With more than 220 million people employed worldwide and a long-term expected growth rate of around 4%, the travel and tourism sector ranks amongst the most important and dynamic growth markets of the future. Climate protection and sustainable business are key success factors for the industry’s long-term prospects as a global mobility service provider.
This topic is discussed in a new report, Towards a Low Carbon Travel & Tourism Sector, authored by the World Economic Forum together with leading international organisations and travel and tourism industry players, with analytical support and advice from Booz & Company.
The study marks the first time that the different players from such diverse clusters as airlines, hotels, cruise liners, tour operators and rental car companies have worked together to develop a collaborative approach to reduce the environmental impact of the overall sector, demonstrating its interconnectedness.
The report identifies a range of initiatives which could generate a reduction of more than one billion tons of carbon emissions in the next 30 years. For example, “green travel” initiatives include energy-efficient aircraft and engine designs, as well as new approaches to airspace management—such as NextGen (USA) or Single European Sky/SESAR in Europe—which optimise the use of airspace and therefore help to protect the climate.
But these efforts are not sufficient. The expected global long-term growth in the sector—around 4% through to 2035—will outweigh these expected carbon emissions savings. The study reveals that even allowing for the enormous efforts made in recent years and the demanding programmes that are underway, the CO2 footprint of the travel and tourism industry will significantly increase in the next 30 years.
Less-developed states, and emerging markets in particular, are additional drivers of emission growth. They still lag behind the industrialised countries that are the engines of a shift towards “green travel”. Economies like India and China, with their large populations, have their focus set on growth rather than on sustainable and ecological tourism.
In general, environmental issues are yet to be identified as a priority for top management. Co-ordination and organisation of an essentially multi-institutional approach admittedly presents obstacles, especially when it comes to collaborating within such a heterogeneous industry.
But there is room for hope. Beyond the current initiatives to minimise greenhouse gases, several promising measures were identified by the project team. For example, encouraging modal shifts from cars to mass-transit systems; the development of sustainable low carbon fuels in the aviation sector; and the deployment of renewable energies in the accommodation cluster are initiatives that need to be accelerated in the next 10 to 15 years in order to significantly reduce the tourism sector’s impact on climate change.
Above all, the main question will be the financing. Analysis by Booz & Company indicates that multi-billion dollar investment (of more than US$100 billion) is needed to create a CO2-neutral growth path for the industry. The high demand for financial support contrasts with economies that are being shaken by global recession. Travel and tourism, as a chronic low-margin sector, has even less financial scope for investments in sustainability programmes.
Nevertheless the situation is by no means unfavourable. The current economic crisis is a particularly good time to be investing in future technology and pursuing new strategic approaches for combating global climate change. The public stimulus packages that have been set up by many governments should be used for a new deal for the tourism industry. To that end, the report underscores the need for incentives such as tax exemptions for investments in energy-efficient technologies, along with sector-specific sustainability standards.
The long-term aim of becoming a CO2-neutral sector can only be achieved through joint action involving the whole industry, including states, NGOs and the private sector.