Tourism plays an important role for the world, generating 10% of the global GDP, providing one in ten jobs worldwide, and indirectly supporting the livelihoods of over one billion people. Sophie Herrmann, a partner at Systemiq, sees a high sense of urgency for the industry to get moving. "We're reaching a tipping point on climate," she warned. Herrmann is a transformation expert and serves companies across all industries. Her goal is to bring everyone to the table to accelerate the transition to a carbon-neutral, nature-friendly and inclusive economy.
On the other hand though, tourism is responsible for 9-12.5% of global emissions, Herrmann made clear in her keynote speech to HITT participants. The lion's share here, she went on, is attributable to transport, but buildings and their energy consumption, as well as catering, also increase CO2 emissions, which rose by 20% globally between 2019 and 2023. Further growth of 20% is expected by the end of this decade. "In the process, the hospitality industry is caught in the crossfire," she said. "The hospitality industry is part of the T&T system, (Tourism + Travel Agencies), which also includes OTAs and companies operating in the field of destination management or tourist information. "The sector is also connected to the larger systems that support it."
The sector does not know how important it is
The hospitality industry is thus both a cause of climate damage as well as its saviour. Herrmann had the impression that large parts of the hospitality industry are not yet aware of their importance when it comes to sustainability. Others, such as the food industry, agribusiness or even the chemical industry, are further along in terms of development in this respect. She cited various approaches that the industry could take to improve its performance. Hotels produce energy that they could feed into the grid or through which they could become a decentralized energy storage facility, she said. E-charging stations for cars, the construction of sustainable, local and resilient supply chains, or models such as urban gardening are other ways hotels can become more sustainable, she continued. Also very important is that accommodation providers are well connected to public transport services. For example, Schiphol Airport in Amsterdam offers its travellers transportation to hotels by e-vehicle.
The hotel industry has an opportunity to move things forward and be supported by other industries in doing so, Herrmann said. Above all though, the industry needs to pool its own strength to scale sustainable solutions and, above all, to make them visible. After all, 1.8 billion international arrivals are expected worldwide in 2023, with annual growth of 4% thereafter. Such dimensions draw public attention to tourism. Another of Herrmann's proposals was to collaborate with start-ups that are working to reduce food waste, for example.
"Everyone says we can't do anything because our industry is so complicated," says Wolfgang Neumann.HI William Veder
Pressure from new players
In the ensuing discussion, HITT participants were primarily concerned with the question of who had the greatest interest in the transformation of the industry and who could drive it forward. "Everyone always says we can't do anything because our industry is so complicated," Wolfgang Neumann complained, Chairman of the Sustainable Hospitality Alliance. Herrmann gave such comments short shrift. "There are complicated industries that are already moving. For example, the food industry. We just have to be smart and get organised," she said.
The pressure on the industry is significant and is growing. And it comes from many sides. Employees are even beginning to choose their employers according to the latter’s performance measured against ESG criteria. The topic has now been recognised by the industry, but - viewed from the outside - it has not yet achieved strategic significance at the executive level. The next group now putting pressure on the sector is its customers through their spending choices. Cris Tarrant, Chairman of BVA BDRC, and speaking at the HITT presented the first results from a global survey of the hospitality industry, which was completed only last week.
We will provide more details from the survey in a separate article and will also look then at the third large group that deliberately sought to close ranks with the industry at HITT: the corporate buyers and OTAs. Siemens and HRS confronted HITT attendees with their own plans for how they will increase sustainability pressure on the hotel industry. The German hotel industry serves as a kind of "experimental field", but Siemens will subsequently roll out its own standards as far as the Asia-Pacific region. The good thing about this "threatening scenario" was: The hotel industry can still enter this discussion, which the Sustainable Hotel Alliance as well as individual company representatives welcomed with open arms. The HITT Think Tank is pleased to have restarted communication between the parties here. More about that later, too.
Xenia zu Hohenlohe from the Considerate Group brought a new player into the game from which great financial pressure can also emanate: the insurance sector. It is experiencing high losses due to climate risks, she said, and is already targeting property owners to increase their building insurance premiums if the buildings do not meet certain sustainability requirements. This could become a sore point that should further encourage the real estate industry to put greater pressure on themselves to avoid losing the value of their buildings.
Reporting: The steel giant and Arabella report the same figures
The HITT not only revealed old and new weaknesses, but also sought solutions. That's why the topic of measurement was given special weight at Think Tank 2023, with some surprising findings. In the first part, Florian Huber, Co-founder and Leader of EYCarbon, described in his keynote speech the path to the 5th industrial revolution after mechanisation, industrialisation, automation and digitisation. The current revolution brings with it the greatest transformation of all: "All previous periods have increased productivity and wealth. For the first time, the transformation is now driven by government and not through technical innovation," he noted as a key message. Now, legislation determines the future and even restricts the consumption of what were, formally, public resources. In the past, people drove transformations to get rich - today, their motivation is to preserve the world for their children, Huber said.
Florian Huber presented, among other things, the EU requirements for sustainable companies. The EU wants to enable transparency for companies and hopes that they make the right decisions in the process, Huber said. Confidence in the shareholders is high, he said. It was also expected that banks would offer better financing opportunities to those companies that behaved more responsibly than others. In this context, Huber brought up the European Green Deal and the Sustainable Finance Action Plan, as well as the topics of taxonomy, green bond standards, benchmarking and reporting (which have already been discussed in previous think tanks). "[The industrial giant] Thyssen Krupp will have to report the same figures as Arabella Hospitality," the expert said by way of example. Huber expects a regulatory tsunami.
Prepare for the Double Materiality Assessment
New waves of reporting requirements include every single player in the value chain, directly or indirectly. What would need to be reported would depend on the individual Double Materiality Assessments. These are based on the idea that a company's financial statements report not only on the financial impact of its operation on the company, but also on the impact of the company's activities on society and the environment.
The hotel industry value network includes, for example, the customer/guest, project developer, owner, investor, tenant or manager, brand, employees, reservation systems such as OTAs, tour operators, suppliers, tourism organisations, trade show and convention organisers. "Disruption is needed everywhere here," Huber said.
Conclusion: The challenges do not stop
After this brief summary of two important keynote presentations, it must be clear to the sector that: It will continue to face many new challenges in the coming years. Due to the role of tourism and the immense economic and social network(s) in which each hotel is embedded, these challenges will remain complex. The public will certainly take a closer look at which hotel/hotel group is doing what and how. "Extra-creative" hoteliers who skilfully navigate a grey area in their communications as well as financing and operations should realise that much of this is no longer feasible due to the new transparency rules on the part of the legislature. In the future, the valuation of a property as well as a brand will depend on transparency and credibility.
Unique atmosphere of openness
It was again two exciting days on board the HITT, with many details and exciting statements from the experts, each time leading to an extremely lively discussion. We will report in greater detail on these discussions over the next few weeks and make part of out reporting open to the general public.
We as organisers were greatly pleased to have been told by many participants, in particular the experts who travel worldwide and give presentations in completely different industries, that they have never experienced such an atmosphere of openness with which colleagues and business partners exchange ideas.
We return the compliment to all the impulse providers, the participants and also to the sponsors, who are also content partners at HITT and participate in the discussion! The HITT community thus continues to grow, becoming more and more international and, with each new think tank, more strongly perceived as a serious, content-rich industry platform. / Susanne Stauss, Maria Pütz-Willems
