The Potential Role of Large Tour Operators for the Implementation

Table of contents Table of figures 2 List of abbreviations 2 Introduction and purpose statement 3 The potential role of large tour operators for the implementation of sustainable supply chain management in the tourism industry Conclusion 5 Bibliography 7 1 Table of figures Fig. 1: Exemplary tourism supply chain 5 List of abbreviations NGO Non-governmental organization SC supply chain SSCM sustainable supply chain management TOI Tour Operators Initiative for Sustainable Tourism Development 2 Introduction and purpose statementWith an exponentially growing population, the travel industry is expected to grow significantly in the near future. At the same time, different stakeholder groups pose a lot of pressure on this industry. Tourist are gaining awareness of the negative impacts of mass tourism on the environment as well as socio-economically speaking. As a result the demand for „green tourismâ€Å"-solutions is increasing. Furthermore, the financial market, governments as well as NGOs increasingly exert leverage on the industry to practice more sustainable tourism by means of legislation.Moreover, an intact environment is the invaluable asset for the tourism industry, preserving it means serving the self-preservation of the tourism industry. 1 Indisputably, tourism has to transform in to a more environmentally friendly and sustainable business. The implementation of environmental management systems as well as the alignment of the whole supply chain are important tools to support this transformation. In this paper I chose the tour operator stage of the supply chain as the focal point, because it acts as a link between the supply and demand side of tourism.Hereafter, I present how the structural properties of large tour operators provide them with special responsibility to promote the implementation of sustainable supply chain management (SSCM) systems in the tourism industry. The potential role of large tour operators for the implementation of sustainable supply chain management in the tourism industry Tourism, no different from other industries, is organized in supply chain (SC) structures since its products/services are composed of multiple elements as e. g. ransportation, entertainment, travel agencies and accommodation. 2 Aiming for sustainability therefore me ans to strive for a long-term improvement of the economic, social and environmental performance, not only of an isolated company or product but its whole SC. This concept is also known to literature as the â€Å"triple bottom line†-approach. 3 Suring and Muller define SSCM as â€Å"the management of material, information and capital flows as well as cooperation among companies along the supply chain while taking goals from all three dimensions of sustainable development, i. e. economic, environmental and social, into account which are derived from customer and stakeholder requirementsâ€Å". 4 Large tour operators resemble a key role in this constellation because they have the means to 1 2 Clarke (1997) Sigala (2008) 3 Kleindorfer, Singhal & Van Wassenhove (2005) 4 Seuring & Muller (2002), p. 1700 3 reverse logistics measurement mechanisms B management, transparency and stakeholder dialogue Worldwide environmental reporting of hotels, airlines, destinations, shareholdings a nd at every step of the value chain with a continuous improvement process ritically reviews thethe practicesidentifying the SCM tools and or importance of and induceis also highlighted in sustainable SCM influence literature for of the individual suppliers distributors information the implementation ? literature; Seuring and Muller [20] reported that insuf? cient or critical success factors for implementing the former. of al. [24] identi? ed three SC tools to regulate the missing SC communication a tourism flows, Cigolini etSSCM-practices as well asnamely information dissemination and volumeisof major barrier to sustainable SCM implementation. ools, coordination and control tools, and organisation tools. which indirectly influences the economic development of the travel control tools areIt is part of Coordination and destinations. utilized to monitor and inInformation tools (e. g. online connections, automated identi? cation ? uence the decision-making process, by measuring performa nces systems such as barcodes and shared databases) are utilized to their transmit to act as â€Å"gatekeepers† while linkingand setting rewards basedcustomers. Knowing the suppliers to the on the achievement of certain results. A gather, analyze, functionand share data, regarding customer data, SC performance metric system, including a set end-to-end inventory status and locations, order status, costs that it becomes obvious that tour operators may also significantly performancethe design bothof parameters that influence metrics of of the whole SC (as fully describe the the related data and performance status.Data sharing ensures that perceived by end are often bound actor of participating members will be products areuse of shared in- because supplierscustomers, and of each to this the chain), is components their able to make composed of a necessity for ensuring trustworthiness and accountability [25]. formation to help design and deliver products that ful? l customer Hence, instead of functional-cost-oriented metrics requirements more quickly and 6effectively.Visibility of position in the SC tour operators act also as nodes for that are often distribution channel. Due to their central perforachieved at the expense of another member, integrated metrics are mance metrics enables members to address production and quality communication between the different entities of required. However, research in SCM performance measurement has issues more quickly permitting more agile demand planning. The the SC, with communication being a critical factor for the successful implementation of SSCM-practices. Tourism Demand Providers of tourism infrastructure Hotels, resorts, golf courts, restaurants, museums and other tourism related suppliers such as water and power supply, road infrastructure airports etc Tour operators Travel Agents Other tourism intermediaries such as internet websites, destination organizations etc Leisure travelers Conference travelers etc Direct ion of money, documents, and information flows Fig. 1. Tourism supply chain. Fig. 1 Exemplary tourism supply chain (Sigala, 2008, p. 1591) Tour operators can draw profits from promoting SSCM-practices along their SC.Since any effort made to make the own product or service more environmental friendly is perceived well among customers (at least as long that does not drive up the price), the tour operators can turn this image-improvement into a unique selling point. For instance TUI uses a self-designed environment ranking to evaluate their products. 8 This resembles a logic response to the growing public awareness of environmental impact of mass tourism and acts as an incentive for the tour operators to evaluate the environmental performance of their suppliers (e. . trough ISO 14001, EMAS or similar certification concepts). 9 Even though the majority of the large tour operators do have some kind of sustainability policies in place, the real impact on their business is so far insuffici ent. Tour operators often try to justify this trough a lack of demand and state that the majority of customers shops for packages of the lowest price. But the nature of tourism-products has it, that the tourists themselves are co-producing the product, while it is being consumed, which makes them part 5 6Tepelus (2005), Budeanu (2009) Van Wijk & Persoon (2006) 7 Sigala (2008) 8 Clarke (1997) 9 Budeanu (2009) 4 of the supply chain. 10 In other words, implementing an SSCM in the tourism-industry also encompasses the education of the consumer. Tour operators are predestinated for this task, since their position in the SC allows them to exercise influence over the consumers choices. Still, this is asking a lot from operators, since the tour operating-business is a very competitive industry accompanied with relatively low profit margins of about 2% and customer-loyalty being not exactly widespread.This might well be part of the reason why a lot of tour operators pursue â€Å"green washi ng† without seriously engaging in long-term SSCM-changes. 11 Another one of the main issues clearly is the variety of certification schemes and the low participation of suppliers. It is doubtful that an individual label will reach a critical mass in national tourism, even though the establishment of an internationally recognized unified label could be a powerful tool: it could help to reduce consumer confusion and act as an indicator for quality for those tourists searching for green tourism services, increasing credibility.If tour operators feel compelled to search for suppliers carrying this specific label in order to meet their customers needs, also suppliers would have to comply with it in avoidance of risking their business relationship to the tour operator. This would provide the operators with a broader range of certified products to choose from. 12 In this case, it would have to be assured, that this accreditation cannot be obtained by devious means or through just an individual examination to avoid the allegation of â€Å"green washingâ€Å". Currently, most tour operators apply their own standards, tailored to their business activities. 3 This is partly due to the fact, that many certification schemes address small-scale tourism when it is really the mass tourism that needs to green the industry. Despite the fact that Europe is a forerunner in the sustainability discussion, there are hardly any regulations regarding the tour operator-business. Tour operators need to be provided with stronger incentives and effective tools to proactively enhance their own and their SC’s sustainability performance. 14 Conclusion Sustainable development in the tourism industry will take time. It requires a change of culture and governance.Tour operators are very well aware of their role and the responsibility they have in order to transform the tourism industry into a more sustainable one, acting as a hub for communication and collaboration. But since the re are no generally accepted frameworks or 10 11 Sigala (2008) Van Wijk & Persoon (2006) 12 Font (2002) 13 Budeanu (2009) 14 Van Wijk & Persoon (2006) 5 tools, many don’t see the necessity to fully comply. The most important step to take next is therefore the establishment of well-recognized standardized metrics for sustainable performance among tour operators and suppliers to set the stage for extensive SSCMimplementation.An initiative that was created to answer this purpose is the United Nations Environment Programme named â€Å"Tour Operators Initiative for Sustainable Tourism Development† (TOI), which could not be discussed here, due to he brevity of this paper. Future research should also address to tour operator-networks respectively tourism-SCs outside Europe since SSCM-practices might be used by tour operators as a tool to raise the awareness of suppliers in the destinations. 6 Bibliography Budeanu, A. (2009). 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Journal of Cleaner Production, 13(2), 99-107. Van Wijk, J. & Persoon, W. (2006) A Long-haul Destination: Sustainability Reporting Among Tour Operators. European Management Journal, 24(6), 381-395. 7