The future of the travel & tourism industry will be shaped by a range of disruptive themes, with environmental, social and governance (ESG) being one of the themes that will have a significant impact on lodging companies. A detailed analysis of the theme, insights into the leading companies, and their thematic and valuation scorecards are included in GlobalData’s thematic research report,ESG (Environmental, Social, and Governance) in Travel and Tourism – Thematic Research. Buy the report here.
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According to GlobalData’s Q3 2021 Consumer Survey, 56% of global respondents stated they ‘somewhat’ or ‘completely’ agree that they are more loyal to brands that support green and environmental matters, and 54% echo this sentiment for brands that are loyal to human and social rights matters. These strong percentages suggest that companies with transparent ESG strategies, which can demonstrate positive work to address environmental and social issues, could win the loyalty of travellers that may be undecided on which company to use for a specific aspect of their trip. Transparency on ESG matters will not only appease consumers; it is now required by several other stakeholders and potential future ones. Investors will often assess a company’s ESG performance when conducting due diligence. Therefore, many company directors are allocating increasing amounts of capital and resources to address ESG aspects and increase attractiveness. According to a GlobalData poll (ended October 19, 2021, with 1,500 responses), 78.7% of respondents stated that their company now monitors ESG performance directly alongside financial performance.
Addressing geopolitical issues has now been pushed to the forefront of ESG strategies. The contracts that the likes of Marriott and Accor have with franchised hotels in Russia means that they cannot simply just shut down their branded properties. To avoid negative sentiment, these hotels have released impactful social strategies to contribute positively to the Ukraine crisis, as seen with Accor providing humanitarian relief to refugees, with at least 15 of its hotels opening their doors.
However, not all companies are equal when it comes to their capabilities and investments in the key themes that matter most to their industry. Understanding how companies are positioned and ranked in the most important themes can be a key leading indicator of their future earnings potential and relative competitive position.
According to GlobalData’s thematic research report, ESG in Travel & Tourism, leading adopters include: Melia, Minor Hotels, Hilton Worldwide Holdings, InterContinental Hotels Group (IHG), Accor Marriott International, Hyatt Hotels and Choice Hotels International.
Insights from top ranked companies
Accor is a hotel operator. The company manages and franchises luxury, upscale, midscale, and economy hotels. It operates its establishments under various brand names in the economy sector including ibis, ibis Styles, ibis Budget, and Jo&Joe. Its operations span Europe, the Middle East, Africa, North America, Central America, the Caribbean, South America, and Asia-Pacific. Accor has been widely praised for its sustainability programme, Planet 21. Launched in 2016, it is built around six action areas: employees, customers, partners, communities, food, and buildings, to limit the company’s negative impacts. Accor hotels have a ‘Planet 21 In Action’ roadmap which sets out ten mandatory benchmark actions. In 2021, 93% of its hotels had implemented these benchmarks which have helped achieve encouraging results. 1,882 Accor hotels rolled out its programme to combat food waste, 1,218 urban vegetable gardens have been plotted, and hotel operating waste has been reduced by 57%. Accor has also been working with European authorities and organisations to provide humanitarian relief to refugees from the Ukraine crisis, with at least 15 hotels, five of which are in Paris, opening their doors to help.
Intercontinental Hotels Group (IHG)
InterContinental Hotels Group (IHG) is a provider of hospitality services. The company owns, manages, leases, and franchises hotels and resorts. IHG operates mainstream, upscale, and luxury hotels under various brand names such as Regent, InterContinental, Kimpton, Hotel Indigo, EVEN Hotels, HUALUXE, Holiday Inn Resort, Crowne Plaza, Holiday Inn, Holiday Inn Express, voco, avid, Vignette Collection, Staybridge Suites, and Candlewood Suites. The environmental impact of IHG’s hotels is managed by IHG Green Engage. IHG Green Engage tracks the use of energy, carbon, and water and the management of waste in IHG’s properties along with the associated costs. The system helps IHG to operate responsibly and reduce energy costs. The company has also set up the IHG Foundation. It has provided funding to support the American Red Cross, The Prince’s Trust, Clean the World, and Unseen. It supports charity projects aligned to the Foundation’s key areas of focus: hospitality skills development, disaster relief, local community investment, and environmental sustainability.
Marriott International
Marriott is a hospitality service provider that operates hotels and restaurants. It operates, franchises, and licenses hotels and residential and timeshare properties under several luxury, premium, and select brand names. Its brands include the Ritz-Carlton, JW Marriott, St. Regis, Westin, Renaissance, Marriott Hotels, Le Meridien, Gaylord Hotels, Marriott Executive Apartments, Delta Hotels, Tribute Portfolio, Design Hotels, Courtyard, and SpringHill Suites. The Ritz-Carlton was the first founding partner of IMPACT 2030, which was a private sector-led initiative founded in collaboration with the United Nations and other global stakeholders, that organised corporate volunteering actions to advance the achievement of the sustainable development goals (SDGs). In 2020, associates at The Ritz-Carlton hotels volunteered more than 49,000 hours in support of the Community Footprints programme. When looking at promoting biodiversity, The Sheraton Maldives Full Moon Resort & Spa teamed up with Reefscapers and invited guests to participate in a coral-fragment plantation activity. Additionally, The Ritz-Carlton, Okinawa invited guests to participate in coral planting and education by interacting with the Onna Village Fisheries Cooperative to make seedlings in the Onna Fishing Port.
To further understand the key themes and technologies disrupting the travel & tourism industry, access GlobalData’s latest thematic research report on ESG in Travel & Tourism.
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GlobalData, the leading provider of industry intelligence, provided the underlying data, research, and analysis used to produce this article.
GlobalData’s Thematic Scorecard ranks companies within a sector based on their overall leadership in the 10 themes that matter most to their industry, generating a leading indicator of their future earnings and relative position within key strategic areas.
