Consumers are becoming far more environmentally-conscious with regard to travel and how their transportation choices can impact the environment. There is also a growing awareness of corporate social responsibility among both consumers and industry players.
However, despite the greater integration of sustainability into mainstream travel and tourism, sustainability continues to come at a price, with tourism businesses still catering for just a niche group of upwardly and socially and environmentally-conscious consumers.
Dynamics in luxury travel changing worldwide
Luxury travel is being redefined by experiences rather than brands. Brands are still important but are now selling a less conspicuous message, with heritage and longevity important to consumers.
Responsible travel is almost a prerequisite in luxury tourism. Green concerns and social responsibility have spread to the affluent, with products now allowing these consumers to ease their conscience while still indulging.
These new guilt-free consumers can enjoy a luxury holiday knowing they have contributed to the environment. Kuoni has launched ananea (meaning renewal), a collection of socially and environmentally-responsible luxury holidays. Ananea includes volunteering holidays, visiting rehabilitation centres in Vietnam and meeting farmers helped by fairtrade organisations in Peru.
Europe’s green luxury tourism on the up
Following the economic crisis a new type of luxury tourism has emerged in Europe – that of more authentic and ethical tourism. Luxury European consumers can now choose providers which enable them to holiday responsibly, environmentally and respectfully. TEP, a South African non-profit organisation, through its Hidden Treasures initiative, already offers encounters with local craftsmen, musicians and communities, with Europe being its largest source market.
Prime examples of European hotels with a green focal point include electricity-producing bicycles which are connected to the Crowne Plaza Copenhagen’s main electricity supply and the self-powered gym equipment at the Hampshire Court Hotel in Basingstoke in the UK.
Rail companies are also already attracting luxury customers to many services in Europe, which can compete directly with airlines in terms of journey times. With its strong green credentials and improved services and connections, rail travel is set to become the luxury transport of choice for an increasing number of consumers.
Potential premium consumers in Asia
LOHAS (lifestyles of health and sustainability) is increasingly being recognised as a major new consumer movement. According to the World Travel Monitor Forum meeting in Pisa, those interested in LOHAS could be the tourism industry’s new premium customers. Described as well-off, well-educated, health-conscious and socially and environmentally-aware, they are also critical consumers, especially of “greenwashing” (green PR) marketing strategies.
In Germany, LOHAS already accounts for 20% of the population, while in Asia the LOHAS movement is growing very rapidly, representing a huge market opportunity, although currently its power as a consumer market remains virtually untapped. One of the latest launches in business hotels is the Super Hotel LOHAS Nara in Kansai, Japan, located by the JR train station.
Preparing for the future
Increasing pressure from governments and organisations is pushing consumers towards more sustainable products and brands. Currently, only a few tourism companies have a comprehensive approach to managing sustainability, with most therefore missing out on opportunities for strategic differentiation and thus risking their reputations.
Those not incorporating sustainable business models are likely to face a detrimental impact on their brand perception and profitability. Environmental irresponsibility will be challenged by new customers. In particular, luxury items that are not sustainable will risk being perceived as unacceptable.