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21 October 2013

The total impact of travel: the industry can start a new journey

In the UK, £31.5bn is spent on holiday arrangements with ABTA Members every year, on 36m holidays. But that’s only part of the picture, says Malcolm Preston, in an address to the annual British Travel Association (ABTA) convention.

At the 2013 ABTA Travel Convention, I spoke to delegates from across airlines, tour operators and the rest of the tourism industry on sustainability and what it means for their sector. Drawing on the experience of other industry sectors, my challenge to the travel industry is to think more broadly about sustainability.

Companies can operate in ways that have greater positive impact for all the communities they effect, whilst still making the profit their shareholders require. We all know that as we contemplate the future, sustainability issues have moved centre stage, and are now at the forefront of many executives’ minds when making significant business decisions for their industry.

In addition, a broader range of influencers, including employees, shareholders, regulators, suppliers and consumers can now have much greater sway on the success or otherwise of a travel business. But unlike the traditional demands, those people want to know far more than latest profit, booking levels and so on.

Many travel companies consider the environment to be the only major sustainability issue and the industry is making progress in this area, having gone to some lengths to offer off setting or other programmes to minimise environmental impacts. But what about the economic and social impacts they have on the communities and regions that travel operators deliver their customers to?

A simplistic view of the environmental impact of the travel industry focuses on air travel emissions without considering broader impacts. The reality is air travel has brought the world closer, and the interest in seeing new and exciting places in far flung locations is a natural consequence of wider economic and social development. Many airlines made significant progress – out performing many other industries – in terms of reducing emissions year on year. But when the airplane arrives, what about the impact on the destination?

I put the question to the audience - how do they use their supply chains and operations for maximum positive impact on their communities? I’d argue that if the trends in travel destinations are anything to go by, the focus needs to shift to a much more local level. Anecdotal evidence of damaged environments, dwindling water supply and disturbed communities does little to support the industry’s assertion of tourism benefitting destinations.

Sustaining good growth – not just growth at any cost - in tourism means having a net positive impact on the communities in which it operates. After all what community wants visitors who have a negative impact? The trouble for companies is that the benchmark on transparency and reporting is rising, and the industry is in danger of being left behind. The era of growth at any cost is over.

The travel industry needs to measure and manage its decisions in terms of its total footprint with a complete picture view of factors such as environmental measures, jobs, community support, and wider economic flows the travel industry brings to a region. Our experience, working on a new framework for business that allows organisations to measure and manage its social, environmental, tax and economic impacts, is the result of a three-year collaboration with clients and environmental, social and macro-economist specialists.

It’s not got all the answers, but it’s a starting point in providing businesses with a framework to help them achieve 'good growth', comparing the total impact of their strategies and investment choices and manage the trade-offs. I’ll judge my own impact, by the reaction in the room to this speech, but I hope I will have struck a chord. The industry has the opportunity to step up and take a leadership position, and deliver on its ambition to be a genuine force for good and be able to prove it.

Malcolm Preston is travel and tourism lead for PwC UK, and Global Leader of PwC’s Sustainability & Climate Change practice.