational drive to deplete indefinitely finite resources pursuing individual utility (Hardin, 1968, 1998). When the maximum sustainable population is reached or the decision and behavioral patterns are non-sustainable, the collapse of population, economy, and society is inevitable (Foot, 2004). Barnett and Adger (2007) have argued on the security consequences of climate change affecting and reducing the access and the quality of vital natural resources, through “the prospect of conflict stimulated by changes in social systems driven by actual or perceived climate impacts” (p. 640). Homer-Dixon (1993, 1994) presented evidence from several cases linking environmental scarcities and violent conflict, and identified three principal sources of human-induced scarcity: (1) reduction of the quantity or quality of renewable resources; (2) population growth; and (3) resource distribution anomalies and concentration of resources.

The Malthus law of population asserts that population growth is limited by the means of

subsistence (Malthus, 1993; Barrows, 2010; Brander, 2007). Referring to an analysis by Brander and Taylor (1998) on the history of Easter Island using the Malthusian model, Brander (2007) stated “recent work has shown formally that Malthusian demographics in the presence of renewable resources can give rise to cycles in living standards and population” (p. 4). Brander (2007) further explained that “the Malthusian cycle of abundance and privation, leading to population expansions and declines, is a fundamental aspect of human history” (p. 5), and that “the most fundamental sustainability factor is demography, as originally identified by Malthus in 1798 (p. 36).

The primary forces in the fluctuation of populations’ numbers are the natality or the birth

rate, the mortality or the death rate, and the migration or the location transference of individuals in the population. The environmental factors are considered secondary factors, which influence is reflected in the fluctuations of the primary factors (Pearl, 1927). There is however evidence that both the primary and the secondary factors affect the human populations and the populations of organizations. Archaeological and anthropological evidence has been revealing a consistent pattern of economic and population growth, resource degradation, and subsequent economic decline (Brander & Taylor, 1998). Resource degradation is understood as a common force of decline in major civilizations of the past (e.g. Mayan; Anasazi; and Akkadian, Babylonian, and Sumerian in ancient Mesopotamia) and modern population collapses (e.g. Rwanda after 1950), with a major influence from population growth, human activity, and endogenous resource degradation at times combined with exogenous climate fluctuations or other environmental changes (Brander & Taylor, 1998).

Applying the theoretical framework to populations of organizations, parallels are found

in Lenox, Rockart, and Lewin (2007) with the discussion of the evolution of an industry or a population of organizations through the concept of shakeout:



[…] a rise and fall in the number of competitors over time. Following the inception of an industry, new entrants rush in, often driving up the rate of innovation and leading to a diverse set of ways to deliver value. Competition intensifies and industry exit increases. Over time the rate of entry decreases, eventually stabilizing at a low level. As a result, the number of firms within the industry grows exponentially at first, then peaks, and then declines, typically settling in with a few dominant firms. (p. 599).

On a final note and consistent with the destination life cycle model (Butler, 1980, 2010), one of the conclusions of Gort and Keppler (1982) suggested that in new industries at some stage the number of organizations will significantly decline.

If there is a resource limit and this limit is an invariable limit, the natural behavior

tendency is competition. The competition level will tend to rise as the resource levels decrease, ending in scarcity as a result of lower total levels of finite resources and insufficient recovery time for renewable resources, population growth, and resource distribution fluctuations resulting from access control or resource concentration.

The following sections will present the experimental methodology details of a research

decision game and the data collected in the first experimental trials. These results are expected to contribute to the understanding, at a fundamental level, of the strong tendency to competition that might be responsible for some of the efficiency deficits of human and organizational populations, and for some of the risks of decline and collapse discussed.

Methodology

The first data series collection including these 52 trials of the decision game took place

in Macau SAR, PR China, between 2006 and 2011. The composition of the teams playing the game varied from 2 to 6 team members, and all the subjects were at the time first year college students in management majors. The decision game used in the research methodology is a basic competition versus cooperation game. The objective of the game was stated as follows: Each team should try to win the biggest amount of money possible (no real money is involved, the amounts are reflected by the scores). The game had the following rules:

The game is played in ten moments, by two teams at a time. In three of the moments

negotiations will be held between the teams’ delegates. These moments are the 3rd, the 5th, and the 8th play. Besides these three moments there is no communication between the teams during the game.

The teams are free to choose the team leader and the negotiators.

Each play consists on a simple decision, between red and black.

After both teams finished writing the decision on a paper, the decisions are announced and the scores are written on a whiteboard, including the scores for each play and the cumulative scores. The information in the whiteboard is always accessible to both teams during the game.



Scores: If team A chooses black and team B chooses red, team A loses 10 (scored as -10) and team B wins 140. If team A chooses red and team B chooses black, team A wins 140 and team B loses 10 (scored as -10). If both teams choose black, both teams win 100 each. If both teams choose red, both teams score 0 each.

Resulting from the game competition versus cooperation decision options, the possible

final results of the interaction between the two sides are of four types. Competition processes origin three of these, or 75 percent of all the expected results (win-lose, lose-win, and lose-lose) while cooperation generates only one, or 25 percent of all the expected results (win-win). Yet, a cooperation result is beneficial for both sides, strengthens the likelihood of positive future interactions, and tends to extend all the gains closer to the possible limit, increasing the total generated by the game. The a priori likelihood of cooperation versus competition is however of only one to three. Besides that, to achieve a cooperation result both sides have to decide to cooperate, while if one of the sides decides to compete there is no other acceptable option to the other side to stop losses but to engage in competition.

Results and Data Analysis

In this set of results, each time the game was played or, in other words, each time an

opportunity was presented, the average total generated by the game was 755 out of the possible limit of 2000. This means that, due to the competition tendency, each time the game was played there was an average loss of 62% or a generated gain of only 38% compared to the reference limit, what hardly can be understood as an efficient use of the opportunity. The reference limit of 2000 is the maximum limit of added scores originated by the game, and is the result of ten iterations of black-black, with each team scoring 1000 at the end. The maximum possible limit for one team corresponds to ten iterations of red-black, with the team playing red scoring 1400. The team playing ten iterations of red would score -100. This is however a technical limit as no team will continue to play black and loosing while the other team continues to play red and winning. This never happened in all the 52 trials. In case of extreme competition, the most likely response observed was a behavioral change in the team that was playing black. The team playing black also started to play red to stop losses, and then both teams stopped scoring as the red-red combination corresponds to a 0 score for each team.

The results presented in Table 1 show that the means of the lower and higher final

scores are distant from the maximums recorded and from the game possible limits. The difference limit variable, calculated deducting the total generated by the game from 2000 (the best possible score), shows how far the mean is from the highest possible limit. The percentages calculated for the variables efficiency of the game ((total generated by the game/2000)*100) and efficiency of the winner, calculated with reference to the competition win-lose limit score of the game ((higher final score/1400)*100) show that on average more than 60 percent of the wealth that is possible to generate is lost due to the competition tendency.



Table 1: Descriptive statistics of the final high and low scores, total generated by the game, efficiency of the game, and efficiency of the winner

n Mean Minimum Maximum SD Lower final score 52 299 0 900 178 Higher final score 52 455 0 1100 278 Score difference 52 156 0 750 201 Total generated by the game 52 755 0 1800 421 Difference limit 52 1245 200 2000 421 Efficiency of the game 52 38 0 90 21 Efficiency of the winner 52 30 0 79 20

Considering the overall interest of the paper in the discussion of the limit extrapolation of the dominant behavioral tendency to the sustainability and economic survival endurance of travel destinations, the efficiency of the game is the most important result, as this is the game indicator that in a limit extrapolation would correspond to the destination economy efficiency.

To investigate the effects of the level of competition on the final indicators (total

generated by the game, efficiency of the game, efficiency of the winner) a t-test analysis for independent samples was performed. The independent samples (high competition, low competition) were differentiated by the frequency of the competitive totals. The high or low competition trials were defined by the frequencies of the black-black results, as all the other possibilities (red-black, black-red, red-red) involve competition. The high competition versus low competition reference threshold level 3 was chosen after the number of opportunities for communication and negotiation between the teams offered by the rules, under the assumption that without communication or negotiation the natural tendency is competition. Table 2: Total generated by the game, efficiency of the game, efficiency of the winner: High Competition versus Low Competition

High Competition

Low Competition

n Mean SD n Mean SD t-value df p Total generated by the game

40 581 284 12 1335 241 8.3 50 0.01

Efficiency of the game 40 29 14 12 66 13 8.0 50 0.01Efficiency of the winner 40 23 14 12 56 16 6.8 50 0.01



Figure 1: Efficiency of the game and efficiency of the winner means comparison: High Competition versus Low Competition

The high competition sample included the trials with high competition results

(cooperation <3 iterations of black-black out of 10 plays, n=40). The low competition sample included the trials with low competition results (cooperation ≥3 iterations of black-black out of 10 plays, n=12). The high competition trials were far more frequent than the low competition or cooperation trials, with the final numbers even higher than the earlier discussed expected ratio of 75 percent high competition versus 25 percent low competition (high competition trials 77 percent, n=40; low competition trials 23 percent, n=12). Limit competition (10 iterations of red-red, total generated by the game=0) was found in 2 trials, or 4% of the total. The total absence of competition, corresponding to limit cooperation (10 iterations of black-black, total generated by the game=2000) was not found.

The differences between the groups means were significant for all the performance

variables for a p<.01. The detailed statistics are the following: (1) total generated by the game t(50,1)=8.3, p<.01; (2) efficiency of the winner t(50,1)=6.8, p<.01; and (3) efficiency of the game t(50,1)=8.0, p<.01 (Table 2, Figure 1).

The results clearly indicate that, with reference to the game potential there is a major

loss of efficiency caused by competition, and that, when the high and low competition trials were compared, the total generated by the game, the efficiency of the game, and the efficiency of the winner were all significantly lower in the high competition trials than on the low competition trials.



Discussion The study outlines some of the questions that can be raised on the sustainability

theme. The cases and the results presented are only a fraction of the arguments for the importance of the study of sustainability and the implementation of preventive and corrective actions to delay or neutralize the decline of destinations. Each case can offer a simple conclusion, transposable to populations of individuals or populations of organizations operating in restricted economic environments.

The extinction of the Dodo case shows that, in restricted environments with protective

conditions stable for a long time, some populations develop a very strong adaptation to the conditions, but the progressive consolidation of the adaptive mutations is characterized by a high vulnerability in changes of the environment conditions, especially rapid and radical changes, which represent severe risks of decline, collapse, and extinction.

The Easter Island case shows evidence that the decisions and the behaviors in the

present may determine the evolution, development, and decline or collapse of populations in the future. There are decisions and behaviors that cause permanent damage and can never be corrected. Even if the decisions and behavior effects are only to emerge far in the future, sometimes with a delay of years or even generations, once some things are lost are lost forever and the more restricted and isolated the environment the more radical the direct and indirect repercussions on the whole environmental system.

The tragedy of the commons effect presents a model that explains the relation between

the available resources of an environment and the population’s full and uncoordinated control over the usage of these resources. The tragedy of the commons effect describes a situation complemented by the data from the trials of the decision game, showing that not only in theoretical but in empirical terms, competition is a far more likely decision and behavioral tendency than cooperation, and even when opportunities for communication and cooperation exist, only some of these opportunities will generate positive results for both sides.

The reduced number of experimental trials at this moment should be considered when

reading the statistical analysis results. The study is still a preliminary study and more data is required to develop a more clear understanding of the competition component in the decision and behavioral trends. We should note that the special nature of events and business travel and tourism or MICE (meetings, incentives, conferences and exhibitions) encloses inherent optimal conditions for rapid and radical change, irrecoverable losses, and powerful effects on human and organizational populations, effects derived from the scale and the limit concentration in time and space of the events, and more dangerous in more vulnerable restricted and isolated environments. The protection of the sustainability of destination systems should be considered a first priority as it provides the infrastructural conditions without which stable long term economic development will inevitably collapse. Such events should be seriously considered, justifying careful and anticipated planning in destination and event management applied fields, and the theoretical and research development of the theme to enable a deeper understanding of the risks and of the solutions that can be developed to defend economic long term sustainability without sacrificing irrecoverable destination assets.



Conclusions and Implications The paper defends three fundamental ideas: (1) the economic growth and development

of a travel destination should not be considered infinite or unlimited; (2) the sustainability of the economic growth depends on the final state of sustainability of a travel destination; and (3) the intelligent use of resources and the monitoring of the natural limits are core elements of the management of sustainable development in travel destinations. These three ideas become even more critical in restricted environments, characterized by additional vulnerability to collapses. The dominant competition tendency identified in the research results may represent in the limit an internal threat to the equilibrium, sustainability, and economic survival endurance of a travel destination, and destination management institutions should be aware of the risks of nonstop expansion strategies and of the fact that some damages in the development process will be irreversible. Sensitive monitoring, scenarios anticipation, intelligent planning, and responsible prevention would be strongly advised in such cases.

Finally, some limitations of the study should be considered, namely the size and

characteristics of the sample and the use of a single version of the decision game. In future research it is suggested that additional versions of the game are created and the study is carried out in bigger samples and samples with different characteristics.

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Mattera and Moreno Melgarejo - Strategic Implications of Corporate Social Responsibility in Hotel Industry: A Comparative Research between NH Hotels and Meliá Hotels International

Strategic Implications of Corporate Social Responsibility in Hotel Industry: A Comparative Research between NH Hotels and Meliá Hotels International

Marina Mattera and Alberto Moreno Melgarejo Universidad Europea de Madrid (Spain) ([email protected])

Abstract

The hospitality industry serves millions of people globally and is a multibillion-dollar industry with a significant growth expectation in the upcoming years. The Spanish tourism industry is one of the most developed sectors of the nation, being one of the main contributors to the country’s GDP. On a world wide scale, and specifically in the European context, there is a rising awareness for firms’ actions to be responsible towards the environment and the community in which they operate. Based on “triple bottom line” guidelines, companies’ mission in such a context is achieving competitive advantage by means of a business model considering three key aspects: people, profit, and planet. Considering the hospitality industry’s characteristics, it becomes essential to fulfill these new requirements to achieve sustainable competitive advantages. This exploratory study will outline which are the best practices of two main Spanish hotel corporations: NH Hotels and Meliá Hotels International. By pointing out actions undertaken by the most important firms of the sector, they can serve as an example and be replicated by other firms, thus increasing sustainability practices, improving understanding of triple bottom line, minimizing negative social as well as environmental footprint, and enhancing positive firms’ impacts in their operating contexts.

Keywords: Tourism, Sustainability, Hotel Industry, Corporative Social Responsibility, Services.

Introduction In the latest decades, there has been an increase in society’s awareness on the role

firms play in their socio-economic and environmental context. This resulted in a new business strategy, which takes into account the triple bottom line (Elkington, 1997). This innovative line involves three key aspects: achieving sustainable profits, while reducing environmental footprint (planet), and balancing these objectives with people involved, from employees to overall community.

The concept of Corporate Social Responsibility (CSR), or the pros and cons of business involvement in resolving social problem, has arisen. Some of the major topics discussed revolve



38


around the consumer’s recognition of companies being socially responsible and, independently from this factor, which are the implications for business’s future (Argadoña, 2010; Nord, 2006; Sharpley, 2000; Roner, 2006; World Commission on Environment and Development [WCED], 1987). CSR is linked to the belief that acting as a responsible organization leads to profitability and good business (Burke & Logsdon, 2008). Tourism industry is characterized by having significant environmental, socio-economic, and cultural impacts. Thus, CSR has become a necessary tool in order to ensure sustainable tourism development at destinations through public and private stakeholder management policies.

The present study will focus specifically on tourism private stakeholders’ approach to

CSR related to hotel industry. The effect of a business strategy including CSR in its main guidelines in tourism firms is an area that has been scarcely studied. This study aims to shed light over this matter and establish CSR’s strategic implications for the hotel industry. In doing so, our research has chosen two of the most relevant Spanish hotel multinational companies: NH Hotels and Meliá Hotels International, with economic interest spread in 39 different countries.

Both companies are taking part of the United Nations’ Global Compact strategic policy

initiative for businesses in order to advance their commitments to sustainability and corporate citizenship. This organization was first established in 2000, and now has more than 87,000 firms who are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment, and anti-corruption. Furthermore, they both comply with the Global Reporting Initiative (GRI), which is a non-profit organization promoting sustainability. It works in three lines: economic, environmental, and social, providing companies and other organizations a comprehensive framework for sustainability reporting, being widely used around the world.

By applying the reporting standards from such organization in the elaboration of all CSR-

related documents and information, both prove to be companies with a broad experience and working CSR compliance under international standards and policies. The main aim of this comparative research is to identify good practices to be replicated in other sector-related firms. Moreover, the article analyses the importance on CSR strategies related to tourism and the specific implications in hotel industry.

The study will consist first of a literary review of the state of the art in this matter,

followed then by an in-depth study of NH Hotels and Meliá Hotels International, including factsheet, CSR specific actions, and the most successful initiatives. Finally, from these two firms’ examples, the most relevant initiatives will be established as best practices, followed by limitations and future research.

Tourism Industry in Depth

According to the latest World Tourism Organization [UNWTO] World Tourism Barometer

(2012), international tourist arrivals grew by over 4 percent in 2011 to 980 million. With growth expected to continue in 2012, international tourist arrivals will reach the milestone 1 billion mark during 2012 (UNWTO, 2012). Considering that worldwide population has officially reached 7 billion people in 2011 (Haub & Gribble, 2011), it can be stated that one in every seven people

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http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/environment.html

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on the planet travel the world in 2012 sleeping at least for one night abroad. Not every tourist is sleeping on a private accommodation, as many of them travel to visit friends and relatives and they stay overnight with them. Nevertheless, any other kind of private accommodation is key to understand the tourism industry itself, and it can be stated that hotel industry is at the very heart of tourism.

The hospitality industry is a multibillion-dollar industry, serving millions of people

globally, and is expected to grow significantly within the next few years. The International Hotel & Restaurant Association (IH&RA) (n. d.) estimates that the hospitality industry employs 60 million people and contributes US$950 billion to the global economy every year (para. 1). This enormous industry has considerable impact on social, economic, and environmental conditions around every destination in the world, and enterprises in this sector have the potential to substantially contribute to sustainable development.

Tourism industry is characterized by being a massive impact sector, since “the World

Travel & Tourism Council (WTTC) estimates that, from direct and indirect activities combined, the T&T [Tourism and Travel] sector now accounts for 9.2 percent of global GDP, 4.8 percent of world exports, and 9.2 percent of world investment” (Blanke & Chiesa, 2011, p. 3). However, tourism is a particularly complex industry. As an economic phenomenon, it encompasses all the investment, production, distribution, and consumption activities undertaken in the process of attracting, receiving, and satisfying visitor demand. According to Argandoña, “all these activities overlap with and influence one another, as well as residents’ other activities” (2010, p. 1).

In the last few years, many circumstances and trends influenced tourism companies and

lead them to reconsider operational management, reformulating objectives and strategies. Gessa, Ruiz, and Jimenez (2008) have pointed out there is a growing social consensus about sustainability (according to the concepts defined in the 1989 Brundtland Report and world summits, namely Rio de Janeiro 1992, Johannesburg 2002, Rio+20 challenges, and many other) . Furthermore, society’s new concerns and expectations resulted in new regulations regarding education, the environment, human rights, or labor. Additionally, the authors point out an increase in the relevance honesty and ethics play in today’s business, especially after certain worldwide financial scandals, and a significant development in Information and Communication Technologies (ICT) which enlarges the firm’s reach to their consumers, in terms of transparency.

A hotel is first of all responsible to itself and its internal stakeholders, such as owners,

managers, and employees. The company is a community of persons; therefore, it must answer to this community for its own behavior. According to Argandoña, “CSR is a joint and shared responsibility within the organization” (as cited in Argandoña, 2010, p. 14). A hotel is also “responsible to its external stakeholders, … the individuals and population groups affected by its activity, including customers and suppliers, other players in the company’s value chain, local communities, society in general and future generations” (2010, p. 14).

Tourism and CSR

Given the importance of sustainable development, as it was pointed out by international summits herein mentioned (Rio de Janeiro 1992, Johannesburg 2002, Rio+20 challenges, etc.),


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customers, employees, and investors, as well as the media, governments, and NGOs, have been demanding the hospitality industry on a worldwide scale to address such matters. The hospitality industry has responded with a wide array of voluntary initiatives to show its dedication to sustainable development, although hotel industries still lag behind other travel sectors in responsible tourism (Roner, 2006) and behind other industries (Nord, 2006). However, “certification and benchmarking programs have been developed to illustrate commitment to improving environmental performance and more recently also social performance” (2006, p. 15).

Sharpley (2000) analyzed which are the basic requirements for sustainable tourism, and

concluded there are three basic requirements to achieve it: 1. Adopting a new social paradigm relevant to sustainable living. 2. National and International cooperation to create and adopt sustainable tourism

policies. 3. Using technology to contribute to sustainable tourism use. (p.13).

The author exposed the first element is not likely to take place as there is lack of specific

evidence supporting a demand towards sustainable living (2000). The occurrence of the second element is endangered by the political structures and fragmented nature of the industry, while the third element has so far been ignored by those who support sustainable development; hence, unlikely to be accomplished (2000).

Several authors have proposed knowledgeable and demanding customers are rising in

numbers, though there is limited empirical evidence which supports this (Middleton & Hawkins, 1993; Macnaghten & Urry, 1998; Toro, 2006). In order to transform sustainable development into tourism’s operations and activities, the concept “alternative tourism” arose, upon which there is a large controversy regarding its implications and applications. The concept emerged in the late 1980s; it was thought as an optimum means to conserve natural areas, hence achieving resources’ sustainability. Its beneficial effects were also associated with improvement in local communities, providing educational value for tourists and a differential factor for developing countries (Boo, 1994; Brandon, 1996).

Academia and practice have recently increased research and studies regarding CSR in

tourism and hotel industries (Erdogan & Barisb, 2007; García-Rodríguez & Armas-Cruz, 2007; Henderson, 2007; Kalisch, 2002; Lee & Park, 2009; Roner, 2006; Scanlon, 2007). Kalisch (2002) analyzed CSR cases in this industry and determined there should be more widespread practices and studies in these lines. Henderson (2007) reinforced tourism’s particular and identifiable CSR obligations apart from the business scope concluding CSR contributes to make tourism industries sustainable. In these lines, sustainability can be understood as conducting business without endangering future generation’s activities. The decision making process depends on several factors, including each individual’s self-awareness (Hill, 2010) and CSR cost-benefit analysis.

The link between tourism and hotels’ activities with the environment, and industry’s

sustained growth in the past, consequently has far-reaching negative impacts, which should be mitigated. This is important “not only for the good of the physical and social environments, but


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also for the sustainability of the industry itself” (Kasim, 2006, p. 19). Stoll (2007) reviewed main critics related to CSR from different perspectives.

Bhandarkar and Álvarez-Rivero (2007) determined the level of demand for CSR

activities or attributes depends on the level of relevance such demand has and, based on that, the resources devoted to such activities are allocated. In tourism industry, travelers are becoming more conscious with ecology and the respect for the environment matters, consequently increasing the demand for such characteristics in the sector. In this sense, a change of paradigm is being evidenced, together with the uprising of a new line of thinking. A UK study regarding tourism from Market & Opinion Research International [MORI] (2002) suggested that package holiday makers would pay more if money went towards preservation of the local environment and reversing some negative environmental effects of tourism (47%), workers in the destination are guaranteed good wages and working conditions (49%), hotels serve food produced locally (36%), or money went to support a local charity (22%). These consumers said they would be willing to pay up to 10% more for a holiday. However, Bhattacharya and Sen’s (2004) research showed consumer’s behavior is not homogeneous.

Companies engaging in CSR related activities can build up a resource or capability. As a

consequence, the company may have a sustained competitive advantage allowing for a continuation of its economic activities for a long-term period. Making use of year-benefits and firm-level data on environmental profitability, Russo and Fouts (1997) empirically tested this theory, resulting in both variables being positively correlated. This implies firms with higher environmental performance also present higher financial results. Recent studies regarding hotel industry (García-Rodríguez & Armas-Cruz, 2007; Lee & Park, 2009) have found hotel firms’ CSR has a positive relationship with financial performance; thus, it is bringing economic as well as social and cultural benefits.

The hotel business sector is one of the key elements of the tourism industry;

consequently, it is the one which should be the most involved. This is due to the fact that hotels have several social and environmental impacts, among which the most relevant ones are: water consumption, waste water management, energy consumption, waste production, purchasing and procurement, chemical use and atmospheric contamination, and local community initiatives (International Hotels Environment Initiative [IHEI], International Hotel Association [IHA], & United Nations Environment Programme [UNEP], 1995). Therefore, addressing any of these key areas denotes a corporate interest in environmental and social responsibility.

A study conducted by De Grosbois (2012) evaluated CSR reporting practice among the

top 150 largest hotel companies in the world. It demonstrated that, “while a large number of companies report commitment to CSR goals, much smaller number of them provide details of specific initiatives and report actual performance achieved. However, 109 of the largest 150 hotel companies in the world reported some information related to any of the five major themes of sustainability (environment, employment quality, diversity and accessibility, community wellbeing, and economic prosperity)” (p. 903). For instance, commitment to specific goals such as improving quality of life of local communities was stated by 54 companies.

According to the European Commission (2001), CSR “extends beyond the doors of the company into the local community and involves a wide range of stakeholders in addition to


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employees and shareholders: business partners and suppliers, customers, public authorities and NGOs representing local communities, as well as the environment” (p. 11). Hart and Milstein (2003) identified four key elements strategic planning should have in order to successfully grow towards achieving sustainable development:

1. Focus actions in the lines of reducing environmental damage (which result from

rapid industrialization). 2. Operating for the civil society with greater transparency. 3. Creating radical innovations based in new technology that allows for reduction of

environmental footprint and social damage. 4. Fulfilling basic needs of world’s lowest social class to enable creation of wealth and

fair income-distribution. The raising importance of CSR worldwide has brought to international institutions and

NGOs developing CSR certifications, including tourism companies in order to spread CSR management policies within tourism private firms. The most relevant ones are: TourCert CSR Tourism, ISO 26000 (Social Responsibility), the Global Sustainability Tourism Criteria (GSTC), the reporting standards of the Global Reporting Initiative (GRI), and the management United Nations Global Compact.

Hotel Industry’s CSR Practical Implications: NH Hotels and Meliá Hotels International

Nowadays, companies’ mission is achieving competitive advantage by means of value creation. As it was stated, the tourism industry is particularly client-oriented, so it becomes essential to deliver the elements which will result in customer satisfaction, brand enhancement, value creation, and consequently a steady competitive advantage. General Overview

It was herein argued the hotel business sector is one of the key elements of the tourism industry, and due to this fact it should be the most involved one in terms of CSR policies and actions. Consequently, it was deemed relevant to consider this sector for the purpose of this paper’s analysis.

Spain is one of the main destinations in the world in terms of international arrivals and

the second in international tourism receipts after the United States of America (UNWTO, 2011). Tourism’s contribution to Spanish gross domestic product (GDP) is estimated at 10% (Instituto de Estudios Turísticos, 2011), whereas worldwide is around 5% (UNWTO, 2011). Therefore, there are currently relevant Spanish hotel multinational companies with a wide experience regarding CSR. NH Hotels and Meliá Hotels International are taking part of the United Nations Global Compact strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment, and anti-corruption, in order to advance their commitments to sustainability and corporate citizenship. As a result, both are companies with a broad experience and working under international standards and policies.


http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/humanRights.html

http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/labour.html

http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/environment.html

http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/anti-corruption.html


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Meliá Hotels International was founded in 1956 in Palma de Mallorca (Spain) and is one of the world’s largest resort hotel chains, as well as Spain’s leading hotel chain (Meliá Hotels International, 2012). It currently provides more than 350 hotels and 87,000 rooms in 35 countries on 4 continents (Meliá Hotels International, 2012).

Meliá Hotels International S.A. operates its own hotel brands: Gran Meliá, Meliá Hotels &

Resorts, ME by Meliá, Sol Meliá Vacation Club, Sol Hotel, and Paradisus Resorts. Additionally, the firm purchased the Tryp Hotels company and brand at the end of the 20th century, selling the brand to Wyndham Worldwide firm in 2010, but continuing to own and operate the resorts under a licensing agreement (Wyndham Worldwide, 2010).

The firm operates its own Meliá brand products as well as Tryp Hotels, yet it also has

agreements with other companies in the leisure industry, opening hotels and resorts with Warner Bros (Flintstones-themed hotels) and with The Rank Group, parent company of the Hard Rock Café (Hard Rock Café Hotel) (Sol Meliá, 2004, p. 3). All in all, Meliá’s business includes more than 350 self-operated hotels in more than 30 countries (Meliá Hotels International [MHI], n. d., para. 6).

NH Hotels, Meliá Hotels International main competitor, operates in the same regions,

namely Europe, America, and Africa, being its key market Europe, particularly Spain. The firm is the leading business-oriented hotel Spanish group, and one of the fastest-growing corporate-focused corporations. The firm’s growth on a world wide scale was mainly due to several acquisitions, including the Dutch chain Krasnapolsky, Astron Hotels in Germany, and the Mexican Chartwell (NH Hotels, n. d.). Nowadays, their business has been consolidated in many regions and is pioneer in hotel innovation, creating wellness centers, a unique gastronomic offer by means of an agreement with the world wide famous chef Ferrán Adrià (NH Hotels, 2002), among other considerations. NH Hotels is now listed in the MEC (NH Hotels, n. d.).

The mentioned elements considered by the IHEI et al. (1995) as the most relevant ones

in terms of hotel business’ impact in society were the subject of this study. Several general aspects of the firm’s CSR were analyzed, particularly their efforts in reducing water consumption, waste water management, energy consumption, waste production, how they handle chemical use and atmospheric contamination, as well as purchasing and procurement, and finally their relationship with the local community (specific initiatives). Key Figures

A few years ago, hotel companies’ efficiency and success was measured through benefits and profitability. Notwithstanding this, nowadays competitive companies with a promising future are those making from CSR a key management item. Thus, the hotel chain main objective in our current society is to create economic, social, and environmental value from a sustainable approach through time . In doing so, a development mode must be implemented able to satisfy future current generations without constraint for future generations. Hotel companies will become profitable, flexible, and socially committed (Gessa et al., 2008).

The following table summarizes NH and Meliá Hotels International’s key figures:


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Table 1 NH Hotels and Meliá Hotels International Key Figures

NH Hotels Meliá Hotels International

Country Spain Spain Country Status OECD OECD HQ City Madrid Palma de Mallorca Operating countries in Europe

Andorra, Austria, Belgium, Czech Republic, France, Germany, Italy, Luxembourg, Poland, Portugal, Romania, Spain, Switzerland

Bulgaria, Croatia, France, Germany, Greece, Italy, Luxembourg, Portugal, Spain, United Kingdom

Operating countries in the Americas

Argentina, Chile, Colombia, Mexico, Panama, United States of America, Uruguay, Venezuela

Argentina, Brazil, Canada, Colombia, Costa Rica, Cuba, Mexico, Panama, Peru, Puerto Rico, Dominican Republic, United States of America, Uruguay, Venezuela

Operating countries in Africa Senegal, South Africa Cape Verde, Egypt, Tanzania Employees (2010 data) Over 18,000 Over 35,000 Revenue (in millions of U.S. Dollars at year end 2011)

1,343 1,335.3

Listed/Non-listed Listed Listed Stock listing code NHH MEL Latest Report 2010 2010 Member of Madrid’s IBEX 35 Yes Yes Report Type GRI-G3 GRI-G3 Application level A+ A+ Status GRI-Checked Third-party-checked International Certifications Not Applicable ISO 14001; EMAS European

Regulations; Earth Check; Biosphere Hotel Standards

(Bloomberg, n. d.; Global Reporting Database, n. d.; MHI, 2011a, 2011b; HN Hotels, 2011a, 2011b; Sustainability Disclosure Database, n. d.).

CSR Specific Activities

Based on Hart & Milstein (2003) and the four key elements they identify to achieve

sustainable development previously mentioned, the key activities Meliá Hotels International and NH Hotels carry out in each of those areas are presented.

Focus actions in the lines of reducing environmental damage (which result from

rapid industrialization). There are significant actions firms can carry out in order to reduce water or energy consumption, ranging from lowering bills to minimizing environmental impact. Hotel environmental impacts also involve waste reduction and recycling, water conservation, water and soil pollution reduction, air pollution reduction, responsible design, construction and renovations, biodiversity protection, prevention of ozone layer depletion, and noise reduction.


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Meliá Hotels International conducts specific activities with regards to reducing environmental damage with lower electricity consumption (MHI, 2011b, p. 33-34). They achieve this by using technical standardization of efficient lighting system as “sustainable lighting”, as well as using LED technology and electric eco-efficient appliances (2011b, 33-34).

NH Hotels similarly makes use of LED technology and electric eco-efficient appliances to

reduce their energy consumption. Additionally, they substitute traditional equipment with low-energy-consumption versions (e.g. minibars, solar filters for windows, etc.). Furthermore, they have installed approximately 4,400m2 of solar and photovoltaic panels in several hotel’s rooftops; as well as adapting lights to a specific schedule so that natural light is used during daytime. As far as reduction in plastic use, NH has replaced traditional material elements (e.g. amenities, office appliances, laundry bags, etc.) with others made out of biodegradable plastic (NH Hoteles, 2011b).

NH Hotels works in the reduction of water use and recycling by implementing a new WC

in all the bathrooms and restrooms of their hotels, reducing by 25% their water consumption and saving 640,000 liters per year (NH Hoteles, 2011b, p. 18). Complementary to this, NH is researching to achieve re-using water, i.e. “grey water” (2011b, p. 19). Furthermore, they have applied new technologies to towel manufacturing, thus lowering water and energy consumption (2011b, p. 19).

On the water reduction line, Meliá Hotels International has achieved to control the

spillage levels their hotels produce and the connections to the public sewage system (MHI, 2011b, p. 36). In doing so, Meliá’s hotels feed waste water to the local public purification plan, and in 3% of their facilities, they have their own purification systems or septic tanks (2011b, p. 36). With regards to recycling, Meliá has committed to the EU recycling policies (see European Commission, 2010); and the firm reached an agreement with the European Recycling Platform (ERP) for the collection of batteries and accumulators (MHI, 2010, p. 31).

NH Hotels has also committed to the EU recycling policies. Additionally, they use

recycled materials in TV sets as well as created a new initiative called “Cork2Cork”, in which they re-use corks and create eco-façades for hotels (NH Hotels, 2011b, p. 19). The firm also works pro-lowering their CO2 emissions by making new agreements with partners to reduce indirect emissions from suppliers’ transportation of inputs (2011b, p. 18). NH has likewise promoted the use of electric cars, installing charging points (2011 b, p. 19) ..

Meliá Hotels and NH work in the protection of the environment and natural resources,

both companies using fair trade and recycled products (MHI, 2010, p.65; NH Hotels, 2011b, p. 29). Additionally, NH is using wood certified by the Program for Endorsement of Forest Certification (PEFC) for the construction of their new establishments (NH Hoteles, 2011b, p. 28).

Operating for the civil society with greater transparency. Influencing the community’s wellbeing and prosperity implicates improving life quality;

raising employee, customer, or public awareness of sustainable development; and getting them involved, offering responsible or healthy product choices; and creating a safe environment for


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customers (De Grosbois, 2012). In doing so, transparency and accurately informing their stakeholders becomes essential.

Here are some of NH Hotels’ most relevant campaigns and collaborations with society and

the community:

Creates campaigns to improve customers or stakeholders’ sensitivity towards environmental matters (importance on reducing water consumption, promoting the use of recycled-based products, etc.) (NH Hotels, 2011b, p. 26).

The firm is an active member of International Tourism Partnership (ITP), as well as the Spanish Excellence in Sustainability Club (2011b, p. 9), and the Water Technological Institute (NH Hotels, 2010, p.41)

Collaborates with local associations, as for instance the Riviera Maya Hotel’s Association or CORAL Reef Alliance (NH Hotels, 2010, p.42), working towards the preservation of biodiversity, protecting the environmental footprint, and promoting good deeds in the tourist sector (NH Hotels, 2010, p.42),.

The corporation’s Knowledge Management Program provides an exchange of knowledge between employees of different branches, as well as participating in national or international conferences, collaborating with other corporative universities in the sector in order to share best practices (NH Hotels, 2011b, p. 33).

Meliá Hotels International has also contributed to greater transparency and showing the

effects of their policies towards committing to a highly sustainable strategic management and practice. Herein some of their initiatives are detailed:

Twenty-seven of their hotels hold now an environmental certification (MHI, 2011b, 28).

Creating a reporting system to inform and quantify the generation of waste in hotels to provide reliable and consistent data, accurately showing the scope of the environmental impact (MHI, 2011b, p. 37).

Establishing campaigns to raise awareness on biodiversity and the importance of the environment in which each hotel is located (MHI, 2010, p. 32-33).

Replacing the Christmas sales campaign with a project to protect endangered animal species, by which the firm donated 1 euro to WWF Spain for each reservation made during that period of time (MHI, 2010, p. 33). Through social media the firm allowed consumers to vote for which of the biodiversity recovery projects they wanted the money to be destined to (2010, p. 33).

Cooperating with TUI Travel (the leader travel group in the European market) in the distribution of a specific guide in which they educated clients on souvenir purchasing (MHI, 2010, p. 33). Hence, consumers will be aware if products have been made with plants or parts from endangered animals, and make their purchase-decision on a more informed basis.


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Creating radical innovations based on new technology that allows for reduction of environmental footprint and social damage. Hotel industry is responsible for maximizing linkages to local economy, looking to make the most of the relationship with local suppliers. This is a key initiative to social responsibility within a destination, especially in Developing and Least Developed Countries (Di & LDCs). One on the most important weaknesses of tourism development in Di & LDCs is economic leakage due to international amenities and ingredients imports in order to satisfy costumers’ standard level.

NH created the “Ecomeeting” concept, in which events, congresses, and conventions are organized based on sustainability requirements ensuring a respectful use of energetic resources, using products with low environmental footprint and fair trade (NH Hotels, 2011b, p. 28).

“Intelligent room” is a new concept created by NH through which the consumer’s energy, light, and water consumption can be measured, and therefore allow for a greater understanding of customer’s use and create new future strategies to lower even more the environmental footprint (NH Hotels, 2011b, p. 28).

NH created specific programs to prevent occupational hazards, applicable to all employees independent of their hierarchical position in the firm (NH Hotels, 2010, p. 33), together with emergency measures in hotels located in dangerous areas or proceedings, and protection for pregnant women (NH Hoteles, 2010, p.49).

Meliá, on the other hand, has created some of the following innovations to promote

sustainability:

SAVE project, Meliá’s own initiative to reduce the environmental impact of the business applicable to 200 establishments, includes all the different measures that can be undertaken in order to minimize the environmental footprint, introducing the best practices of each corporate branch and technical system’s standardization agreement (MHI, 2011b, p. 31-36).

Incorporating an internal portal for employees where they can access corporate information, applications, and other services while providing “PC points” to allow access to those staff members who do not have a computer in their work place (MHI, 2011b, p. 44).

Fulfilling basic needs of world’s lowest social class to enable creation of wealth

and fair income-distribution. Ethical treatment of staff is another key principle of a successful CSR program. While the industry as a whole is often reliant on temporary or low-paid workers, if staff are well looked after then they can turn into a company’s biggest asset, rather than just a drain on management time.

Although hotel chains have been addressing environmental concerns for years, the labor

issues that affect the hospitality industry have only recently come to light (Dodds & Joppe, 2005). These include fair wages, women’s rights, skills requirements, ability to join trade unions, and collective bargaining. The two firms herein studied have committed to CSR-labor-related-activities by enlarging their female workforce, as well as providing training courses for their employees.


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Among NH’s most important actions, the most outstanding ones are:

NH has more than 260 social collaborations, from which more than 230 NGOs and other foundations get support (NH Hotels, 2010, p. 37).

NH’s employees range from young adults to over 40-year-old adults, out of which there is a large proportion of immigrants (almost 17% of their employees work in a country different from their home nationality) (NH Hotels, 2011b, p. 31). This allows people to move globally, providing opportunities for people in each country where the company operates to have a steady job.

NH Hotels believes in equality (holds a certification in Equality), including among their employees similar proportion of men and women (NH Hotels, 2010, p. 31), and also including handicapped or disabled people with its UP! for Opportunities program, Up! for Volunteering, and Up! for Hospitality (2010, 36-37). o Through these initiatives, NH incorporates people with some degree of disability

or young adults with a risk of social exclusion, providing equal opportunities to every individual. Thus, the firm promotes a sense of solidarity and contribution for society. Additionally, NH collaborates with NGOs and Global-scale foundations.

o Up! for Volunteering comprises: International campaign “Christmas for Everyone”, creation and development of a school-hotel in Ethiopia, help, through employees and clients’ donations to Haiti Earthquake’s victims and collaboration to victims of Veracruz’s Earthquake (NH Hotels, 2010, p. 36).

o Up! for Opportunities embraces: Youth career initiative (Mexico); Obra Padre Mario (Argentina); Youth Bank (Germany); Hotel and restaurant training (Spain) (NH Hotels, 2010, p. 36).

o Up! for Hospitality includes: “Menudos Corazones”, a specialized program that provides accommodation for relatives of people who are waiting for heart transplants in Madrid’s hospitals (Spain); “NH Solidary Friend” program (Spain); “Heart Host” together with UNICEF (Mexico) (NH Hotels, 2010, p. 36-37).

The hotel firm NH has created “NH University”, a corporative education center where employees can receive specialized training in different fields related to tourism and leisure management, from technical knowledge to how to achieve quality excellence, providing employees an opportunity for improvement (NH Hotels, 2011b, p. 32).

Among Meliá’s most relevant initiatives:

Investment in over 90,000 hours of training in Spain only, destined to improve employee’s skills and qualifications (MHI, 2011, p. 58). This will allow the workforce to be fit for promotions and improvement of their socio-economic status.

Any single policies outlined above can secure benefits for those in the hotel industry.

However, by combining them they become an effective means of structuring a sound business strategy going socially forward. Purchasing decisions are governed by ethical factors, rather than solely price-representing an advantage any firm should take advantage of.

It has also been noted that, both NH Hotels and Meliá Hotels, have been awarded

several international certifications, standards and prizes, being some of the most relevant:


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NH Hotels’ most relevant awards and certifications. o Diamond Prize in Purchasing 2010 (Spanish Association of Purchases, Hiring,

and Supply [AERCE]) (NH Hotels, 2010, p. 21). o 3S Awards 2010, awarded by The Global Sourcing Council (GSC), a global non-

profit organization for people and organizations with an interest in the social and economic effects of sourcing, as best initiative in global supplying (NH Hotels, 2010, p. 21).

o Green Certification Project (more than 70 hotels have been awarded this environmentally friendly certificate) (NH Hotels, 2010, p. 28).

o GreenLight Acknowledgment, a voluntary program in which organizations commit towards the European Union to reduce their lighting energy use, for all NH Hotels (NH Hotels, 2011b, p. 27).

o GreenBuilding Acknowledgment for 5 of the company’s hotels (achieving a 25% reduction in energy consumption) (NH Hotels, 2011b, p. 27).

Meliá Hotels International’s most important awards and certifications . o RCI ® Gold Crown awarded to the Sol Meliá Vacation Club resorts in the

Dominican Republic (MHI, 2010, p. 17). o RCI ® Pinnacle Award, granted to the Sol Meliá Vacation Club for its excellent

sales volume and performance (MHI, 2010, p. 17). o Best Spanish Hotel Chain Award, announced by the Agent Travel tourism

magazine (MHI, 2010, p. 17). o Most International Spanish Hotel Chain, i.e., the most extensive domestic and

international presence according to a leading hotel industry magazine, Hosteltur (MHI, 2010, p. 17).

When compared to the global trend in this sector, these firms are outperforming their

peers. Levy (2011) conducted a study identifying CSR practices of a wide range of hotel companies, and identified some still do not have a formal corporate governance system to measure, monitor, or report on sustainability practices. This author also points out those enterprises that have the best practices educate their employees on environmental issues and implement employee-policies for safe, healthy, and fair work conditions, water consumption reduction in guest rooms, provide customers with more healthy food, among others (2011). NH and Meliá Hotels have not only been carrying out these activities, but also going beyond the average actions done in the sector.

Conclusions

During the course of the study conducted, several findings came to light, adding to the knowledge gathered in academia and practice with regards to companies operating in the Spanish tourism industry and implementation of CSR strategies, policies, and that have these kinds of initiatives as a core element when planning for the firm’s future.

Academia and practice have perceived CSR as desirable not only to the society in

general, but also for firms themselves (Njite, Hancer, & Slevitch, 2011). CSR involves commitment beyond legal compliance, which tackles a wide range of stakeholders in addition to employees and shareholders. As it was mentioned, the hotel industry is uniting to other sectors


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in a worldwide trend regarding CSR actions’ implementation. Under the limited resources and increasing material prices, how to select optimal CSR programs and to evaluate their costs becomes a crucial problem for international tourist hotels, especially in global competitive markets (Tsai, Hsu, Chen, Lin, & Chen, 2009).

It has been proved CSR initiatives bring financial benefits to hotel firms, identifying a

relationship between CSR and financial profit (García-Rodríguez & Armas-Cruz, 2007; Lee & Park, 2009). Hart & Milstein (2003) have identified four key elements strategic planning should have with the purpose of successfully carrying out CSR activities and achieve sustainable development. In the present analysis, based on the tourism industry in Spain, two of the most recognized companies have been identified as “best practice cases”: NH Hotels and Meliá Hotels International.

Both firms incorporate significant actions when focusing on reducing environmental

damage. Reducing energy consumption through new technologies, using recycled materials, and basing their inputs on fair-trade products are some examples of those actions. In the case of operating for the civil society with greater transparency, it shall be noted that NH as well as Meliá Hotels International subscribe to the Global Compact Organization, while using GRI reporting standards to create their sustainability documents. This provides greater transparency as they carry out activities in line with internationally accepted practices and guidelines.

According to Casaldàliga and Horno (2012) the level of CSR implementation in the

Spanish hotel industry is still in its initial phase. Progress is being made thanks to the growing demands of some of the major tour operators (2012). Notwithstanding, there is broad consensus that advances in CSR lead to positive economic impacts in hotels (2012). These benefits are related to better understanding of their customers’ needs and expectations, improving employees’ productivity due to better training and higher motivation, achieving more efficient savings or innovating new products or processes able to achieve competitive advantages (2012).

With reference to creating radical innovations based in new technology which allows for

environmental footprint and social damage, both firms act towards achieving this. By creating the “eco-meeting” concept in the case of NH or the SAVE project by Meliá, where common environmentally friendly best practices are shared within the organization. Furthermore, both firms consider the community, in which they operate an essential asset, thus acting towards fulfilling basic needs of world’s lowest social classes to enable creation of wealth and fair income distribution. Considering NH as well as Meliá operate also in developing countries, which are home to the world’s lowest class, they embrace their responsibility by creating specific programs (e.g. Up! by NH), contributing to mitigate inequality.

The effort should start somewhere and the sector’s role needs to be developed. This

means that further discourse on this issue should concentrate on understanding the drivers and barriers of adopting responsible behaviors, and possible ways to enhance the former while mitigating the latter. Such knowledge is crucial in the effort to increase hotel business’ involvement and adoption of responsible behaviors (Kasim, 2006).


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Provided the novelty of the topic studied and the existing available data, the contrast of this study is a first step towards understanding effects of CSR strategies in tourism sector firms. Future studies on the matter can expand, compare, and contrast the results the present analysis is portraying for a reduced number of firms.

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54 Rowson and Lashley – Lifestyle entrepreneurs: Insights into Blackpool’s small hotel sector

Lifestyle Entrepreneurs: Insights into Blackpool’s Small Hotel Sector

William Rowson International Tourism Business Research, Consultancy, England

([email protected])

Conrad Lashley Oxford Brookes University, England

Abstract

Branded chains dominate sections of commercial hospitality provision; however, the vast majority of firms in the sector are micro businesses employing 10 or fewer staff. In fact most are so small as to employ no permanent staff. In many cases, those running these businesses are not classic entrepreneurs driven by a need to maximise profits and build a business empire. Actually, many are best described as lifestyle entrepreneurs, their key motives are more associated improving their quality of life. This paper reports on the owners of a significant sample of Blackpool hotels. For most, this is their first entrepreneurial venture. Key Words: Lifestyle Businesses, Lifestyle entrepreneurs, Micro-firms, Small hotels.

The hotel sector in Blackpool is dominated by a large amount of micro-firms, typically managed by owner managers operating just one hotel and employing few if any staff, normally family members, often referred to as “family” or “lifestyle” businesses (Beaver & Lashley, 1998; Getz, Carlsen, & Morrison, 2004; Lashley & Rowson, 2003; Thomas, Lashley, Rowson, Xie, Jameson, Eaglen, Lincoln, & Parsons, 2000). Many of these micro-firms are operated by owners who are not entrepreneurial in the true sense of the word, but are driven by personal and lifestyle reasons that dominate motives for operating the hotel. In circumstances where motives are clearly not classically entrepreneurial, hotel operators often do not recognise the business skills needed for effective performance (Morrison, 2002).

Service quality management; investment, financial, and cost management; marketing, people management, and general business strategy, for example, are at best reliant on informal processes, and frequently non-existent (Lashley & Rowson, 2006). As a consequence, there is a high “failure” rate of these micro-business hotel operators, and an earlier study in Blackpool by Lashley and Rowson (2007) estimated that at least 20% of the hotel stock in Blackpool changes hands each year. Work by Clegg and Essex (2000), and Coles and Shaw (2006), suggested that similar rates are experienced in South West holiday resorts. Furthermore, the low skill base of hotel owners also limits the quality experiences to visitors and creates concerns amongst tourism officials attempting to promote these seaside destinations (Agarwal & Shaw, 2007).




A high percentage of businesses in the tourism and hospitality sector are small firms, often family operated; this is a common feature to be found across the globe. In the UK, for example, 95% of firms in the hospitality sector employ fewer than 50 employees (the generic definition of a small firm) and 75% employ 10 or fewer employees (by definition they are micro-firms) (Lashley & Rowson 2006). Indeed many small hotels, guest houses, cafes, and pubs are not employers, and are run by owner-managers with family and friends helping out. Getz, Carlsen, and Morrison (2004) described these as predominantly family businesses.

Changes to Seaside Resorts

British seaside resorts have experienced considerable changes in the pattern and nature in visitor activity in recent times (Clegg & Essex, 2000). Shifts in demand, which have seen moves away from manufacturing as a key economic activity, have resulted in the end of the so called wakes weeks, whereby seaside visitors would arrive in a resort like Blackpool en masse from the industrial towns and cities of the North West, and North East (Walton, 1994). Over the last few decades British seaside resorts have experienced significant changes in patterns of holiday demand. There are now lower levels of demand for week long or fortnight long holidays, but increased interest in weekend breaks, even in the height of the summer season, consequently impacting on demand for accommodation (Lashley & Rowson, 2010). Furthermore, Clegg and Essex (2000) showed that there has been a reduction in hotel supply, especially at the small property end of the commercial market. To this end, resort management have adopted an array of strategies to increase resort facilities and attractions and, in particular, Blackpool’s casino license bid was the background to this series of research projects.

This paper builds on the earlier research projects undertaken for North West Tourism Skills Network (Lashley & Rowson, 2004, 2005), which represented an attempt at intervention by a local college and tourism officials by providing a three day training programme for would be hotel operators prior to their buying a hotel. This work explored two sets of hotel owners. The first set of 10 hotel operators were in their first year of trading in a Blackpool hotel, without the benefit of a training course. The second group (7 couples) were exploring hotel ownership and had undertaken a 3 day training programme, provided and designed by Blackpool and Fylde College, to give potential hotel owners insights into the skills needed for successful hotel operation.

This paper builds on the insights gained from the earlier research by interviews with 120 owner managers of hotels in Blackpool. The sample was structured around owners in their first year of trading, owners for whom 2006 season represented their second or third year of trading, and those who were trading for 3 years or more. The paper, therefore, provides an insight into a much larger sample of operators of small hotels in the resort.

Small and Micro-business in Hospitality and Tourism

Not all businesses are started for growth, profit maximisation, or even permanence; many are established with the needs and the preferences of the owners and their families being paramount. That is the essence of “family business” and it sets them apart from enterprises in which the owners and their families matter little to the strategy or operations of the enterprise (Getz et al., 2004). The small firm nature of business in the tourism and hospitality sector is a common feature to be found across the globe. In the majority of instances they can be described as family firms (Getz et al., 2004). While the family metaphor is valuable, it tends to be concerned with the business ownership rather than why the owner managers are in business (Lashley & Rowson, 2010).

It is our view that these firms are best described as lifestyle firms because this enables commentators to explore the differing business motives of these individuals. It also



allows the study of these firms owned by individuals who do not conform to the stereotypical “nuclear family”. This project aims to extend and develop an understanding of these essentially lifestyle firms (Lashley & Rowson, 2010). This study is concerned with individuals who have recently bought small hotels in Blackpool, the UK’s famous seaside resort on the Lancashire coast.

The literature suggests that ambitions for business growth and development are key features of entrepreneurial behaviour; few of these micro-firms are driven by classical entrepreneurial motives. Previous research suggested that only one in eight firms in this sector has primary growth aims (Beaver & Lashley, 1998; Lashley & Rowson, 2003, 2007, 2010). The majority are, to varying degrees, operating for lifestyle reasons. This paper uses the term “lifestyle” to explore the motives of micro-business operators whose objectives will lie somewhere between growth and profit maximisation, or those who run a hotel because they “like the life” or want more “control” over their lives (Getz & Carlson, 2005), and not those who maybe operated a business in relation to hobby or leisure interests. The business motives of these hoteliers are important because they impact on the awareness of their own development needs (Morrison & Teixeira, 2004).

Previous research suggested that growth orientated operators are more receptive to the potential for management development (Dewhurst & Thomas, 2003). Lifestyle business owners, on the other hand, tend to give their development needs lower priority, except when crisis and potential failure looms (Beaver and Lashley, 1998; Ateljevic and Doorne, 2000; Lashley and Rowson, 2010).

The consequences of these variations in motives for tourism executives in Blackpool is that the skill levels of those managing the hotel stock tend to be poorly developed, and a high failure rate exist among the town’s provision. This resulted in local tourism officers looking for ways to intervene (Shaw & Agarwal, 2007; Shaw & Coles, 2007). In fact, the earlier research (Lashley & Rowson, 2005) was commissioned by the local tourism agency frustrated at the low uptake of training provision aimed at potential hotel owners in Blackpool; the training offered provided an induction to hotel ownership before the potential owners committed themselves to hotel ownership in the town.

This was part of an arrangement that had seen the refurbishment of three hotels in Blackpool funded by a commercial backer and staffed by catering teachers and students from Blackpool and Fylde College. This opportunity to “have a go” before committing to hotel ownership was a unique opportunity for those thinking of buying a hotel in Blackpool; however, there were two potential flaws in this: one, that the uptake was very low from potential hotel purchasers and two, that those who went on the course might decide that hotel ownership was not for them after all. On another level, these hotel owner managers are to some extent operating commercial homes (Lynch, 2005; Lynch & MacWhannell, 2000; Walton, 2000), which provides some interesting tensions between the home and the commercial activity. Lynch’s work (2005) explored some of these tensions between the home and the commercial activity whereby the “paying guest” is both accepted into, but also restricted in access to some private spaces. Almost all the hotels in this study were “traditional commercial homes” where the family lived on the same premises as the guests (Lashley & Rowson, 2010; Walton, 1992).

Lynch identified some variations in the interactions between guests and hosts, and variations in the separate domestic and commercial space. Although not an immediate concern of this paper, we accept the position argued by Lynch that the “home” aspect of the commercial home does need to be considered because it does impact on hotel owner manager’s perceptions and the management of guests. The link between home and commercial activity in the small hotel sector presents dimensions to the relationship that are



unlikely to be reproduced in larger hotels or in most other hospitality and tourism businesses where guests do not share the same premises with hosts (Lashley & Rowson, 2010).

The Study Context

This paper is written in a context whereby the British seaside resort has undergone a period of significant shift in demand. While the move from Fordist to Post-Fordist production systems supposedly reflects moves from mass produce to more flexible and focused patterns of consumption and supply (Clegg & Essex, 2000; Walton, 1978), changes in tourism tastes and the availability of cheap travel have led to the development of significant demand for holidays with more guaranteed sunshine than the average British seaside resort can deliver. In addition tourists are said to have looked for more flexible and smaller scale and segmented forms of tourism (Poon, 1993; Poon & Poon, 1994; Urry & Lash, 1991). Traditional mass tourism resorts have frequently lost market to newer forms of tourism in cities, heritage sites, and remote rural locations (Clegg & Essex, 2000). As well as these shifts in demand, seaside resorts had themselves been slow to adapt to the change. In part this had been driven by the nature of the hotel profile. Many of the hotel owners perhaps shaped by “lifestyle” perceptions were slow to adapt to both the nature of the hotel offer to clients, by increasing en-suite facilities, for example; and the nature of the resort offer to visitors by increasing attractions, particularly those which overcome perceived weather disadvantages. Butler’s resort lifecycle model has been said to apply to many British resorts (Butler, 1980; Clegg & Essex, 2000).

In response to the loss of significant shares of the old market and the emergence of the new markets, many resorts have invested in tourism development action programmes which have required change within the accommodation sector. For example, the encouragement of investment in refurbished accommodation, including a significant increase in rooms with en-suite facilities, has been evident across many seaside resorts. That said, it is our view that the ownership pattern of the independent accommodation sector has presented some barriers of development of an appropriately focused service offer to the various market segment appropriate to the individual resort. This paper explores some of the factors which relate to the business motives of those operating some of the smaller hotels in these resorts (Lashley & Rowson, 2010). In the UK, Blackpool is a major seaside resort located on the Lancashire coast in England’s North-West Region. Originally developed in the nineteenth century (Walton, 1983), the town like many other seaside resorts has been in decline since the 1960s as British holiday maker patterns have changed and the industrial heartland it once serviced has all but disappeared or moved location. Wakes Weeks

Where once famous Wakes Weeks would bring in thousands of week-long visitors

from the industrial towns of Lancashire, Yorkshire, and Scotland, visitor patterns are now more typically short break and day trippers. The Blackpool Tower, the Pleasure Beach, and the Golden Mile, the town’s illuminations and piers are still major assets which give the visitor an added set of seaside attractions. In recent years proposed changes to the gaming laws in the UK have included the prospects of Blackpool developing a new lease of life by becoming the “Las Vegas” of the North (Lashley & Rowson, 2005). Tourism Planning

Tourism authorities charged with increasing the flow of visitors and changing the

profile of tourism in the resort were increasingly aware that the patterns of ownership and low survival rate of hotel owners were detrimental to long-term development. Contacts with hotel owners through Tourism Advisors convinced the authorities that the low skill levels of



those buying a hotel for the first time was a key contributor to the low survival rate of first time hotel buyers. In some cases businesses failed because of poor business skills as identified by Morrison (2002), in other cases owners sold the property on because the reality of hotel ownership had not matched up to their life-time dream of owning a hotel (Lashley & Rowson, 2005).

Methodology

An initial research approach was concerned with the evaluation of the effects of a three-day training programme for new hotel owners and has been reported (Lashley & Rowson, 2005). However, this paper focuses on a later survey with 120 hoteliers who had not been on the training course but also includes data from 7 of the original hoteliers who were in the control group of the original survey. The research sample is structured around hotel owners in their first year of trading (39n), hotel owners for whom the 2006/07 season represented their second or third year of trading (39n), and those who had been trading for 3 or more years (42n). Research Aims The research project aimed to:

1. Establish the motives, experiences and backgrounds of those buying a Blackpool hotel.

2. Explore respondent’s perceptions of their own current and future skills needs. 3. Estimate the rate of turnover in ownership of Blackpool’s small hotels.

The research design intended to employ a number of measures of business performance

and these will be informed by semi-structured interviews with interviewees. A research instrument was developed with a combination of structured, semi-structured, and open-ended questions which where presented through telephone interviews. The key issues to be considered were based on earlier research projects conducted by the authors (Lashley & Rowson, 2005). Principally the research is focused on four sets of key issues. Interviews were conducted in September and October 2006.

Operator motives and background: the research needs to explore business operators’ motives for buying a hotel, background, characteristics, prior knowledge, and experience. In particular, this needed to explore the extent that owners have or have not got prior hotel management experience, or small business management experience.

Aims and ambitions: the research needs to build a picture of the long term ambitions of the business operators to establish the extent that they are driven by entrepreneurial growth and profit maximisation motives or a more lifestyle quality of life aims.

Recognition of current and future development needs: flowing from respondents’ perceptions of their own needs to operate successfully in the Blackpool hotel business, there is a need to explore the hoteliers’ needs and interest in personal development.

Survival rates: prior studies suggested that the failure to understand the realities of operating a small hospitality business together with the mismatch in skills possessed, and needed, for successful hotel business management result in a large “turnover” in ownership of these micro-businesses.



The questionnaire used in the telephone interviews included twenty-three questions in

total, five had limited choice answers; for instance, when asking about funding the purchase of the hotel, Table 1 provides an example of a limited choice question. The remaining eighteen questions were more open-ended, allowing respondents to use their own words to describe motives or experiences. Answers were clustered into response types and examples selected to represent the range of responses from the sample as a whole. Table 1 Funding the Hotel Purchase n=120

Element (%)

Sale of house 32.5 Sale of business 13.4 Sale of house and mortgage 31.7 Sale of house and unsecured loan 9.1 Mortgage 6.6 Loan 4.2 Other 2.5 Total 100.0

The Sample

Given the complexity of the issues to be researched and the importance of the

perceived benefits, the researchers adopted a qualitative approach through survey instruments via semi-structured interviews with significant stakeholders. The hoteliers (120n) were interviewed at the latter end of 2006 season toward the illuminations. The illuminations allow Blackpool to extend its season beyond the summer months. Trade bodies representing the hotels in Blackpool were approached and a data base of over 300 hotels was devised and 120 hoteliers were interviewed by telephone. The hotel owners in the sample talked freely and candidly about their hopes and aspirations for their businesses, the data collected was exceptionally “rich” and detailed.

Thirty-five per cent of the hoteliers interviewed had been in the hotel business for over 3 years (see Table 2). New entrants to the hotel sector in Blackpool accounted for 32.5% of respondents; the remaining 32.5% of respondents had been in their hotel businesses for between 2 and 3 years. The hotels in the survey varied from small guest houses described as hotels with less than 9 rooms; these usually still had about 5-6 letting rooms (see Table 3). The largest hotel had 42 rooms. Eighty-five per cent of the hotels in the survey had 15 rooms or less.

Table 2 Length of Time in the Hotel n=120 Table 3 Number of Rooms n=120

First year 32.5

2-3 years 32.5

Over 3 years 35.0

Total 100.0

1-9 29.2

10-15 55.8

16-20 5.0

0ver 20 10.0

Total 100.0



Table 4 Number of Hoteliers Employing Full-time or Part-time (n=120)

Respondent employing

%

No employees

%

Total

Employees 35.8 64.2 100.0

Less than 36% of the respondents said that they had employees (see Table 4); the

significant majority of these said that their employees were relatives or friends, often students. Informal arrangements and employment practices were the norm with this group of respondents and the following statement sums this up. (In the following sections respondents will be referred to by a code to protect anonymity; the code is BP followed by the number of the respondent).

Three quotes from respondents below: BP 081“I employ my daughter, she’s a student at the local college and I employ one of her friends as well, mainly in the summer season, but at weekends if we are busy to help with getting the rooms turned around”. BP 109 “I have one casual employee who comes in as required and a part-time student who works mainly in the summer holidays”. BP 113 “I don’t have any regular employees but I do have two students who come in, on an ‘as and when required basis’ in the main season to help with breakfasts and change over days and room cleaning”.

Study Findings

Lifelong Ambition

Eighty-two per cent of the respondents had lived in a dwelling house prior to starting in the hotel business, with only 10.8% moving from another hotel, and 6.7% whom had lived at another business address prior to moving into the hotel (see Table 5). Many had held lifelong ambitions to own a seaside hotel, sometimes for many years before actually buying a hotel. As one hotelier said:

BP 067 “We had fancied doing this for a long time before we bought the hotel. We used to have [a] kitchen business but it has been difficult to get good reliable staff for some time now, and so we were looking for another business that we could work in and not require many employees, and a small hotel seemed ideal, we did some research and found Blackpool to be the best place to buy, longest season and cheapest prices for hotel property compared to many other places we looked at. So we sold the kitchen business and our house and set up here”.

Others had become disenchanted with the labour market and workplace and were

looking to change their lives, as the following hotelier said: BP 050 “I was a truck driver and lived in Somerset, we had a 3 bed roomed house, I was fed up with my job because of being away from my wife and family most of the week, my wife’s had this thing about owning a hotel for years now, and we looked into it and got this hotel in Blackpool. We actually got more money for our house than the hotel cost, but we had a big mortgage on the house, and so when we bought the hotel we had to take a small mortgage but we pay a lot less for this hotel with eight letting rooms than we did for our three bed roomed house”.



Table 5 Living Arrangements Before Moving into the Hotel

Element (%)

House 82.5 Another hotel 10.8 Another business 6.7

Total 100.0

House Sale to Fund Hotel Purchase

A large majority of the respondents talked of using the equity in their houses to

purchase hotels in Blackpool. The reason for this was the fairly cheap cost of purchasing a hotel in Blackpool. One of the major lenders in Blackpool had special arrangements in place so that the hotel owner could pay their mortgages in July, August, September, and October, when they were doing most trade. The following quote sums this up:

BP 087 “It was a combination of our savings, profits from our house sale, and a small mortgage to fund the purchase of the hotel. Because of the prices of hotels in Blackpool we have been able to set up our own business, something we may never have done, we wanted to, but it was the cost of the hotels that were holding us back until we found out about the prices in Blackpool.

Over 30% of the respondents said that they wanted to work for themselves, with

23.4% saying that they were fed up with their job and wanted to be their own boss. For many respondents starting in the hotel business has been a life long dream with 25.8% saying that they had wanted to do this for years (see Table 6).

The following quotations from respondents confirm this:

BP 001 “My husband was getting fed up with his job and there seemed little future in it, I was working in dead end part-time work and we had talked about having a seaside hotel for years. Anyway we went to see some friends who lived in Blackpool and we had a look around the place, and noticed how reasonably priced the hotels were and really it all went from there”. BP 004 “Redundancy really, my husband was made redundant and we used his redundancy money and the sale of our house to buy the hotel. We had talked about this many times before, but it was redundancy that finally pushed us this way”.

Table 6 What Motivated You to Start Your Own Business?

Element (%)

Wanted to work for ourselves 30.0 Fed up with job decided to be our own boss 23.4 Wanted to do this for years 25.8 To avoid unemployment or redundancy 12.5 Semi-retirement 3.3 Working from home/home with income 5.0

Total 100.0



BP 020 “This was the only way we could find of running a business were we could work together and basically work from home. Before we worked really hard but barely had enough time together or for our children”. BP 024 “I’d always wanted to do this since I was a little girl and use to come here on holiday with my mum and dad. My family had grown up and my husband was getting a bit fed up with his job, you know the usual ‘do more for less’ syndrome so we decided to buy this hotel. It’s the best thing we have ever done if I have any regrets, it’s we didn’t do it 20 years ago”.

The levels of experience of the respondents varied greatly. Some claimed to have

previous hotel or business experience; this often amounted to little more than working in retail, a pub, or a hotel, very few respondents had actually managed or operated a hotel before; Of the 40% of respondents who claimed some form of prior experience, only 10% had any “real experience” of hotel ownership. Fifty-nine per cent of respondents had no business or hotel experience at all when they started in their hotels; in fact it was a “blind leap” of faith for many. Few Skills Required

There was a common perception among the respondents that few skills were required to operate a hotel and that most of it was just “common sense”, as the following quotes illustrate:

BP 118 “I’ve no experience myself but my wife’s worked in bars and as waitress for years and she’s very good at dealing with people”. BP 114 “No experience at all, but my son works in catering, he’s a chef”. [After the interviewer asked if he worked in the hotel] “No, he doesn’t, he works in London but he has given us a lot of tips about commercial cooking that have been useful”. BP 109 “We had business experience, but no catering or hotel experience, it came as a bit of shock for a week or too, when we started in the hotel. In the end our business experience did come through but the first few weeks were a tough time”.

Table 7 Reasons for Starting in the Hotel Business

Five affirmative elements %

We had wanted to do this for some time/dream of ours 31.7 This was business where we could work together 13.3 This is an easy to start business, with no skills needed 27.5 This is a home with a income 27.5

Total 100.0

Our Dream

Most respondents’ answers were focused on lifestyle issues such as, “this has been our dream for years now”, wanting to work together, to have an home with an income, and the majority felt that it was easy to start a hotel business which required no particular skills (see Table 7). The following quote is typical of the respondents thinking: BP 044 “This has been something we had wanted to do for a long time, we had talked about doing this for years, if I have any regrets it’s that we didn’t do this years ago. In our old jobs we both worked colossal hours, we were on call a lot of the time, here in the hotel we are on call and



work long hours, but without the pressure or stress, plus we are making more money without the hassle we used to have in our old jobs”.

Many of the respondents thought that having a house with a income was a good idea the following illustrates this point:

BP 050 “Because this business is a ‘house, home, and job rolled into one’ that was our motivation, plus I was fed up with driving trucks for a living and being away from home all the time and my wife hated her job and so this was a way out for us, and meant that we could be our own boss and have a less stressful life. This type of business has its moments but on the whole it is a steady and relaxed way to earn your living dealing with mainly nice people on holiday”. BP 073 “I liked the idea that we would have a home that would pay for itself and provide us with jobs”.

Furthermore, many of the respondents were making clear decisions about lifestyle as

the following shows: BP 059 “For us it was a lifestyle choice, we had a little daughter and I wanted to spend more time with my family and this was the business that appealed to me because I could ‘work from home’, this gives us both more time together with the children, we can make a comfortable living, and we are much less stressed than we were before in our last jobs”.

A significant majority of respondents said that Blackpool was their favourite place and

often the decision to buy a hotel in Blackpool was driven by good holiday memories from the past; in many cases, this was the hoteliers’ childhood visits to the seaside. Thirty-five per cent of respondents said that they had chosen Blackpool because of the long season and twenty-four per cent cited the cheap hotel prices. There was some overlap between the choices with many citing the long season, cheap hotel prices, and the busiest seaside resort as reasons. Therefore, the respondents’ first choice was recorded (see Table 8).

Table 8 Why Did You Choose to Purchase a Hotel in Blackpool?

Element %

Long season 35.0 Cheap hotel prices 24.2 Busiest UK seaside resort 12.5 We like Blackpool 28.3

Total 100.0

The following quotes illustrate this: BP 004 “I’ve been coming to Blackpool since I was six weeks old, I love the place and we have bought the hotel were we used to stay when we came to Blackpool as adults, I’d been coming to Blackpool for 40 years before I bought this hotel”. BP 113 “We looked in other parts of the country for hotels but Blackpool has by far the most reasonably priced hotels in the UK. Plus of course with the illuminations we get the longest season of any seaside resort in the UK”.



BP 120 “When we researched moving here we found that Blackpool was the busiest seaside resort in the UK with the longest season, plus hotel prices were the most affordable in the UK”.

Main Source of Income

For most hoteliers the hotel was their main source of income; eighty-eight per cent of the hoteliers said that both they and their partner worked in the hotel business and that this was their sole business. Thirty-two per cent did work or have business interests outside of the hotel. Working together was often cited as a reason for the hotel purchase and the change of lifestyle and the following statements support this:

BP 063 “We both work in the business, because that was the point of buying the hotel so we could work together and spend time together as a family”. BP 071 “Our aim was to work together in the business and when we first started we thought that one of us might have to go out to work for a while to help with money, but we have had a good season this year and we have enough to last through the slow period and into next season and to redecorate the hotel, so we think that we are doing well”.

A number of hoteliers had a working partner; this was either career focused or just

working while the hotel business became established. Two such hoteliers explained: BP 010 “My partner works for Blackpool Council and I run the hotel, my partner helps when he can at weekends and in the evening. We are hoping that in while he will be able to give up his job and work full-time in the business, but when we took over here we needed to do a lot of work to the place to get it up to scratch and this as meant ploughing most of the money we have made from the business back into the hotel on new equipment, beds, decoration and furniture so my partners salary helps us get by whilst we do the place up”. BP 047 “Yes we have business interests outside of the hotel, the hotel is the latest, we have two fish and chip shops in Blackpool doing very well and we fancied a hotel, really it makes sense we were running two lock up businesses and paying a mortgage on a house, now we have a home with an income that pays for itself really and the two businesses as well”.

Again, this reinforces the idea of letting space in their house to produce extra income.

The majority of respondents talked about five major business elements, all these were based around business generation, making a success of the business, to refurbish the hotel to their standards, to become more established, to increase mid-week business, and to develop and increase the repeat business of their existing customers. The preferred customer base was often identified as “nice people”; the sort of people they wanted as customers were in fact like themselves or people who would clearly hold similar values to the hoteliers.

Clearly there were overlaps in the data and the analysis reflects this in that the strongest or most talked about element was listed first or counted as first choice (see Table 9). The following quotes are typical of what the hoteliers described as their aims for the hotels:

BP 079 “Our aim is to expand the customer base, the owners who had it before us ran a ‘stags and hens’ hotel, it was very basic and run down, but we expected to



invest because of the price we paid for this, it was low even by Blackpool standards. We have poured money in to decorate the place, new bedding, and furniture and make the place a homely family hotel again. Most of the hotels on this street are family hotels and after what we’ve heard about the former owners of this hotel, I think most hoteliers on this street must have been glad to see us move in”. BP 116 “We want to upgrade the hotel to as high a standard as possible, this hotel was OK when we got it but we have spent a lot raising the quality of decoration, bedding and furniture, it is now coming up to our standards, we inherited a good customer base, most of our guests are nice people and many have stayed with us more than once we are getting a lot of business from recommendations and I’m pleased about this because then you tend to get the same sort of people”.

Table 9 Hotel Owners’ Aims and Ambitions

Element %

To build and make a success of the business 35.0 To refurbish and improve the standards in the hotel 17.5 To become more established and have more mid-week business

12.5

Looking to sell up, or retire from the business 12.5 To develop and increase repeat business of ‘nice’ customers who met with the owners’ approval.

22.5

Total 100.0

Establishing the Business

The majority of respondents were aiming for their businesses to become more

established during the next twelve months. Those who had been in business for 3 years or more were aiming for “much more of the same”, they often talked about a “steady lifestyle”, very few had any plans to expand their business or trade up to a bigger hotel. The next quote is typical of the significant majority of hoteliers in that they were focused on building the business and attracting the “right” kind of customers;

BP 034 “Our aim is really just to continue to build the business, especially midweek trade, we have been struggling for some time to get people in during the week, the trend seems to be that Blackpool is becoming a weekend destination, but a lot of my customers are retired and could come anytime so I have been sending out vouchers to my regulars offering them discounted breaks in the mid week, that has helped a bit but it’s late in the season now, so I’ll do the same thing again in the spring and hopefully it will increase the midweek trade”.

Selling Up and Moving On

Twenty-nine hoteliers were considering or planning to sell their hotels some with mixed feelings about doing so. One hotel owner expressed:

BP 006 “We are planning to sell up, as the customers are getting worse we used to have really decent people booking, but now it is all ‘bell ringers’ and you never know what you’ll get, recently we had a family group come to the door they looked really respectable, and ‘conned me’ by saying that they usually booked but couldn’t get in at the hotel were they normally stayed, they were excellent guests, complements about the food and the room, but when they left they took everything that wasn’t



nailed down with them, sheets, towels, table lamps, pictures off the wall, I called the police but it appears that they give false details when they booked, they even ‘nicked some of my ornaments from the lounge. We were thinking about selling up and this has really made up our minds”.

Another disappointed hotel owner said: BP 051 “We both really wanted this so badly when we started it was our dreams come true, but over the last two seasons it has turned into a nightmare, this place is a ‘money pit’ we always seem to be spending on it. Really we haven’t made any money since we moved in and now I have lost interest and we want to sell up, trade is dropping for family hotels in this area because of the ‘stags and hens’, the centre is almost a ‘no go area’ at weekends now with single sex groups all over the place, usually drunk at lunchtime, peeing in the street, a few weeks back I drove through the centre of Blackpool at 3pm in the afternoon and it was packed with single sex groups most of them drunk, and I couldn’t believe my eyes I saw a group of girls exposing themselves across the road to a gang of lads, and there were families about at the time I couldn’t believe what I had just seen”.

True Lifestyle Business

Some of the hoteliers were true lifestyle businesses; the following from one of the

respondents sums this up: BP 001 “We have considered retirement, but we both like the life and we don’t really want to retire, we are having a good time running the hotel and over the years many of our guests have become our friends and often come several times a year, sometimes I think just to see us. I have got the hotel full this weekend again, and with mainly regular guests, I’m talking to you now and just before you called I was having tea with four guests who have become good friends we were having a right ‘good chinwag’ I would miss this lifestyle, the hotel is my life”.

The Hotel Support Networks

The hoteliers appeared to get information via informal networking among the

hoteliers. This appeared to be a significant practice; the data suggests that most existing hoteliers pass on information and support to “new comers” in their street. Clearly, some of this was “self interest” in that if the street had good hotels of similar price and quality this attracted the type of clientele the hoteliers wanted. A significant majority of respondents said that the previous owner or other hoteliers on that street “had put them in touch” with the very popular Blackpool Hotel and Guest House Association (BHGHA), or other agencies supporting Blackpool hoteliers such as Blackpool Tourism Bureau. Only in a very few limited cases had people found out about the support agencies themselves. The following examples support this:

BP 076 “We bought this hotel from a couple who were retiring and they were very good, we had a lot of help and advice from them, including recommendations to join the BHGHA and Blackpool Tourism Bureau, with hindsight we were lucky, I’ve heard so many ‘tales of woe’ from other hoteliers in Blackpool about how they were conned by the departing owners it makes my hair stand on end”. BP 080 “We had just moved in when some other hoteliers on the street came to see us and offered us help if we got stuck, I was really impressed by this, on our street we tend to work together passing on bookings trying to keep the business on the street that’s how I found out about the BHGHA, Blackpool Premiere Holidays, and



Blackpool Tourism Bureau. All of the agencies are helpful but we benefited most from the informal network of hoteliers on the street”.

Most respondents agreed that the business support or training that they had received

from the trade associations was of good quality and that being a member of one or all of the Blackpool trade associations was an added value for them in accessing information. Typical comments were as follows:

BP 004 “The BHGHA have been very helpful without their support it would have taken a lot longer to get things done, they helped us with accreditation and to some extent set us on the ‘right track’ because we were floundering when we first started in the hotel”. BP 005 “The BHGHA is excellent nothing is too much trouble for them, and they helped us do most of the essential training mainly through Rosebud Training Ltd who I can highly recommend”.

Hotel Ownership, the Reality Bites

Many of the owners had purchased their hotel with little research, no business

experience or knowledge, and often self-confidence bordering on insanity. This was the kind of problems the BHGHA and the Tourist Bureau where dealing with on a daily basis. The following from hoteliers illustrate this:

BP 013 “The Blackpool Tourism Bureau have been great, we had no idea what we were letting ourselves in for when we bought this hotel, we thought it would be easy, WRONG, we were struggling from the word go, but we contacted the Bureau and they came to see us, sorted out the mess we were in and set realistic targets for us and set up suitable training to help us, we owe them a lot”. BP 024 “The BHGHA is very helpful and they are just a telephone call away, they have helped us with accreditation and training issues. I have reservations about the Blackpool Tourism Bureau, as I feel they set goals and targets that are too tight and the constraints that they set are not always achievable, for example, to get grants for refurbishment you need to ‘jump over various hurdles’ set by them and then after all that you are restricted to the amounts [size of grant] available in the RB6 area, and this criteria is even beyond their control, even then if you get a grant you have to use their approved trades people who are far more expensive than other trades people in Blackpool ”.

Many of the respondents spoke of help, advice, and training delivered by the trade

associations; however, training was often driven by compliance and changes to the legislation surrounding the hotel sector rather than free choice and a desire to upgrade skills. The following quotes illustrate the thinking of hoteliers taking further training:

BP 055 “We like to keep up to date with changes in the legislation, the Blackpool Tourism Bureau are good at organising courses around the legislation, we are due to go on a risk assessment course in November”. BP 071 “Yes, I’m on a Marketing course called building your business at the moment, this is run by Blackpool Tourism Bureau, its one day a week over 8 weeks, so far it’s been very good and I have used some of the ideas about advertising in my hotel”.

The significant majority of hoteliers were not considering future training other than

compliance training. Many of the hoteliers who had been in business for more than 3 years



felt that they were experienced and qualified enough to deal with the business. The next quote is typical of this group of respondents:

BP 015 “No I’m not interested in any training at the moment, we’ve been in this business for 28 years now and I don’t think that there is an awful lot more to learn. Many of the business courses are marketing based and will no doubt be useful to people new to the hotel business, but after 28 years we’ve seen most ideas and tried them, I doubt if we’d learn anything from courses like this that would be of benefit to our business”.

Conclusion

Blackpool’s hotel sector is dominated by micro-firms typically managed by owner managers operating just one hotel and employing few, if any employees; normally the businesses are operated by family members. The motives of the hotel owners are usually lifestyle driven, with people wanting to work for themselves, or “have a home with an income”. Thirty-five per cent of the survey sample had been in their hotel for over 3 years, thirty-two per cent were in their first year and thirty-two per cent had been in their hotel between one and three years. The hotels in the survey varied from small guests houses often described as hotels however, usually these premises had about 3-5 letting rooms the majority of hotels in the survey less than 10 letting rooms. The largest hotel in the survey had 42 rooms.

Eighty-two per cent of the respondents had lived in a dwelling house prior to starting in the hotel business. Typically, the most popular method of funding the hotel purchase was the sale of a house; 64.3% of respondents used this method to fund their hotel purchases. The data suggests that in the majority of cases the sale of the house paid for the hotel. Just a small minority, 10.8%, moved from another hotel, and just 6.7% of respondents had lived at another business address prior to moving into the hotel. The significant majority of respondents had mainly lifestyle reasons for starting in the hotel business, for many it was the realisation of a dream. The significant majority thought that it was an easy business to start, which required no particular skills. Most identified “ideal customers” as “nice people”; this was “code” for people like themselves.

The levels of prior hospitality or hotel management experience varied greatly among the hoteliers, with less than ten per cent having had any “real experience” of hotel ownership. Many claimed to have some general business experience, usually from their last jobs. However, fifty-nine per cent of respondents said that they had no business or hotel experience at all when they started in their hotel business. The majority of respondents were aiming for the business to become more established in the next twelve months, to have increased and continued repeat business and continued success. Those who had been in business for 3 years or more were aiming for “much more of the same”, they often talked about a “steady lifestyle”, very few had any plans to expand their business or trade up to a bigger hotel.

The turnover in ownership among these respondents was just over 24% and this compares favourably with earlier interview estimates from Blackpool’s professionals, which put the rate at between 20% and 30%. Although a small number were selling the current hotel to buy a larger one, many more were leaving the business because trade levels were lower than anticipated, or the hotel experience did not match their expectations, or that they had unfortunate or bad customer experiences. Conservative estimates suggest that the value of the properties changing hands through the hotel market in Blackpool could be as much as £60million per annum and that takes no account of the cost to customers and operators. Certainly these levels of change in hotel ownership do have serious implications



for Blackpool’s tourism policy, because of the low skills levels of new operators revealed by this study.

There appeared to be an informal network among the hoteliers in passing on information and supporting new comers to “their street”; some of this was self interest in that if the street had good hotels of similar price and quality this attracted the type of clientele the hoteliers were targeting. In many cases the previous owner or other hoteliers on the street had put the current hotelier in touch with the popular Blackpool Hotel and Guest House Association (BHGHA), or other agencies supporting Blackpool hoteliers such as Blackpool Tourism Bureau. The significant majority of respondents thought that the business support or training that they had received was good and that being a member of the associations was an added value for them in accessing information. Just over 38% of the respondents were considering or were due to go on training courses in the near future. However, often this was driven by compliance and changes to the legislation surrounding the hotel sector in the UK rather than free choice or a desire to upgrade their skill set.

In summary, this paper suggests that those managing small accommodation properties in the form of guest houses and small hotels have more lifestyle ambitions for their commercial operation, rather than classical entrepreneurial motives. That said, there is likely to be an array of degrees of entrepreneurialism. At one end, people offering rooms in their house because they like the company, or because they can generate “extra money”; at the other end, there may be people who dream of making lots of money and owning a chain of hotels, with of course all manner of options in between. At this stage, it is important to know much more about the varied motives and needs of these different entrepreneurs. Certainly, Blackpool’s attempt to support and “professionalise” the management of small hotels needs to adopt and send different messages to different types of entrepreneurs, and flowing from this there is a need for those in the tourism authority to be much more informed about the sector and varied motives of those providing accommodation services in the resort. The current Blackpool Tourism Board strategy to develop the seaside resort and move it “up market” is being seriously “hampered” by the lifestyle businesses and the high turnover of hotel property in the resort.

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