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Environmental strategies in the hospitality industry

发布时间:2017-04-23
该论文是我们的学员投稿,并非我们专家级的写作水平!如果你有论文作业写作指导需求请联系我们的客服人员 The purpose of this chapter to provide a review of topical literature to facilitate an insight into the specific subject under research.

Contents

2.0 LITERATURE REVIEW

2.1 Introduction

2.2 Entrepreneurship and innovation

2.3 Environmental sustainability

2.4 Innovative environmental strategies in the hospitality industry

2.4.1 Eco-entrepreneurship

2.5 Summary

2.0 LITERATURE REVIEW

2.1 Introduction

The purpose of this chapter to provide a review of topical literature to facilitate an insight into the specific subject under research. It will act as a fundamental focus upon objectives 1 and 2 for the primary research study. It begins with a definition of entrepreneurship, innovation and sustainability and their relation to hospitality. Next step it will be analyzed how sustainability strategies developed in the past 10 years in this industry.

2.2 Entrepreneurship and innovation

Entrepreneurs are a minority in the business world. They create something different, something unique they change values. They always search for a change they are able to respond and to take it as an opportunity. Entrepreneurship is rather a feature than an individual or an institution. It is also not a personality. It can be learned and practiced by hard work (Peter F.Drucker 1993).

Entrepreneurial function discovers and assesses the new opportunities so it creates something that did not exist before. This can be products or services (Shane and Venkataraman, 2000). Entrepreneurial opportunities exist because different perceptions and ideas of resources when they are turned from input to output. The theory on entrepreneur focuses on heterogeneity of ideas of the value of resources (Alvarez and Busenitz, 2001: 756).

There are some basic ideas that explain why entrepreneurial activity appeared. The first one focuses on the individual so the entrepreneurial action is conceptualized as human impute, such as to face under uncertainty, willingness (Kihlstrom and Laffont, 1979) and risk-taking in order to achieve goals (McClelland, 1961), this is differentiating entrepreneurs from the rest of the society. The second idea concentrates on economic and environmental factors which give motivation for entrepreneurial activity, such as market strategies and technological changes (Tushman and Anderson, 1986). The third concept is based on institution’s function, culture and social values (Eckhardt and Shane,

2003: 2).

2.3 Environmental sustainability

Brutland’s Comission defined environmental sustainability as the “ability to make the development sustainable- to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs”. In the past 10 years international community introduced a number of environmentally- aware international agreements. According to the counts of Jabbour(2012) there are more than 500 of such treaties. From these 195 is related to water saving, 180 with chemicals and wastage, 155 with biodiversity, 60 with atmosphere and the climate, 45 with land use.

UNEP examined these treaties and how they progress, from 90 important goals only 4 showed significant progress. So this showed that there is a lot more goals to achieve.

European commission statistics (Flash Eurobarometer 367) showed that the population of Europe is tending to buy environmental-friendly products. Only 15% of the respondents said that they do not buy any of these products. Furthermore 4% of them are ready to action, and only 2% of them stated that they don’t know about any environmental friendly products. Beside 89% of the respondents strongly believe that they can make a real difference for the environment by buying eco-friendly products. So there is a social awareness and interest about being eco-friendly and using such products.

Many companies changed their attitudes towards environmental strategies and products in the past few years. They started to implement proactive environmental programs (Min & Galle 2001). These actions include integrating environmental problems in business. For example recycling, reducing waste, saving energy and using reusable packaging. They also need to communicate these new value chains to the customers, suppliers and stakeholders (Handfield et al., 1997; Carter et al., 1998). The one of the most common business philosophy is the three Ps, which states from People, Profit and Planet; this refers to companies’ social responsibility (Kleindorfer, 2007). If a company plans systematically their environmental friendly strategies for a long term than it can be named as a business with environmentally proactive strategy.

There is an important question to deal with, if those strategies for the sustainable development are profitable. It is considered that they merely creates extra costs but is not a tool for extra profit. Moreover there are not only eco-friendly consumers but consumers with other interest for sustainability (Troy, 2008). More radical changes are needed in order to get real changes in corporate sustainability (Peattie, 2001). Companies must present a green image towards their customers in order to make an emotional bond with them (Banerjee et al., 2003). By implementing environmental strategies a company can make a competitive advantage. These businesses will outperform their competitors by significantly decreasing costs and differentiating products and service (Porter & Van der

Linde, 1995).

Environmental strategies are separated on different organizational level. There is functional level and corporate level. The corporate level strategies deal with the balance of the company’s business units. It also addresses which environmental issues a company should consider when establishing a new business, such as technology that they will use, research and development of the investment. Strategies on functional level deal with business functions (Wheelen & Hunger, 2006).It also discuss how these strategies can be included in long term plans within business functions such as purchasing, marketing and personnel. Purchasing environmental strategy stimulates recycling, reusing and reducing wastage (Carter & Carter, 1998). Min and Galle(2001) also define green purchasing as conscious activities which helps to reduce costs and wastage without compromising the company’s needs or the quality of products and services. When considering the production environmental strategy the company firstly should answer on three fundamental questions: product planning, disclosure policy, and pollution-prevention programs (Kleiner 1991). While Gupta (1995) states that production environmental strategies has to include product planning, capacity planning, and workforce planning, inventory and quality management. Marketing environmental strategy has to offer a competitive advantage, because consumers prefer green products rather than non- green ones. The personnel environmental strategy includes mostly training of the staff how to be aware of environmental issues, so they can be involved in environmental management (ÄŒater et al., 2008b).

Porter ( 1991) argued that a company which has more developed environmental strategies is making more profit and having less costs than others which are having less developed environmental strategies. This leads to company’s outperform and competitive advantage. Kleindrofer (2007) explained the factors which can lead to higher profitability because of sustainability strategies:

  1. the corporate image increases customer satisfaction and loyalty
  2. synergies between lean manufacturing and green manufacturing raise plant-level productivity as well as revenues and market share
  3. reverse logistics, remanufacturing and supply chain design are challenges increasingly met and turned into profitable outcomes
  4. because regulatory scrutiny is costly, many companies commit themselves to go ‘beyond compliance’
  5. the risk of being held liable, or found negligent, for accidents or environmental damage
  6. improved tools and management systems for better product and process design which all promote more sustainable products and supply chains

Results of environmental strategies can be financial or non-financial. The financial would be the profitability, lowered cots and superior position above the competitors. The non-financial can be the customers loyalty, employees satisfaction (ÄŒater et al., 2008b).

2.4 Innovative environmental strategies in the hospitality industry

Decades ago environmental friendly strategies were considered as high cost and minimal benefit cases. Nowadays as the perception changed companies realized that what is good for the world it can be good for their business. Being green is no longer an option is a must for the industry (Harvard Business Review [HBR], 2007, front cover page). The concerns about the hotels negative impact on the environment continuously grows. However this industry is not considered as the most significant polluter, like metallurgical or chemical industry, but there is a rapid growth in the hotel business so environmentally sustainable strategies are necessary in order to survive (Stipanuk, 2002).

Maintaining “green” strategies is a great business potential in highly competitive industries such as hospitality. As different industries introduce “green” strategies also hospitality has to follow them, because those companies will also request from their partners to be eco-friendly (Go & Pine, 1995).

Bohdanowicz (2005) claims the importance for hotels to reduce their waste and their impact on environment as they count one of the biggest polluters and resources consumers in the services industry. She demonstrates her thoughts by arguments, that a normal hotel release between 160 kg and 200 kg CO2 per square meter of room and the guests consumes between 170 and 360 liters of fresh water per night and produce one kilogram of extra waste. Major hotels and hotel chains has the potential to change and reduce their wastage and lower their use of resources. These hotels have the financial background to invest in new technologies and have the power to introduce new environmental policies so they can make an impact on a large scale. (Bohdanowicz, 2005).

In the past years a lot of publications appeared in order to help hoteliers how to introduce new environmental friendly strategies in their establishment. One of the publications is the Environmental Action Pack for Hotels created by the United Nation Environmental Programme (UNEP). This Action Pack helps hotel managers and owners to improve their existing environmental strategies and to introduce new ones. It encourages managers and gives guidelines and action checklist for hotel departments.

Stipanuk (2002) considers that the energy costs are one of the largest non-staff costs for hotels. The cost saving initiatives can be separated in chronological order: short-term, mid-term, long-term. Short-term savings don’t need a big capital investment and in turns back in less the one year. These include only small steps like switching off the light when they are not needed or turning off the heating when the area is not used. This can be especially useful for hotels in tourist areas with high seasonality (Webster, 2000). Mackie (1994) thinks that the staff should be well trained an aware when it comes to short-term savings, so the pay-back will be instantaneous. Mid-term saving includes more sophisticated approach and a higher investment. The pay-back time in this case will be between one and five years. This strategy may include changing light bulbs and light fittings, isolating the roof (Webster,2000). According to Baker (2005) long term savings involve more investment and a longer pay back time, which is more than 5 years, but it’s more efficient in savings if you plan for long term. There are five ways to enhance energy efficiency:

  1. the installation of a computer-controlled air conditioning system
  2. the installation of double glazing
  3. the installation of an energy efficient kitchen
  4. the purchase of fuel efficient refrigeration
  5. the purchase of fuel efficient transport

(Webster 2000) Depending on the location of the hotel air-conditioner, ventilation and heating costs can be around 50 percent of the total costs of the establishment (Baker, 2005). New air conditioning systems can consume 30 percent less energy than an old system and they can re-use the heat top reheat water for laundry or swimming pools (Greenhotelier, 2004a). The hotel’s kitchen is also a main cost point. A kitchen can consume approximately 15 percent of a hotel’s entire electricity and fossil fuel, but introducing new technology, such as the use of convection ovens and induction hobs, can help to reduce these costs (Greenhotelier, 2005a).

Water is also considered as an energy source (Stipanuk, 2002). This element is a very important resource for the hotels. They use for laundry, food preparation, bathrooms and for recreational facilities (Baker, 2005). Webster (2000) states that only five percent of the water is used for drinking or eating, the rest will be used for cleaning. The regulations regarding the water use are getting tighter every year, so hoteliers must consider reducing their water consumption and reusing their water (Stipanuk, 2002). A big amount of water is used by the housekeeping during the cleaning procedure so for water saving strategy the first and most important step is to train the staff members (Webster,2000). There are some simple technologies which can be implemented in order to decrease water consumption:

  1. water flow controllers
  2. faucet aerators
  3. push button activated showers in public areas

Also staff members have to be involved and motivated so they can help this management strategy (Baker, 2005). Also in the kitchen area there also small steps which can be followed and they do not need capital investment, like washing in bowls instead of using running water. Many hotels started to use different linen and towel programs this also involve the guests but it significantly decrease the water use ( Greenhotelier, 2005b).

Costs can be reduced by reduction of waste. Conventional disposal activities have to be replaced with recycling, reusing, disassembling, and composting. Waste management can be a major cost cutting action and also a significant impact on the environmental-awareness. There are four categories of waste creation:

  1. as a result of site clearance
  2. throughout the operational life of a hotel
  3. during refurbishment and
  4. at the end of the building’s life or if there is a change in use

The majority of the wastage will be created during the operation of the hotel, but waste management strategies have to be implemented in the very beginning. The best known strategy is the three ‘R” strategy which includes reusing, recycling and recovering (Baker, 2005). “Green” hotels must consider cooperating with environmentally aware suppliers, which use proper environmental policy (Webster, 2000).

2.4.1 Hotels with the best practices

Fairmont luxury hotel chain is a leader in the environmental protection in the industry. In 2013 they created four pillars which focus on brand’s renewed commitment to achieve positive long-term change on a global scale. These four pillars are:

  1. Responsible Business: The first step to accomplish this pillar the company introduced Data Management System that allows for real-time monitoring, measurement and reporting on sustainability at the property level. Each ‘Fairmont’ hotel has a separate team, named “Sustainability Team” which take care of innovations and achieve positive changes in every hotel individually.
  2. Ecosystem: Means the design and the construction of the hotels. ‘Fairmont’ hotels investing in sustainable practices during hotel renovations and constructions.
  3. Environment: It focuses on reduction of waste, energy and water consumption. They also cooperate with World Wildlife Fund (WWF) for greenhouse gas reduction and to advertise the use of electronic vehicles.
  4. Engagement: Involves communities, guests, partners and colleagues. The brand introduced a seed funding to hotel identified organizations and causes to improve the local community’s well-being.

Data Management System has three main applications: The Portal Application, Metrics Application, and Grants Application. The Portal application facilitates sharing the best ideas and practices between different hotels in the company. The DMS allows all users in the system – from any property – to share any actions which their hotel has undertaken. This application has to be in practice at least for three month and it has to be proven and to show benefits with metrics – to demonstrate success. After on property introduced a new initiative the system will show in a few weeks how the other properties adapted.

This system encourages employees to come up with new ideas and to be involved in the business (Greenhotelier-Siobhan O'Neill, 8th of Dceember 2013).

ITC Hotels in India have been practicing sustainability since 1988. Green Hotelier caught up with Niranjan Khatri, General Manager WelcomEnviron Initiatives, ITC Hotels to discover more about their long history of green initiatives. The managed to reduce their energy consumption by 20%, water consumption by 60% and 5 of them are using wind energy. ITC Hotels are the first chain to be certified platinum rated by US Green Building Council, a non-profit organization dedicated to sustainable building design and construction. The most innovative practices in the ITC hotels are:

  1. The chain has 11 LEED platinum rated properties in India
  2. Five of the hotels operate on wind energy; the largest self-owned wind farms (29.5 MW) by any hotel chain in the world, for captive consumption – ITC Gardenia & ITC Windsor, Bengaluru, ITC Rajputana, Jaipur, ITC Maratha, Mumbai and the all new integrated Luxury Hotel Complex in Chennai – ITC Grand Chola
  3. Multi glazed energy efficient windows minimizing solar heat gain and thus reducing air conditioning load
  4. Use of LED light fixtures in the guest rooms and public areas – for energy efficiency
  5. Water efficiency in air conditioning systems – 100% reduction in water consumption for AC usage
  6. As much as 60% of room stationery and consumables used are either sourced locally, certified or with recycled content
  7. Low VOC (Volatile Organic Compounds) paints and certified wood are used in guest rooms and public areas

(Greenhotelier-Siobhan O'Neill, December 4,2013)

2.5 Summary

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