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GREENING OF THE HOSPITALITY INDUSTRY:
TOWARDS A CONSISTENT, MANDATORY, RATING STYLE GREEN HOTEL LABELING SYSTEM
AN ARTICLE BY VERITY ILEY
FOR THE ATTENTION OF THE EDITORIAL BOARD: HEATHER HARTWELL
Ð²Ð‚?JOURNAL OF FUTURE INDUSTRY ISSUES.Ð²Ð‚â„¢
IN PARTIAL COMPLETION OF BA (HONS) INTERNATIONAL HOSPITALITY MANAGEMENT
14TH MAY 2008
Environmental issues are of increasing concern nationally and globally. Consumers expect hotels to be environmentally friendly which is found to influence their purchasing decisions. Consumers rely on hotel labeling to clearly inform them of the companies contribution. The increasing perception that consumers are influenced by labeling has lead to an increase in faux eco-tourism or Ð²Ð‚?green washing,Ð²Ð‚â„¢ as a method to gaining competitive advantage, mainly through the use of misleading Ð²Ð‚?greenÐ²Ð‚â„¢ claims. This does not allow the consumer to make a clear and informed choice, green claims interfere with certification program labeling, and there is a lack of education on the consumers behalf of how to interpret the information. The exploitation of this has led to broken down consumer trust, of which needs to be restored in order to progress towards environmental targets. This article seeks to the issue towards recommendation for improvement.
This article will begin by briefly looking at government initiatives and consumer concerns about environmental issues within the hospitality industry specifically focusing on hotels. In will then discuss how hotels have used initiatives, to advertise to and market to consumers, progressing to probe further into green claims, Ð²Ð‚?greenÐ²Ð‚â„¢ hotel labels and certifications. It then seeks to discuss the importance and relevance of clear labeling from environmental issues, The article will explore the issue of Ð²Ð‚?green marketingÐ²Ð‚â„¢ and Ð²Ð‚?green washing;Ð²Ð‚â„¢ how it is seen to be exploiting current legislation and to some extent consumer naivety, following this it will round up the issues with hotel labeling.
The article then considers other hospitality labeling systems and initiatives, as a source of comparison to gain a broader perspective on the matter. The article concludes by discussing how a new and/ or improved Ð²Ð‚?greenÐ²Ð‚â„¢ labelling systems could address the issues previously discussed, and proposes areas for further research.
GOVERNMENT INITIATIVES AND CONSUMER CONCERNS
Environmental issues are of increasing concern for government; high on the agenda now for all political parties (Mintel 2007). Supply-side initiatives such as the International Hotel Environment Initiative (IHEI) and increasing client requirements have created greater awareness and demand for change, for transparency regarding tourism companiesÐ²Ð‚â„¢ action (Mintel 2002). A survey carried out by EDF Energy demonstrates this, showing that becoming more environmentally friendly has taken priority over traditional New YearÐ²Ð‚â„¢s resolutions such as getting a new job or quitting smoking (Anon2 2008).
There is not only national but growing global public concern for the safety and reservation of the environment (DÐ²Ð‚â„¢Souza 2004). The hospitality industry is a major consumer of resources and products including water, power, and newspapers and cleaning supplies (www.economicallysound.com), and two surveys suggest that consumers recognise this. In the first, 90% of consumers in a survey of 2,000 UK customers, carried out by Travel Lodge, stated they believe hotel and tourism companies have a responsibility (Thomas 2007). In the second, a global survey of 300 international travellers carried out by the Small Luxury Hotels of the World and the IHEI, found consumers believed empathetically that hotels have a major responsibility towards the environment, with the majority agreeing that it is important that hotels actively take steps to preserve and protect natural resources (Mintel 2002). This is important as it places an expectation on the company.
Central and local governments have introduced many initiatives to encourage Ð²Ð‚?sustainableÐ²Ð‚â„¢ living, including hotels (Mintel 2007). One of the government initiatives to encourage companies to become Ð²Ð‚?greenerÐ²Ð‚â„¢ in hotels is through after assessment and uptake of certain practices and policies, qualifying them to certify using a label a demonstration of their commitment to the environmental issues.
HOTELS USING Ð²Ð‚?GREENINGÐ²Ð‚â„¢ TO ATTRACT CONSUMERS
Green travel has become big business, worth Ð’Ðˆ409m in Britain which is set to grow 25% year on year (Hammond 2007). This comes as no surprise, due to the increasing awareness and demand. A survey carried out by Small Luxury Hotels of the World and the IHEI revealed that the majority of participants would be more likely to book a hotel with an environmental attitude (Mintel 2002). It is no wonder companies have started competing to demonstrate to consumers their commitment to the issue (Mintel 2007).
In more ways than one the hospitality industry can boost its bottom line by adopting environmental procedures and policies (www.economicallysound.com); firstly through financial savings from the policies and procedures, secondly and perhaps more importantly, through pandering to the demands of consumers. According to Matt Bake, UK director of Protocor and Gamble, it is as consumers become more and more conscious of their attitudes towards environmental issues that restaurants and hotels who display strong green credentials can gain the upper hand over competitors who cannot (Anon1 2007).
Building on this last point and perhaps most importantly there has been a rise in perception that consumer purchases are somewhat influenced by environmental labels (DÐ²Ð‚â„¢Souza 2004). It is no wonder companies are keen to get any sort of Ð²Ð‚?green labelÐ²Ð‚â„¢ that they can onto their services.
HOTEL Ð²Ð‚?GREENÐ²Ð‚â„¢ LABELS AND CERTIFICATIONS
As part of government incentives, a hotel can opt onto a certification programme which grants them permission to be able to display a certified Ð²Ð‚?greenÐ²Ð‚â„¢ label. Several of these labels are highly regarded, outlined in Table 1 below.
Table 1: Top 6 Certification Programs and Labels
Certification Program Certification Nature
U.S. EPA Energy Star for Hospitality Label Rates energy efficiency; a score out of 100 is given. Although on the official website it is recommended consumers should look for scores of 75 out of 100, this is not communicated where the label appears.
Hospitality property certification: EuropeÐ²Ð‚â„¢s Green Eco-Tourism (Cassingham 2005) A rigorous program where hotels are required to provide details on company activities and policies which relate to Ð²Ð‚?ecological practices. However the activities are not communicated to the customer, although it might be presumed this is not necessary.
Green Globe 21 Certification Like above the hotel is tested on internal activities. Green Globe has however been criticised for being confusing (Hammond 2007).
Audubon Green Leaf Rating Program A certification program which signals that the hotel makes a signification program. Again however does not communicate how.
U.S Green Building CouncilÐ²Ð‚â„¢s LEED Certification Certifies that buildings meet with standards of energy efficiency, conservation and sensitivity to the locale. Does not communicate this near or on the label.
Sustainable Tourism Certification Network of the Americas Authority give a pass mark to companies which conform to standards which classify as sustainable, making a valid contribution within the tourism industry.
Source: Adapted from (Anon2 2008)
Some of the above certifications place companies into a definite categorical level, others give a rating. The wording for all the labels is quite similar and would require close inspection to understand for the average consumer.
Table 2: Other Popular Certification Programmes and Labels
Certification Program Type of program
UKÐ²Ð‚â„¢s Green Tourism Business Scheme (GTBS): the leader in certifying green accommodation. A thorough UK based scheme. The hotel is rated on details of over 160 criteria and if they qualify, are awarded a Ð²Ð‚?bronze, silver or gold (Hammond 2007)
ISO (International standards for lodging properties) and Lodging Certification programs:
Ð²Ð‚Ñž U.S.Ð²Ð‚â„¢s Green Seal and the
Ð²Ð‚Ñž Key to Costa Rica (Boston Green Tourism 2008). These are the several voluntary regional, national and international eco-labelling programs for the hospitality industry.
These give the company a seal of approval to show the company it is at a particular standard, based on inspection of activities.
The Green Tick sustainability certification system: Six certification options exist:
Ð²Ð‚Ñž Climate Friendly
Ð²Ð‚Ñž GE- Free
Ð²Ð‚Ñž Fair Trader This scheme has been designed to provide an instantly identifiable eco-label that would signal that the product has been independently certified as sustainable.
It signals that at minimum operations occur in a way that does not lead to the permanent degradation of the environment.
The worlds first ever independent sustainability certification system and label, based on third party full life cycle assessment of products. It acts in accordance with the European CommissionÐ²Ð‚â„¢s view that sustainability labelling should be based on these factors (Harris 2007).
There are also non certification programs including the Green Restaurants Association, Green Hotels Association, and Best Green Hotels (Cassingham 2005). In the last year in Singapore Ð²Ð‚?The National Environment AgencyÐ²Ð‚â„¢ have launched a new scheme to promote energy efficiency where the hotel qualify for an Energy Smart Hotel Label, once it has met benchmarks set by various authorities (anon3 2007).
It seems there are a relatively wide variety of certifications available, without one set information leaflet which consumers can obtain, informing them about what all the labels individually mean. There does however seem to be some consistency in how these certifications are awarded, where there is set criteria which the company is rated upon, or has to meet. However some are awarded a bronze, silver or gold; helpful to allow comparisons between different companies on this particular aspect, however not so helpful when trying to compare one label against another. It seems that individually the label certifications seem sound and advisable, however collectively they become slightly confusing.
Although it would be expected that the consumer recognises the credibility of the certification, it still has to be asked, how do they, if the label doesnÐ²Ð‚â„¢t tell the consumer what it means? How easy does the consumer actually find it to:
a) Interpret the certification label?
b) Distinguish along a continuum of contribution, between hotels that have these certifications against hotels who make marketing claims?
Also due to the easiness of being able to make a marketing claim which gives the company a Ð²Ð‚?greenÐ²Ð‚â„¢ mark, does this dissuade a company to enrol onto the more concrete scheme? Are the marketing benefits for a certification evidentially stronger?
GREEN CLAIMS IN HOTELS
Ð²Ð‚?Green Claims,Ð²Ð‚â„¢ also known as an Ð²Ð‚?Environmental ClaimÐ²Ð‚â„¢ are marketing claims about the environmental benefit of a product which can appear in the form of symbols, logos, words, pictures or slogans on the package of the sales product (Green Guidance 1998). Green claims and symbols usage is optional (Consumer International 1999).
The first attempt to standardise marketing or Ð²Ð‚?greenÐ²Ð‚â„¢ claims internationally according to the Consumer International (1999) was the ISO14021, part of the ISO14000 series; the final version of the Ð²Ð‚?International Standard on the marking of environmental claims and declarations by manufacturers and distributors of goods.Ð²Ð‚â„¢ This final version aimed to harmonise the use of self declared environmental claims to encourage the use of accurate and verifiable green claims that are not misleading (Consumer International; Culley 1998).
At present any claim can be made as long as it Ð²Ð‚?truthful, accurate and able to be substantiated,Ð²Ð‚â„¢ as long as it is not Ð²Ð‚?vague or ambitious,Ð²Ð‚â„¢ or does not Ð²Ð‚?draw comparisonsÐ²Ð‚â„¢ (Consumer International 1999). It might however still be considered unsettling that there is potential for thousands of different claims to be made. How can the consumer easily draw comparisons between companies with such a wide array of information and inconsistency in communication? It could be argued that this strategy hands over to the marketing firm, free reign to be as manipulative as they can. Marketing claims are not clear and substantiated and can at this early stage of green labeling, the consumer distinguish between a claim and a certification?
According to the Advertising Standards Authority (ASA), the number of complaints relating to advertisersÐ²Ð‚â„¢ environmental claims soared from under 150 to more than 300 between 2006 and 2007 (Mintel 2008). The ASA chairman Lord Smith of Finsbury stated that claims being have been made which have been exaggerated, severely exaggerated and/or misleading (Mintel 2008). This suggests big problems with the clarity and honesty of the regulations for environmental claims.
Should companies even be allowed to make a claim purely with the purpose to advertise, surely it would be clearer, more honest and less misleading to allow only a key which shows the companies activities? As it stands, it might be suggested that the reward for being environmentally friendly is being able to Ð²Ð‚?advertiseÐ²Ð‚â„¢ it. What if it was instead just communicated and expected? Viewed more as a necessity, than a bonus to the business?
Poorly regulated environmental claims reduce consumerÐ²Ð‚â„¢s ability to exercise informed choices about the environmental impacts (Consumer International 2004; Chan et al, 2006; Phau & Ong 2007). It is important they have the choice, as they essentially have the spending power which directs the contribution made by companies. Essentially it seems clear choices are not currently the case; a further question is begged, is it a case of more tightly regulated claims, or a limit on claims, so as previously mentioned the consumer does not have to grapple with information overload. Or should there be a ban on self chosen claims, should in fact a company have to report on a number of issues?
GREEN MARKETING LEADING TO Ð²Ð‚?GREEN WASHINGÐ²Ð‚â„¢
Ð²Ð‚?Green MarketingÐ²Ð‚â„¢ describes an organisations effort at designing, promoting, pricing and distributing products that will not harm the environment (Grove et al 1996). It is considered by some to be a positive milestone in getting companies to develop society. (Edwards 2007). However CBI Director, Richard Lambert of The Advertising Standards Authority (ASA) has stated that if companies do not get their act together on a voluntary basis, and stop leaving the public confused and misinformed by a welter of conflicting data then regulations of the strictest kind will arrive (Edwards 2007).
An increasing issue, due to the demand for environmentally friendly products, is the rise in Ð²Ð‚?faux ecotourismÐ²Ð‚â„¢, or Ð²Ð‚?green-washingÐ²Ð‚â„¢ (Hammond 2007). This is where companies use terms which give an impression that the company is greener than what it is. Ð²Ð‚?Green WashingÐ²Ð‚â„¢ is partly possible as there are currently no regulations of what constitutes terms such as Ð²Ð‚?eco-friendlyÐ²Ð‚â„¢ (Lunn 2008). This would suggest a requirement for tighter regulations on using such terms. In a different context, but of the same principle, on nutritional grounds, a nutritional claim is only allowed to be made about a product, if on the back of the packet it provides full details of the nutritional content (Food Standards Agency). It would seem unreasonable for a consumer to accept the term without the evidence; surely the same principle surely stands for Ð²Ð‚?greenÐ²Ð‚â„¢ claims? This would suggest that where a claim or term such as Ð²Ð‚?eco-friendlyÐ²Ð‚â„¢ is used; the company should expect to detail the proof.
Caswell and Mojduska (1996) also suggest, one possible reason for the rise in Ð²Ð‚?green washingÐ²Ð‚â„¢ could be the apparent considerable confusion on the consumerÐ²Ð‚â„¢s part about green terminology. This would suggest a greater call for educating the consumer about the terminology being used, as well as providing the proof of where it has been incorporated.
Additionally general claims such as these are what have led to consumers not believing hotels Ð²Ð‚?greenÐ²Ð‚â„¢ statements, in turn leading to a general lack of consumer confidence (Hammond 2007). It would seem particularly important from the governments point of view to want to have clearer labeling, because if consumers are unwilling to trust and buy into Ð²Ð‚?green,Ð²Ð‚â„¢ then companies are less likely to incorporate these activities without the incentive that it is likely to attract business.
KEY ISSUES WITH CURRENT HOTEL LABELLING
To be able to make a conscious decision, consumers need to be well informed about the environmental impacts of products, services and lifestyles they choose (National Consumer Council 1996). The key way to communicate this information is via the label; however there appears to be several issues with the current hotel labelling system. There is currently no single internationally accepted green standard for tourism, but instead 350 independent eco-labels, which are more of a checklist for the industry rather than as a searchable tool for travellers (Hammond 2007). This multitude of existing ecological symbols, awarded on the basis of a wide variety of standards, are unlikely to help guests formulate a clear picture of the hotels ecological efforts (Muller 1992). This suggests that greater clarity and consistency is required.
Two more major problems facing environmental marketing include the lack of any common standards for evaluating environmental claims and negative attitudes often exhibited by green consumers towards corporations (Zinkhan and Carlson 1995). Linked to this Jane Ashton, head of corporate social responsibility at First Choice says that as travellers become more interested in green products it is increasingly important to define what being green actually means (Cambell 2007). Together this might suggest that the current labelling system is a bit like the old nutritional labelling system where consumers do not understand what the information means or how to interpret it.
Muller (1992) suggests there should be labels such as a breakfast buffet without packaging and for consistent separation of waste or for solar Ð²Ð‚â€œ energy heated water. There are so many different things that a hotel can do, would lots of individual labels be preferable or a label giving an overview of the hotel?
Not all hotels efforts to be Ð²Ð‚?greenÐ²Ð‚â„¢ are apparent (www.environmentallyfriendlyhotels.com). Scandic Hotels are an example of clear Ð²Ð‚?greenÐ²Ð‚â„¢ marketing, where they explain clearly their efforts on their website (Scandic Hotels 2008). Perhaps there should be greater legislation regarding the location of information displayed.
Additionally, due to the nature of services consumers expect to pamper with lavishing of hot water, high pressure showers, freshly laundered linen, an ample supply of towels and copious amount of food (Kirk 1995). If a consumer complains at any of the green procedures, for example re-using the same towel, hotels feel obliged to conform to consumer demands and expectations, as a result finding it hard to demonstrate a rigid commitment (Grover et al 1996). Could a new system account for flexibility? Due to the strict nature of labelling, this is deemed un-likely. Alternatively could it help educate consumers to gain prior consent and get them on board? Perhaps green labeling could be based on past activities, rather than future promises.
OTHER HOSPITALITY LABELLING
Obesity, a burning issue on the nationÐ²Ð‚â„¢s agenda has received much attention for food nutritional labelling as one method for helping sort out the problems. The development of the traffic light labeling system provides consumers with a quick, easy to understanding of the degree of fat, salt and sugar in the product, allowing easy comparison between products (Anon4 2008). There is also talk that this product retail labelling should be brought to the service industry; restaurants menuÐ²Ð‚â„¢s (Anon3 2008).
It has been suggested the carbon foot print label, a label which demonstrates a companyÐ²Ð‚â„¢s commitment to help reduce CO2 emissions, should become mandatory for all food products (Mintel 2008). Hotels also source food and drinks, the same Ð²Ð‚?farm to forkÐ²Ð‚â„¢ notion exists, and the hotel industry can potentially in this way also make a contribution towards reducing CO2 emissions. Just as traffic light labels are currently being proposed as mandatory for restaurant labelling (anon3 2008), perhaps the carbon foot print label additionally to food retail labelling, could and perhaps should become mandatory in the hotel industry. Additionally why not incorporate the CO2 emissions next to other green issues?
The environment, also a national concern, can to some extent be considered a time bomb, for example electricity resources are running out and the ozone layer is constantly being damaged, and is irreversible. This urgency suggests the environment deserves the same labelling attention, as food labeling. The traffic light labeling system will now be used as a comparator to the current green labelling system to identify potential areas for green labeling improvement, below in Table 3 below:
Table 3: Differences between Nutritional Labelling and Green Labeling
Traffic Light System Green Certification Ð²Ð‚?GreenÐ²Ð‚â„¢ Claims
Soon to become mandatory Optional Optional
Rating system: Red, Orange and Green, with a further percentage and figure providing accurate figures to allow further evaluation of the product Some individual certifications provide a rating system, however this is not consistent across all. Despite the rating system, what the different awards stand for is not always communicated No bench mark provided for what is good, bad or adequate. Any contribution, can currently be labelled as Ð²Ð‚?green,Ð²Ð‚â„¢ does not give an indication as to Ð²Ð‚?howÐ²Ð‚â„¢ green the company is
Quick to understand No information provided on what the certificates mean aside the label, making it difficult to interpret. Difficult to understand, consumers do not always understand the terminology being used.
Includes a rating on all the key factors which contribute to the problem Provides information only on certain aspects
Each certification stands for different things No rating provided
No bench mark provided for what the information means, how good a degree the contribution currently is
Displayed on the front of the packaging: This assures the consumer does not have to hunt for the information Not consistent in where it appears, for example it could be on a hotels website, in different places on marketing material, in travel agents, in hotel guides and hotel brochures: This means the consumer may have to hunt for the information, it may also mean the consumer does not consider this as soon as they should, if it were more obvious and immediate Displayed as an advertisement, most probably at the forefront of any promotional material.
This may be the most prominent feature and consumers at a quick glance may interpret that the company is greener than what it actually is.
No escaping factual evidence: consumers are informed of hard facts about the product A certification is given, which is factual and a promise. Not backed up with evidence.
Allows easy comparison between products, where every product displays the same information in the same format Does not allow easy comparison between products. The consumer may not know what the contributions are Consumers may just know it is good, but may not know whether it is better than other labels.
Table 3 highlights that there is not a current labeling system present for all services which provide consumers with an overview of their contribution. This could be the possible gap that needs filling.
Clear and informative green labeling within hotels is paramount to provide consumers with the option to make a contribution towards environmental problems. Companies have tried to boost their green image, and ways of predominately doing this include through green claims and increasingly green washing. The current labeling system has been broken down and looked at. In conclusion it seems that the current labeling system does not encourage as a positive contribution towards environmental issues as what it could. Perhaps now, it is not just a case of nay contribution is a good contribution, but has become an expectation for significant input from all companies.
In light of the concluding discussion, the follow in tables 4, 5 and 6 below make recommendations for a beginning of development of a new and improved green labeling system.
Table 4: Recommendations for an Additional Labeling System
Requirement Reasons why
Mandatory This will provide the consumer with the key information every time, informing every purchase decisions. Mandatory labeling should encourage the company to make a greater effort, as there will be no disguising poor contribution, which as previously mentioned attracts consumers
Rating system Informs the consumer of the degree of the contribution, allowing easier comparison and better judgment
Priority Information A rating would be given on the key priority information, such as energy saving, waste, water and C02 emissions. This would provide an over view of the key activities to the environment provide a focus on the main problem. This additionally educates and creates awareness of the main problems, and informs consumers for what they should look out for
Bench marking Tells you how good or bad the companies contribution is with the use of color coding. This allows assisted interpretation of the information.
Consistency Each company should have to display the same information, allowing comparisons to be easily made between companies
Same place display Consumers will be able to find the information easily and quickly
Based on the requirements outlined in table 4 above a rough proposal for a new green labeling system is suggested. It is recommended this is used as a basis for future development and stimulate fro future debate.
Proposed Visual for a New Ð²Ð‚?GreenÐ²Ð‚â„¢ Labeling System:
= High = Good
= Medium= okay
Table 5: Recommendations for Certification Labels and Green Claims
Certification Labels Terminology such as Ð²Ð‚?eco-friendly,Ð²Ð‚â„¢ should be defined by a governing body to assure misuse of such terms does not occur
Consumer should somehow be informed what they mean
Certification labels should be labeled: as Ð²Ð‚?Certification labels,Ð²Ð‚â„¢ to clearly distinguish them for claims and emphasise their value
Ð²Ð‚?GreenÐ²Ð‚â„¢ Claims If a claim is made the company should provide the supporting evidence clearly for the consumer
There should be a limited set of Ð²Ð‚?claimsÐ²Ð‚â„¢ drawn up: this will assure the consumer does not get information overload
There should be tighter restrictions on what can constitute a particular claim, perhaps claims should only be allowed to be made if they make a degree of contribution which a governing body defines as being worthy of being advertised.
It is recommended consumer opinion research is carried out to test further their understanding of green labelling and test new labelling systems. This is towards an improved system which can help reduce the environemntal problems constantly eveolving.
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