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Financial Sustainability of Sustainable Tourism Certification Programs

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Abstract

The objective of this study is to propose strategies and mechanisms to help sustainable tourism certification programs achieve long-term financial viability. The study looked at financial models and mechanisms used by certification program from other industries (such as organic produce and forestry) and from various tourism certification programs from around the world. We examined seven non-tourism certification programs and one non-tourism accreditation program to determine which experiences were applicable to tourism. In addition, 33 tourism certification programs working in the United States, Latin America, Europe, Asia-Pacific and Africa were evaluated to examine their financial structures and strategies, as well as listen to their recommendations. Representatives of 12 funding bodies and two non-governmental organizations (NGOs) supporting sustainable tourism or green certification in the United States, Latin America, and Africa were also interviewed to determine their funding priorities and interests; find out what types of relevant projects and programs they have supported; and elicit recommendations for how to help sustainable tourism certification and accreditation bodies become more financially sustainable.
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... Despite the idealistic aims of certification, there are a number of limitations and constraints too, which include the following (Spenceley and Bien, 2013): n the number of applicants to certification programmes globally within the private sector is only growing slowly (Weaver, 2009;Font, 2009;WTO, 2002); n there is a lack of robust and regular sources of income to effectively operate and market relevant, appropriate and credible programmes. Most sustainable tourism certification programmes cannot cover the complete cost of running their programme from user fees alone (Rome et al., 2006); n sophisticated tourism operations working across geographical regions and pushing the boundaries of sustainability feel that certification programmes available are not adequately sophisticated to fully capture their work; n once initial savings have been made from resource saving programmes (e.g. energy and water), it is difficult for companies to justify retaining membership of certification j TOURISM REVIEW j programmes and recurring membership and evaluation fees (Rome et al., 2006), and it is unclear whether the costs of becoming certified are recouped (El Eief and Font, 2010;Rowe and Higham, 2007); n the market advantage envisaged from certification has not been fully realised. ...
... Most sustainable tourism certification programmes cannot cover the complete cost of running their programme from user fees alone (Rome et al., 2006); n sophisticated tourism operations working across geographical regions and pushing the boundaries of sustainability feel that certification programmes available are not adequately sophisticated to fully capture their work; n once initial savings have been made from resource saving programmes (e.g. energy and water), it is difficult for companies to justify retaining membership of certification j TOURISM REVIEW j programmes and recurring membership and evaluation fees (Rome et al., 2006), and it is unclear whether the costs of becoming certified are recouped (El Eief and Font, 2010;Rowe and Higham, 2007); n the market advantage envisaged from certification has not been fully realised. For example, a vast majority of tourists are largely unaware of tourism certification labels (or indeed of sustainable tourism) offerings (TUI Travel Plc, 2010). ...
... n More government support is needed to promote certification programmes that promote them in the hotel sector: Although three certification programmes operating have been developed by the Government (in Egypt, Botswana and the Seychelles), and owing to their subsidies do not need to be operationally profitable, as they do not face the same financial challenges as commercial programmes (Rome et al., 2006). Furthermore, commercial and NGO certification programmes face challenges persuading hotels to be assessed if they are not formally endorsed by the Government. ...
Article
Purpose The purpose of this paper is to review the current status of certification and certified hotels on the African continent, and to discuss the implications for mainstreaming sustainable tourism on the continent. Design/methodology/approach The research design focused on a literature review and an online survey. The survey was used to consult stakeholders on options for incentives, and future interventions, which was distributed to 80 stakeholders from the government, certification bodies, intergovernmental agencies and NGOs. The survey resulted in 41 complete responses from 18 countries. Findings The study identified nine African certification programs, and nine international certification programs operating in Africa. Collectively, the African and international certification programs have certified at least 715 accommodation facilities in 19 African countries, against their environmental, social and economic criteria. So only a very small proportion of all hotels in Africa have been certified (certainly less than 3.4 per cent) and that these are patchily distributed across the continent. A number of incentives have been used in Africa, including marketing and promotion; interest free loans for new technologies; preferential inclusion in tour itineraries; free or discounted application processes; and technical support. Consultees suggested that hotels were generally motivated to seek certification to: promote their achievements to environmentally conscious clients and avoid negative criticism, and save money by conserving resources. However, hotels do not understand the financial benefits of sustainable practices. Research limitations/implications Research limitations include the modest sample size. For the purposes of this research, there was a greater emphasis in targeting a modest number of key respondents who could provide expert opinions on the topic, rather than a more extensive sample size of lower quality. Practical implications Practical implications include recommendations of incentives and approaches to mainstream tourism certification in Africa. These include promoting programmes and their returns on investment more broadly, promoting market advantage for certified accommodation (i.e. preferential marketing or concession terms) and the value of integrating sustainability criteria into national and regional quality-rating standards. Originality/value This is the first study of its kind to analyse certification on the African continent, which was presented at the Climate Change Summit (COP22) in Morocco in 2016 and the BEST EN Think Tank XVII in June 2017.
... The standards landscape in the sustainable tourism realm is even more complex than that in fair labor. Although consumer demand for green tourism products remains rather modest, the number of voluntary standards setting and certification schemes in the sector has skyrocketed since the early 1990s (Hansen, 2007;Poser, 2009;Rome et al., 2006). Established by individual companies, industry associations, NGOs, and government agencies, initiatives differ greatly in geographical scope, tourism activities regulated, and stringency. ...
... Producers pay more for their (multiple) certifications than need be and traders forgo certain trading opportunities because of the additional certification costs involved. These inefficiencies are widely considered to be a major obstacle to the continuous and rapid development of the organic sector (Ong, 2005;Huber et al., 2008;Rundgren, 2008). ...
... Foremost among the challenges that certification programs face worldwide is the lack of robust and regular sources of income to operate and market their programs. Out of 33 programs examined in a study on the financial sustainability of sustainable tourism certification programs, none of the programs, not even those that have established user fees, are self-sufficient (Rome et al. 2006). Programs always rely on additional sources of funding from government or private sources. ...
... Although allowing self-assessment of businesses does not give much credibility to the program or the ecolabel, it does have its advantages in that it keeps operating costs low thereby keeping costs of certification low, it encourages admission to the program, and it promotes ownership of the process. The claim that self-assessment certification programs are beneficial because they are a good way to teach eco-efficiency practices to businesses may not be as strong anymore, however, as there are plenty of other ways available to get this same information (Rome et al. 2006). ...
Article
As one of the biggest industries in the world, tourism has huge positive and negative socioeconomic, cultural and environmental impacts. Over the past fifteen years, a plethora of tourism certification programs have sprung up worldwide in an effort to recognize tourism businesses who truly work to reduce negative impacts by using sustainable practices. This worldwide proliferation of tourism certification programs, however, has led to consumer confusion, lack of brand recognition and widely varying standards. With a global accreditation body looming on the horizon that aims to create a single recognizable sustainable tourism brand, tourism certification programs will soon have the opportunity to become accredited by complying with minimum standards that will be determined by the Sustainable Tourism Stewardship Council. Accreditation will provide certification programs with the legitimacy and credibility they need to differentiate their programs, and thus the certified tourism businesses, from others with weaker standards, and may eventually lead to a shift of the tourism industry towards more sustainable practices. Here I use the best practice standards for tourism certification programs as laid out in the Mohonk Agreement, and the recently released Global Sustainable Tourism Criteria, envisioned to serve as the common set of baseline criteria by which to accredit certification programs, to evaluate four state-level tourism certification programs as case studies in the United States. In assuming that these standards and criteria are the minimum requirements that need to be met for a certification program to become accredited, I find that none of these four programs, and presumably none of the US state-level programs as they currently stand, will meet accreditation requirements. I discuss the challenges these programs have in complying with best practice standards and in fulfilling the triple bottom line principles of environmental, socioeconomic, and cultural sustainability as specified by the Global Sustainable Tourism Criteria. I also conjecture what the future may look like for these programs and US tourism certification in general.
... One of the main challenges that business organizations are facing today is how to work green and at the same time sustain their financial performance. According to Rome et al., (2006) very few of the organizations which have sustainable tourism programs have achieved economic equilibrium to the point where their activities can be sustained if short term funding from donors is stopped. Recent empirical evidence supports the contention that GHRM practices drive financial performance of firms (e.g., Guerci et al., 2016;Daily et al., 2012;Daily & Huang, 2001). ...
... While tourism businesses may have less control over marketing messages or the type of tourists attracted than they would have in a B2C approach, they may nevertheless benefit from the reduced risks and costs of direct marketing (Font & Carey, 2005). The ECO certification scheme, chosen for analysis in this study, is said to have already tapped into this market by promoting smaller certified tourism services at trade fairs and conferences organized nationally as well as internationally (Rome, Crabtree, Bien, Hamele, & Spenceley, 2006). 1 Given this, the future of certification may be a B2B approach. ...
Article
Certification is highlighted as a key sustainable tourism management tool. Yet, very little is known about visitors’ perceptions of such schemes. This is an important gap: the success of certification schemes depends on consumers’ confidence in the quality of products and services that the schemes endorse. This paper surveyed 610 visitors to the Wet Tropics World Heritage Area and surrounds in Queensland, Australia about (1) the perceived importance of various attributes of the ECO certification scheme; and (2) the perceived performance of operators based on those attributes. Data analysis identified aspects of ECO certification and of operator performance that may need improvement. It found that importance of attributes varied across products and visitor groups; at accommodations, most attributes were perceived to be important, Nature (as an aesthetic experience) and Marketing being more important than others, while at attractions and on tours, visitorswere indifferent.Younger visitors rated Environment and Conservation more highly than their older counterparts and females rated Conservation more highly than males. Visitors – notably at accommodations – considered that ECO certified operators were performing “better” than non-ECO certified operators on many attributes. How these visitor perceptions translate into reality remains an important topic for future research.
Article
Full-text available
This study aims to identify how institutional forces, such as regulatory and stakeholder pressures, are related to proactive environmental behavior by hotel facilities participating in Certification for Sustainable Tourism, a voluntary environmental program established by the Costa Rican government. This program is among the first third-party performance-based environmental certification initiatives implemented in the developing world. Findings suggest that voluntary environmental programs that include performance-based standards and third-party monitoring may be effective in promoting beyond-compliance environmental behavior when they are complemented by isomorphic institutional pressures exerted by government environmental monitoring and trade association membership. These results are consistent with neo-institutional theory from the organizational sociology literature. Surprisingly,findings also indicate that compared to locally owned hotels, foreign-owned and multinational subsidiary facilities do not seem to be significantly correlated with higher participation and superior environmental performance in Certification for Sustainable Tourism.
Article
Full-text available
This study focuses on two basic questions: Are voluntary programs effective in promoting higher environmental performance by participant firms? If so, which distinct areas of environmental performance are more likely to be improved by firms joining a voluntary environmental program? We address these questions by assessing the environmental effectiveness of the ski industry’s Sustainable Slopes Program in the western United States between 2001 and 2005. We found no evidence in our five-year analysis to conclude that ski areas adopting the SSP displayed superior performance levels than nonparticipants for the following areas of environmental protection: overall environmental performance, expansion management, pollution management, and wildlife and habitat management. SSP participants only appear to show a statistically significant correlation with higher natural resource conservation performance rates. For policymakers, these results suggest that caution is needed before a priori assuming that strictly voluntary programs can be effective in promoting comprehensive superior environmental performance.
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Why shouldn't people who deplete our natural assets have to pay, and those who protect them reap profits? Conservation-minded entrepreneurs and others around the world are beginning to ask just that question, as the increasing scarcity of natural resources becomes a tangible threat to our own lives and our hopes for our children. The New Economy of Nature brings together Gretchen Daily, one of the world's leading ecologists, with Katherine Ellison, a Pulitzer-prize winning journalist, to offer an engaging and informative look at a new "new economy" -- a system recognizing the economic value of natural systems and the potential profits in protecting them.Through engaging stories from around the world, the authors introduce readers to a diverse group of people who are pioneering new approaches to conservation. We meet Adam Davis, an American business executive who dreams of establishing a market for buying and selling "ecosystem service units;" John Wamsley, a former math professor in Australia who has found a way to play the stock market and protect native species at the same time; and Dan Janzen, a biologist working in Costa Rica who devised a controversial plan to sell a conservation area's natural waste-disposal services to a local orange juice producer. Readers also visit the Catskill Mountains, where the City of New York purchased undeveloped land instead of building an expensive new water treatment facility; and King County, Washington, where county executive Ron Sims has dedicated himself to finding ways of "making the market move" to protect the county's remaining open space.Daily and Ellison describe the dynamic interplay of science, economics, business, and politics that is involved in establishing these new approaches and examine what will be needed to create successful models and lasting institutions for conservation. The New Economy of Nature presents a fundamentally new way of thinking about the environment and about the economy, and with its fascinating portraits of charismatic pioneers, it is as entertaining as it is informative.
Diagnóstico institucional y estructural regional para el programa de Certificación Sostenibilidad Turística (CST) en Centroamérica
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