Sustainability | Impact

CSR Practices In The Hospitality Industry

Oct 23, 2022 | Imnasangla Jamir

Corporate Social Responsibility has become an invaluable aspect of organisations in the 21st century. It comes with a plethora of benefits like retaining employees as it promotes a productive and positive work environment and attracting investors as it reflects a sign of ethical corporate culture reducing the investment risk of those involved. With the rise of social consciousness among customers who have become more aware of not only their rights but are also mindful of society and the environment at large, it has become a prerequisite for successful companies. Accenture Strategy’s latest global survey shows that “57% of consumers say their purchasing consideration is driven by a company’s ethical values”.

The 2015 Cone Communications/ Ebiquity Global CSR Study indicates that 91% of consumers act responsibly and address issues related to society and the environment while 84% seek out responsible products whenever possible. This shift in consumer attitudes points toward the fact that there is a direct relationship between a company’s CSR activities and an increase in revenue. A study conducted by the Canadian Science Fair Journal in 2020 on the correlation between CSR and revenue where data regarding the annual revenue of two companies, Nike and Apple, was analysed for 6 years before and after the implementation of CSR programs. This study showcased a seven-times increase in revenue for Apple and a two-times increase in the revenue for Nike after the implementation of CSR programs. Apple and Nike’s revenues increased more rapidly after CSR implementation than they did before, eliminating the null hypothesis that factors other than its CSR activities contributed to this growth. Using these observations, we can theorize that revenues increase after the implementation of CSR programs because the action of spending more money on the public, combined with the media publicity such activities receive, attracts more customers helping a company at least maintain its revenue growth.

Applying this information to the hospitality sector in the US which is a multifaceted, ever-expanding one having a whooping net worth of $171 billion making it the largest contributor to the global tourism and hospitality industry, we can come up with a checklist with some rudimentary pointers that companies in this sector can go through to make sure their CSR campaigns are not only actually effective but also create real impact in the environment and community that they exist within.

  1. Triple-bottom-line approach

 CSR policies should contribute to the achievement of the triple-bottom-line approach of amplifying not just profits, which is the bottom line but also people and the planet. This is a very basic foundation on which companies can base their CSR framework. The ‘people’ component focuses on the societal component and creates an impact for not just its shareholders but also its stakeholders which include customers, employees and community members. The ‘planet’ component focuses on the positive environmental impact that a company can bring.  The hospitality industry undeniably being a huge contributor to carbon footprint with how much it consumes in terms of food, water and energy can do its part in reducing the same but adopting sustainable practices.

  1. Expertise Capitalization

Aligning a company’s CSR initiatives with its primary business activity and core competency is a productive way of bringing substantial change and creating opportunities to impress stakeholders and potential customers and investors. Connecting CSR activities to a company’s values helps not only build a great brand image but also portrays a commitment to one’s stakeholders. WarnerMedia’s Access Writers Program is a CSR initiative that focuses on this point  WarnerMedia is a media corporation whose main objective is to provide diverse entertainment and this program was initiated to improve the access marginalized community members have to professional opportunities in television. 

  1. Transparency

Once a CSR strategy is implemented the next important step is to maintain clarity and specificity while communicating the strategy to the stakeholders. Using precise language, specific goals and strategies backed by facts and figures, providing in-depth information about the strategies and having a robust mechanism for checking whether the strategy has been effectively implemented is a must for gaining the trust of external parties. Publicising one’s CSR strategy through social media, newspapers, newsletters, and the company website is a great way of not only maintaining this transparency but also garnering public interest.

  1. Community-Focused Endeavours

CSR activities if implemented should not be just for the sake of it but for bringing real social change through encouraging upliftment in local communities or those directly impacted by the company especially those employed by the company. Purchasing from or partnering with businesses owned by local artisans or minority groups and using it within the hotel or restaurant sends a great message to the guests inducing them to also do the same. Contributing to relevant and impactful social initiatives and making the company stand on certain issues is a great way of attracting and retaining a younger, more socially conscious customer base. 

Using the above-mentioned points the following are some CSR campaigns that the hospitality industry can adopt to achieve an increase in revenue and goodwill among its stakeholders.

  1. Partnership with Sustainability Experts

Collaborating with eco-friendly brands/organisations that have impressive track records of consistently giving back to the planet is a great way of making sure even the guests are taking part in the CSR activities that companies strategize upon. An example of such an initiative is Hilton Hotels and Resorts partnering with Clean the World with help of whom a substantial number of Hilton’s 140 million annual guests, took part in their sustainable mission to repurpose soap and hygiene amenities recycled after each stay, creating an impact of over 31 million bars of soap being recycled and distributed.

  1. Relief to Disaster-Stricken Communities

When the world is struck by natural disasters it is necessary that all organisations contribute toward alleviating the problems of those affected through immediate and long-term aid. Such campaigns can be made more effective by focusing on issues that are directly affecting the geographical location where the hotel/ restaurant/ resort is located or the communities from which their employees are. Azerai La Residence, Hue stepped in to provide direct relief to local cyclo drivers in Vietnam who have been impacted by the steep drop in tourist arrivals to the city during the pandemic. Working towards this goal, the resort donated 2,500 facemasks, beverages and relief food packs for individuals suffering from the pandemic. Azerai Can Tho worked closely with local hospitals and clinics, providing them with 4,000 N95 masks, 2,500 bars of organic soap, and 128 litres of hand sanitiser.

  1. Promoting Local Artisans

Promoting local artisans that are directly impacted by the organisation and where it is located can help deliver cultural, economic, social and environmental impact that can help define a guest’s experience in a positive manner. Seamlessly incorporating the designs of such artisans into the organisation’s ecosystem is a great opportunity to make the interior design more thought-provoking while portraying the local culture, thus enhancing a tourist’s stay. Delta Airlines has been championing the promotion of local artisans from the Mexican states of Oaxaca and Michoacán, who have passed down a style of weaving using the chicotillo loom which creates textile designs reminiscent of their homeland’s bright colour. By partnering with Someone Somewhere, a Certified B Corporation apparel brand that combines traditional handcrafts with innovative products which preserves artisan traditions to make premium and sustainable amenity kits for guests. 

  1. Sustainably Sourced Food

Locally and sustainably sourcing food ingredients include using agricultural produce or meat that is farmed taking into consideration the environmental and social impact of their farming activities. Using local produce not only helps promote the culture of the place but also reduces carbon footprint and promotes a safer food supply. Hilton Singapore achieved the Marine Stewardship Council (MSC) and Aquaculture Stewardship Council (ASC) Chain of Custody certifications in 2015 due to their contribution towards raising awareness on sustainable seafood in the region. The hotel promotes sustainable seafood on its menu and also maintains a vertical garden to harvest vegetables and herbs and promote local sourcing. This eco-friendly garden recycles and reuses water in a closed-loop water irrigation system, yielding ten times more than traditional farming of the same capacity. 

  1. Coral Reef Protection

Coral Reefs are facing a major threat due to the compounded impacts of ocean acidification, warmer sea temperatures and local stressors like pollution and overfishing. However one of the main reasons for the degradation and destruction of coral reefs is unsustainable tourism and poor coastal management. More than 75% of the coral reefs in the Atlantic, over 65% of the coral reefs in the Indian Ocean and the Middle East and nearly 50% of coral reefs in the Pacific are threatened, implying that this is an issue that affects countries all over the world. The hospitality industry, being one of the major proponents of such damage can help mitigate this situation by implementing coral protection programs by working with organisations and experts that work towards the same. Conrad Maldives Rangali Island’s coral conservation program with their resident marine biologist has set up reef regeneration and protection projects. Coral fragments that break off and are highly unlikely to survive on their own and attached to substrates so that they can grow into a clone of their mother colony. Coral frames are artificial reef structures that create a new environment for reef creatures to inhabit. Activities for the guests like glass bottom boat trips, whale shark tours and weekly marine presentations are carried out to maintain an interest in marine conservation. 

  1. Mitigating the Refugee Crisis

The escalation of the crisis in Ukraine has rendered over 7 million Ukrainians as refugees who have registered for Temporary Protection or similar national protection schemes in Europe. Being desperately in need of humanitarian assistance, these refugees need all the protection and support in not only finding a new home but also integrating with the way of life there. The hospitality industry can step into such situations and provide relief and support to the refugees by providing food and lodging, skill enhancement and training programs and job opportunities within the company. The Magdas Hotel in Vienna is a hotel that deals with the refugee crisis by assisting labour market integration for refugees by providing them with training and employment in the hospitality sector. Since refugees in Austria face difficulties in finding jobs due to the lack of necessary certifications and the unwillingness of employers to hire refugees, the hotel is run entirely by refugees and tourism professionals for which they have won multiple awards. 

  1. Alleviating the Hunger Crisis

Organisations working to end world hunger can be facilitated by hotels by making use of the hotel and restaurant kitchens to cook food for the underprivileged and encouraging guests to donate towards such causes. With more than 42 million Americans living with limited or uncertain availability of nutritionally adequate and safe food, the hospitality industry in the US can contribute towards this pressing issue by donating to food banks that operate in communities where these hotels, resorts and restaurants might be present. The Say Goodnight to Hunger campaign started by Omni Hotels and Resorts has donated over 20 million meals to provide nutritious meals for food banks to feed children, families and senior citizens across the United States. With almost a third of its properties involved in supporting local food banks, which includes volunteering efforts, food drives to collect donations, and fundraising projects that support hunger programs, they attract guests by promising to a family of four a week if they book directly.

Corporate social responsibility has a great impact on the relationship and loyalty that customers feel towards a particular company. With the rising competition in the hospitality sector faces, maintaining existing customers and attracting new ones is a crucial way of having a competitive edge over others. 

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