As a conscious consumer, would you agree that the travel industry needs to become more sustainable? Do you believe that travel agencies and platforms are not taking enough responsibility to protect our environment and treat local communities fairly?
In my last article, I shared my own experience when I first travelled to Africa. I learnt about the exploitation of human life in tourism and was shocked that we conscious travellers continue to book our vacation with companies that are – in extreme cases – responsible for the death of human life.
The world needed to know what I had learned, and I was ready to embark on a social media shitstorm to expose the companies responsible for those hidden abuses in travel. Just that I was also made aware that such direct confrontation might get local victims of abusive practices into trouble and do more harm than good.
I had to find a more sustainable solution to solve the problem, and so I embarked on a life-changing journey that made me understand how the travel industry really works. While it’s so tempting to point fingers at travel companies and say “it’s all their fault”, the reality is far more complex than I had appreciated.
In this article, I’ll explain why it’s so difficult for established travel companies to become more sustainable. We’ll distinguish between traditional agencies and online booking platforms – two distinct business models, each of which are struggling to combine social and environmental responsibility with financial profitability.
What is sustainable travel?
Sustainable travel can mean a lot of things. According to the United Nations (UN), sustainability is a combination of three factors: environmental protection, social responsibility and economic viability. Following this logic, sustainability in tourism means travelling in a way that preserves the environment, treats tourism workers and local communities responsibly, and can fund itself through the revenues generated from tourism.
With the recent emergence of rigorous sustainable travel certifications that independently audit local companies on-site – as opposed to just selling membership labels – it’s becoming easier and easier for the global travel industry to source socially & environmentally responsible local guides and accommodations.
1. Sustainability needs to be financially viable
It’s that crucial third part in the UN definition of sustainability – financial viability – that makes implementing sustainable travel sustainably so challenging for international agencies and booking platforms.
“The problem is that our clientele doesn’t demand this yet,” managers of well-established tour companies often tell me. “So far, it’s only a niche of travellers who would be happy to pay a premium for sustainable travel.”
I can sense that most leaders in travel sincerely care about sustainability and only have the best of intentions. However, implementing sustainability in an established business is far from easy.
“Why does sustainability need to be expensive?” you might wonder. Going camping in nature, taking a cycling trip, hiking in the mountains – there are lots of ways to travel consciously without spending a lot of money. That’s certainly true for environmental sustainability. Leading environmentally friendly hotels have also demonstrated that reducing energy and resource consumption can even have a positive impact on reducing costs.
2. Social responsibility cannot be cheap
While environmental sustainability can be cheap, social responsibility cannot be implemented without increasing costs. Treating tourism workers fairly means adhering to minimum pay guidelines, ensuring workers get access to insurance and medical treatments, providing decent accommodation and equipment, and so forth; all of which increase costs.
Social responsibility also means protecting local communities. Over-tourism has become a huge problem for the world’s most popular destinations. Limiting destructive side effects caused by excessive tourism means resisting some of the world’s biggest market opportunities and voluntarily forgoing revenues.
Hardly any travel company, however, has the luxury of excess profits. Making a voluntary decision to increase costs or forgo revenues in order to promote purely sustainable trips would threaten their own profitability – unsustainable by definition.
3. Traditional travel agents fighting for survival
Like most traditional consumer retail businesses, the business model of traditional international agencies has been fundamentally disrupted by new online businesses. Stuck with legacy expensive distribution models, their margins are being squeezed into the red by platforms that create radical price transparency and connect travellers directly to local companies.
Understandably, managers of traditional travel agencies are facing an extremely challenging time when it comes to restructuring and moving their companies back into profitability, while avoiding mass redundancies of their own employees.
Making scarce management attention available for sustainability at a time when the survival of travel agencies are under threat is a luxury; and moving to a more socially responsible business model and thereby increasing costs—financial suicide.
4. Travellers confused by too many labels
How are traditional agencies supposed to upgrade their local suppliers to more expensive ethical operators when the majority of travellers aren’t willing to pay a sustainability premium? And this at a time when they are losing clients in droves to online companies?
To make matters even worse for traditional agencies, conscious travellers are more likely to book online or travel independently, which means that travel agencies remain stuck with an above-average percentage of clients who are not willing to pay for sustainability.
This is not to say that their clients don’t care. We do care! Bombarded by thousands of agencies all claiming to be sustainable and hundreds of labels trying to make us believe that we should trust them, however, we have become more distrustful than ever before, and rightly so!
Why should we pay more if we cannot even be sure that our sustainability premium really translates into a tangible impact for local communities?
Fortunately, there are several rigorous audit and certification initiatives that will make our lives as consumers easier to help us sort the wheat from the chaff and recognize the legitimate efforts with real impact. The problem is that we consumers don’t know those labels yet.
That’s where the travel industry needs the support of the media industry to help make us conscious travellers less confused and more aware. But the media industry has its own challenges to deal with: sponsored trips, paid articles and conflicted PR agencies.
5. Online platforms prioritize price over responsibility
Given the challenges faced by traditional agencies, one might think that online platforms have a big opportunity to step into this niche. “Book directly with locals and cut out the middleman,” they offer and help us find the cheapest prices. “Book directly with a local guide to support local communities.” The vision – notable; the impact for local communities – disastrous.
The local tour operation industry is extremely competitive: Margins are small, and there is no cost basis that can be cut easily. To get business through online platforms, local tour guides need to cut prices below more established companies. To cut prices, they need to cut costs, and cutting costs means disregarding social & environmental responsibility.
Historically, local tour operators have been receiving most of their business through international agencies. This has often been a very beneficial relationship for local companies – agents bring clients, while operators can focus on guiding and operations.
When we travellers book directly with local companies through platforms, the agency margin simply disappears. The revenues that local companies receive remain unchanged.
With agencies no longer in business, local operators now need to also fulfill all the essential functions previously taken care of by their agency partners: Marketing, customer relationship management and sales; all of which increase their costs of operations and further aggravate their pressure to cut costs elsewhere – with their own people and the environment.
The solution
Here’s the good news: Technology also enables us to create more awareness and transparency, and to create innovative solutions and build start-ups with a fundamentally sustainable business model. In my next article, we will look at the solution that Fair Voyage is offering, and how every conscious traveller can contribute to a more sustainable travel future.
You can also read the official UN recommendation on how to be a responsible traveller.
