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  Chapter 7   Sustainability   Sustainability is especially ripe for political controversy and opposition because fundamentally it is a new paradigm that represents significant challenges to the status quo

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Chapter 7   Sustainability

 

Sustainability is especially ripe for political controversy and opposition because fundamentally it is a new paradigm that represents significant challenges to the status quo. The paradigm of sustainability, with its notions of limitations and carrying capacities confronts dominant paradigms of progress which do not recognize limits to unchecked growth." --
                                                                       Hazel Henderson, Economist

 

Chapter Review

 

This chapter is perhaps the most important of all and has been left till last to allow theories to be explored and grasped so that this final chapter sees the reader prepared for what must be the underlying focus of all – true sustainability of the business.

 

This chapter will give a brief discussion of sustainability, and then give an insight into its application and importance within the hotel industry.

 

 

 

Introduction

 

In 1987 the World Commission on Environment and Development (WCED) introduced the term ‘sustainable development’ and it has been defined as “development which meets the needs of the present without compromising the ability of future generations to meet their own needs.” There have been a number of authors (Holmberg, 1992; Pearce, Barbier, and Markandyn, 1990; Reid, 1995) who have helped with the interpretation of the original WCED report, and have assisted with a wider understanding of what sustainability means in a modern environment.

 

Sustainability is becoming an important focus being directly related to the resources available and how those resources are used today and into the future.  The concepts and application of sustainability is an important component in the management of any business.  Human kind has reached a point in the history of the world where it needs to rethink where it is going and how it is going to get there. In many respects over the past 350 years, humans have built their hopes and dreams for progress on the concept of unlimited economic growth. This thought has lead to the belief that more production and consumption are good regardless of the impacts of such actions in areas such as the environment and society. However, there is a vital relationship between continual growth and available resources and the future which requires serious consideration. At the heart of the decisions that have guided businesses for the past 350 years is the image of the economy being a closed circular flow. In this the resources are transformed by businesses into products and services that are purchased by consumers. Such a model is isolated from many of the social impacts.

 

 

Figure 7.1 Closed Economic Flow
Business Resources transformed into products and services		Consumer Purchases the products and services who demand more Products and services.

 

 

Within the hospitality industry there are many ways in which to talk about sustainability including such things as recycling napkins, the use of energy saving light bulbs or the use of energy produced in the kitchen to heat a hotel’s water. While these measures can assist in some small ways, and are often more profit motivated than sustainability motivated, a much wider view is required. In this book the concept of sustainability flows through and is part of everything that happens in the hotel. Sustainable management is not about how managers do things to try and make a business more sustainable, it is how the managers view the business and the environment in which the business operates. As management in a hotel think about the day to day operations, long term financial viability, the employees, other resources  all of these need to be evaluated in a sustainable way. Figure 7.1 illustrates the relationship of the elements of the model of interrelationship.

 

 

 

Location Yield Management Resource Management Empowerment Human Resource Marketingg Ecological Health Economic Success Success Social Responsibility

Figure 7.1. Elements of the Model of sustainability.

 

 

 

 

 

 

As is illustrated in Figure 7.1 the six areas covered in this book are illustrated connecting together in an environment of Economic Success, Social Responsibility and Ecological Health (Daub Ergenzinger, 2005; Gupta, McDaniel & Herath, 2005). It is not suggested that these are the only elements that management need to consider but it does give some indication of the importance of each element in a connected environment. Sustainability cannot be considered in isolation, it needs to involve all the stakeholders of the hotel, this includes the guests, employees, suppliers, competitors, owners, investors, local and national councils and governments and so on, those who have an interest in the continued operation of the hotel. Each chapter in this book aims towards promoting sustainability and the long term success of the business, for example, in the chapter on yield management, it is possible to have maximum occupancy percentages as a primary goal. Internationally there are examples of companies who do that, but without consideration that the many factors which interconnect could lead to an unsustainable situation. The short term gain may be high, but unless consideration is given to such areas as the depreciation of the property, the employees, the facilities and the impact that high occupancy has on them, this objective may not be sustainable.

 

Changes in a market can have a profound impact on a hotel. External changes to a market which may be uncontrollable by the individual hotel can have flow-on effect and impact on the mix of the accommodation available so all providers are influenced. Some of the issues that are important to sustainability were discussed with the senior management within the industry during the interviews and especially those in Spain revealed some very interesting issues. They are included here as they show examples of the interconnectivity that the elements have on a hotel.

 

Rafael de la Fuente, Director Gerente, ESCUELA DE HOSTELERIA, Malaga, Spain How has your market changed in relation to sustainable business practices?

Traditionally we were the upmarket area here – Marbeja always had the finest hotels, the finest restaurants, they always had the facilities for the upmarket visit.  Already this year we can see very clearly that type of upmarket customer somehow is slowly disappearing and hotels are having to replace them with a different type of customer.  There are two negatives here – number one, you are losing prime profit; number two, where you were practically alone, you had your competitor in Mediterranean, Sardinia and the more exclusive resorts in the French Riviera.  Now if you go below in the market you have to compete with everybody.  It is a no-win situation.

 

As illustrated above, changes in the market are putting all the hotels in a venerable situation. This is not just a marketing problem - the market as a whole is changing and that is affecting the sustainability of the whole market, not simply the profitability of the hotel, but all the impacts that from the market change throughout society. The susceptibility of hotels to external factors is also illustrated from the following extract about Torremolinos, which shows similarities to what is is beginning to happen in Marbeja. What is important to reflect on in both situations is the impact that management decisions have during such a decline in a market, and if better decision making at an earlier time may have changed the outcome.

 

 

Rafael de la Fuente, Director Gerente, ESCUELA DE HOSTELERIA, Malaga, Spain What lessons could managers learn about the vulnerability of the hotel industry?

In the late 50s and early 60s Torremolinos was the most fashionable place in Spain.  Torremolinos had a concentration of 6 super quality hotels within a fairly small area. They also had the greatest concentration of fine restaurants, boutiques and all the amenities geared to a  benevolent kind of tourism.  At the same time it became very quickly a very strong tourist destination in southern Europe - it was like a miracle.  At that time Spain was emerging from a long post war period.  The war had finished 10-15 years before that.  It was incredible because there were non-stop flights from major European cities but very quickly it was spoiled and destroyed.  Then Torremolinos became a symbol known not for excellence, not as a very high quality, sophisticated tourist resort but just the opposite - atrocious buildings all over the place. Some of those hotels of the old days still exist but a shadow of what they once were.  The clientele in a very short space of time, maybe couple of years, just moved somewhere else.  We already have had an experience but we don’t seem to have learned from it.

 

Hotels and the environment in which they operate change continually throughout the world and clearly some can follow a ruinous course. In the chapter on yield management there was a discussion of the impact that price can have on a property’s continued operation. In the following extract other plays become more evident, in particular the interaction with there parties in the sustained operation of the hotel.

 

 

Rafael de la Fuente, Director Gerente, ESCUELA DE HOSTELERIA, Malaga, Spain Why is a sustainable view important to management?

I see so many times in Canary Islands and Ozores: when you open a hotel and you have a debit in the bank of 50 million Euros and you have to pay 200 staff every month;  there is social security costs and water, and power, and insurance and so on and you don’t have a good cash flow or a big solid company behind you, so you start selling very cheap.  Two things happen:  you have to sell every day more cheaply – so you can’t give the good service and the good food and every day you get less customers.  The bank says you have to pay me interest, or we sell.  So every day you owe them more.

 

As previously discussed in the chapter on human resource management, the need for staff is one of the most pressing issues within hotels. There are many demands placed on employees that can influence the quality of the hotel, and thus influence customer satisfaction (Daub Ergenzinger, 2005). Generally around the world there seems a reluctance of young people to enter the industry. The following are two excellent examples of innovative ways to influence the perception of the industry and give it a better social image.

 

 

 

Christine Collier, Managing Director, CUMBRIA TOURIST BOARD, Cumbria, England What actions are being taken to impact on potential staff and society’s view of the hotel industry?

To try and develop the accommodation business and to encourage and educate potential recruits we have developed a proactive approach. The scheme has produced some really good results.  Because some of the research suggested that why our local children won’t go into the industry, is that they will do a week’s work experience in a hotel, have a terrible experience and come out saying that is the last time I will ever darken the door of a hotel.    So we worked with the school children to produce a work experience pack where the children have a copy and the hotel has a copy.  The hotel doesn’t have to think about or work hard at it, they just implement it, it is a nice simple checklist approach.  The child gets a better quality experience, a much more varied experience and is much more inclined to want to come back and enter the industry.

 

 

The cyclical changes that impact on hotels flows through all parts of society.  The employment of staff is not simply a factor of availability, it is also influenced by other opportunities available to the potential employees.

 

Rafael de la Fuente, Director Gerente, ESCUELA DE HOSTELERIA, Malaga, Spain Are there sufficient staff for the industry locally?

In this area where there is a tremendous building boom going on, a lot of young people have decided to work in the building industry because they can get much more money, the hours are easier and so on.   But the amount of money they receive and their very jobs are not for the long term because when these buildings are finished, a lot of young workers will try to go back to the hospitality industry and then the problem will be their lack of training.  For highly skilled and trained people right now we are being extremely well paid compared to other professions.  Chefs, and waiters are right now being offered some very good salaries and splendid working conditions.

 

 

Summary

There are two distinct but highly related considerations regarding sustainability.  The first is the sustainability for stakeholders of the successful hotel business.  The second is the over-arching consideration of sustainability for the planet and the future. This chapter has tried to bring together some of the factors that influence a hotel’s operations from not only within but without the hotel. As you review each of the previous chapters, although they could be considered as discrete and the management of the issues likewise, as is evident from Figure 7.1, that is too simplistic an approach. For a hotel to operate successfully it must be managed in a sustainable way so that move issue does not dominate the decision-making process and a balanced approach is taken. Hotels use large amounts of energy, natural human resources, and have impacts on society which need consideration from a holistic view.

 

 

Discussion of the issues

 

1. Evaluate Hotel Location in a sustainable business environment, identify local and international issues that influences on such an environment?
2. Evaluate Hotel marketing in a sustainable business environment, what are the influences on such an environment?
3. Evaluate Hotel Human Resources in a sustainable business environment, identify local and international issues that influences on such an environment?
4. Evaluate Hotel Empowerment in a sustainable business environment, identify local and international issues that influences on such an environment?
5. Evaluate Hotel Resource Management in a sustainable business environment, identify local and international issues that influences on such an environment?
6. Evaluate Hotel Yield Management in a sustainable business environment, identify local and international issues that influences on such an environment?
7. Draw up an active plan of how your management style will influence sustainability.

 

 

References

Holmberg, Johan, ed. (1992). Making development sustainable. Washington, DC: Island Press.

Pearce, D., Barbier, E., & Markandyn, A. (1990). Sustainable development: Economics and environment in the third world. London: Earthscan.

Reid, D. (1995). Sustainable development: An introductory guide. London: Earthscan.

Daub, C-H., & Ergenziner, R. (2005). Enabling sustainable management through a new multi-disciplinary concept of customer satisfaction. European Journal of Marketing, 39(9/10), 998-1015.

Gupta, A., McDaniel, J.C., & Herath, S.K. (2005). Quality management in service firms: sustaining structures of total quality service. Managing Service Quality, 15(4), 389-402.

 

an overview of the chapter 7 plus answer the Discussion Questions; each question and the overview should be at least half a page in length. The chapter assignment must include at least 10 quality references overall and at least two per question to demonstrate that you have completed additional reading. The references used MUST NOT be the same as those used in the book chapter.

Need these discussion questions answered apart from the overview.

C:Evaluate Hotel Human Resources in a sustainable business environment, identify local and international issues that influences on such an environment?

F:Evaluate Hotel Yield Management in a sustainable business environment, identify local and international issues that influences on such an environment?

G:Draw up an active plan of how your management style will influence sustainability.