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Corporate social responsibility and business ethics

For several years, there has been much deliberation concerning who ought to be accountable for ensuring that tourism destinations are developed in a way that “meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED 1987, p. 7). Due to the numerous stakeholders involved where destination level sustainability is concerned, it is particularly difficult to decide who, if any, holds more responsibility than another.

This essay shall address the various stakeholders and attempt to give reasoning as to whether or not it is just to judge tour operators as being more liable than any other interested party in the tourism industry to encourage sustainability. Tourism has both positive and negative impacts on destinations and their inhabitants.

Whilst benefiting from an increase in revenue, job creation, improvements in infrastructure and amplified awareness of local people and their environments, destinations simultaneously suffer from exhaustion of resources, lack of respect for local cultures, disturbance of indigenous communities, and perhaps most significantly, a rapidly increasing pollution rate as a result of development of areas to meet the needs of tourists.

In order to minimise such negative effects, it is crucial that tour operators, tourists, local communities, local businesses,

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local governments, trade associations, NGO’s, and charitable bodies work together and promote sustainable tourism. There are several principles of sustainable tourism including the sustainable use of resources, management of consumption and waste, diversity maintenance, the integration of tourism into planning, support for local economies, improving local communities, communication between stakeholders and the public, training staff efficiently, marketing tourism responsibly, and undertaking research (WWF UK, 1992).

Although each of the aforementioned groups has an important role to play with regards to sustainability, it is necessary to analyse which should primarily be responsible and to what extent they can be. The function of tour operators is to act as intermediaries between customers, accommodation providers and transport companies in order to comprise a package of the vital elements required for a holiday. Tour operators therefore have the capacity to influence visits to diverse destinations regardless of their scale.

The tourism industry currently consists of two main tour operators dominating the market, which formed when “TUI UK” merged with “First Choice Holidays Plc” in September 2002 to create “TUI Travel Plc”, and the integration of “My Travel Plc” with “Thomas Cook UK Ltd” in June 2007, which created the “Thomas Cook Group Plc”. These mergers have enabled concentration of the tourism industry so that costs can be cut through economies of scale and tourists may benefit from cheaper holidays.

It could be said that these “Big Two” tour operators work in a way that appeals to the mass market, providing fairly standardised products, and are generally in pursuit of economic gain. Despite this market dominance, recent years have seen an increase in the number of independent tour operators that exist, such as “Geurba” and “Tribes Travel” which are part of The Association Of Independent Tour Operators (AITO). These focus rather more on the provision of more specific holidays that focus on more unique activities, such as African safari holidays.

It is a common misconception that mass-market tour operators such as “TUI Travel Plc” are the most damaging enterprises to sustainable tourism and people are quick to make the assumption that small-scale tour operators are the best option. Many holiday makers tend to presume that they are taking greater care for their surroundings should they book to go on holiday with an independent tour operator promoting the concept of eco-tourism. This type of holiday is generally seen as being a “green” holiday, which automatically offers people absolution and convinces them that they outweighing some of the negative impacts created by mass tourism.

In fact, it is frequently the independent tour operators who focus on unique trips to exclusive destinations that cause unrest and disturb local communities whilst attempting to satisfy niche market desires of those who wish to enjoy a more individualised experience. Whatever their size, it makes economic sense for the tour operators to ensure that their selected destinations continue to satisfy consumer demand in the long term as the cost and resources required to source and market new destinations are prohibitive. Complacency is therefore not an option where responsibility and sustainability are concerned.

Failure to recognise potential damage and act to prevent this could have serious consequences, at all levels, for their business. It is all too easy for one to believe that they are acting responsibly simply due to the nature of the business, but in reality the damage they are causing can go unnoticed. Corporate social responsibility and business ethics vastly influence how responsibly tour operators act. If a tour operator is more concerned with satisfying shareholders of their company, then profitability is likely to be their main incentive, presiding over the well being of local communities and other stakeholders.

Shareholders often do not wish for shifts towards greater corporate and social responsibility as it is worried that methods to reduce the negative impacts created by tourism will reduce the prosperity of the company, leading to a lower return on investment (UNEP 2005, p. 10). For a long time, it has been argued by tour operators that they are primarily responsible for their shareholders and looking after their business, and that destination level sustainability was not their duty to address.

Tour operators often claimed that they had no direct adverse impacts from within their offices and they preferred to shift the responsibility onto local governments and tourism suppliers within destinations (Carbone et al 2005, p. 261). In more recent years, however, tour operators have taken into account that they have immense power to influence choices of holidaymakers and they have the ability to sway the practice of suppliers in order to encourage more sustainable development (UNEP 2005).

According to Carbone, tour operators have begun to make vital contributions to furthering the goals of sustainable tourism development and are striving to protect the environmental and cultural resources on which the tourism industry depends for its survival and growth. Consumer awareness has been raised by the creation of trade associations and voluntary groups such as the Federation of Tour Operators (FTO), the Association of Independent Tour Operators (AITO), the Tour Operators Initiative (TOI) and Tourism Concern.

Such groups of tour operators have emerged due to the realisation of the growing demand for green consumerism. Whether or not they believe that they ought to be responsible for sustainability, they have influenced demand and brought together the tour operators who provide holidays catering for these consumer desires, encouraging these organisations to become more responsible. Tour operators are beginning to learn of the practical steps they can take and are, indeed, forced to take due to the nature of demand arising.

Even mass-market tour operators such as “First Choice Plc” are placing enormous emphasis on the fact that they are operating responsibly and they claim that they are “a leader in promoting sustainable tourism, committed to developing unique and innovative ways to support the environment and people” and that they “work with a wide range of organisations that help us understand the right thing to do with respect to the environment and people” (First Choice 2008).

In addition to such statements being made public, tour operators have also produced reports outlining their stance on their personal corporate social responsibility. “Thomas Cook Group Plc” has made clear in its “Responsible Tourism Policy” that they feel that destination level sustainability is an important factor in their operation. They strive to conduct business in a responsible way, minimising impacts, and simultaneously maximizing financial benefit (Thomas Cook Group Plc 2007).

Despite an apparent consciousness of tour operators to become more responsible, there is no guarantee that this has arisen as a result of genuine concern for destination level sustainability. Several independent tour operators such as “Audley Travel” are operating in a way that holidays are purely designed in a way to promote responsible travel and displaying a true passion about the countries in which they specialise.

This has resulted in them winning awards such as The Guardian’s “Best Tour Operator” award for 2007, and being granted the highest possible Responsible Travel rating from AITO. While these types of tour operators are making a concerted effort to be responsible for sincere reasons, it may be suggested that several of the other tour operators who have made statements claiming to be responsible are simply using this as a marketing ploy to influence demand in an increasingly growing market for sustainable tourism package holidays.

It is important for tour operators to make a good impression on their potential consumers and this is being done by promoting the idea of responsible tourism through statements on their websites and laying down guidelines on their websites as to how tourists may behave correctly in order to assist the struggle towards sustainable tourism. Companies for whom profitability and wellbeing of their shareholders is key would be very eager to build up their customer base in order to increase profitability, perhaps charging higher prices for tourists to benefit from theoretically more unique eco-tourism holidays.

The actions of such tour operators may appear to be ethical and moral, in the best interests of destinations with which they liaise, but in reality could be somewhat self-fulfilling. It has been suggested that “if market advantage is not the force which drives companies forwards towards responsibility, then [… ] is it negative PR” that encourages companies to act, or appear to act, more responsibly (Miller 2001, p. 595).

Certain tour operators have endeavoured to remove this preconception by sticking up for themselves and claiming that efforts to be responsible are due to them holding themselves responsible because they know they have the capacity to be, rather than putting on a front in an attempt to woo consumers. A spokesperson for First Choice has said, “the case for being serious about sustainable development is clear, and does not depend solely on our customers’ expectations” (2006 p. 42). This perhaps suggests that tour operators really are opting to take responsibility, at least to some extent, for sustainability at a destination level.

At this point, one may deem it conceivable to say that responsibility is most important to consumers if there are people assuming that tour operators are acting in a manner to simply satisfy consumers rather than perhaps to absolve guilt of previous damage caused by tour operation or to reduce any further damage. Today’s tourism industry is increasingly switching away from mass-market producer-driven tourism towards being more consumer-driven, enabling knowledgeable, responsible consumers to put mounting pressure on the industry to behave more responsibly (Kamp un-dated).

If this is the case, then it might be suggested that consumers themselves ought to be responsible for ensuring sustainability, rather than putting pressure on tour operators. If consumers integrate themselves into local destinations in the correct manner, disturbing indigenous communities to the smallest degree possible, yet helping them economically, then one might say they are acting responsibly with regards to sustainable tourism.

On the other hand, it is extremely difficult to expect consumers to know how to conduct themselves if they are not given guidelines suggesting appropriate behaviour. Without adequate education and awareness it is difficult to expect consumers to know how to be responsible and one would expect the tour operators, who are making it possible for tourists to visit certain destinations, to produce such guidelines.

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