The sustainability opportunity: How travel and hospitality brands can tap into the biggest potential of unmet consumer demand
In October, PACE Dimensions, BVA BDRC and the BVA Nudge Unit collaborated to deliver a timely and insightful discussion on the growing phenomenon of environmentally conscious consumer behaviours. Despite the size and rate of this growth in demand for sustainable choices, the vast majority of businesses are yet to respond adequately. Read to find out what businesses can and should do to take advantage.
Green growth provides opportunity for travel and hospitality industry according to new research
10 November 2021: Nine in ten travellers would choose a sustainable hotel if the option existed according to new research from PACE Dimensions and BVA BDRC highlighting the powerful opportunity for the travel and hospitality industry.
With over three quarters (76 per cent) of the UK public stating that they are ‘very concerned’ about sustainable issues, in particular those related to the environment, the scale of the market opportunity is huge. It is also intensified by the pandemic with 58 per cent of travellers highlighting they are thinking about sustainability now more than pre Covid-19.
Given a choice between similar hotels with one delivering better sustainability credentials, an overwhelming majority chose the sustainable hotel. This remained the case when the price was increased five per cent.
Tim Davis, managing director, PACE Dimensions, said:
“There is a rapid shift to values-driven purchasing that is impacting the choices people make when they travel. The major challenge for the travel and hospitality industry is that this market is largely unexploited and there is not yet the sustainable product choice to match consumer demand. The risks for those not addressing sustainability are stark; it is becoming an expectation, like a good nights sleep. The brand loyalty and revenue opportunities for businesses taking this seriously are clear, especially as global travel is suppressed due to the Covid-19 pandemic.”
Consumer demand and reputation are major factors for travel and hospitality businesses to consider. Research highlighted that 86 per cent of those born after 1980 have a greater affinity towards companies with strong Environment, Social and Governance (ESG) values. Over half of millennials (53 per cent) would avoid a brand if it were associated with poor environmental or social standards.
Legislative change is also forcing shifts across all areas of industry, and driving new patterns for investors all looking to meet greener targets. However, consumers state that there are not enough choices to allow the extent of sustainable travel behaviour they desire, just yet.
Eduoard Lecerf, deputy CEO, BVA BDRC adds:
“We are in a moment where people understand there is a role to be played, it’s happening now and it’s here. People want corporations to ‘help me help’.”
Nudging consumers towards more sustainable choices is a key opportunity for the travel and hospitality industry. For example, guests can be incentivised with lower prices to reduce their use of laundry and housekeeping services or air conditioning, and be rewarded with loyalty points that recognise making more sustainable choices. In turn, these aid travel and hospitality brands to meet their own targets, and give consumers choice in being part of the mission.
“The travel and hospitality brands who prioritise sustainability goals and build a values-based culture will emerge as leaders. In an ever more competitive market, pressure from consumers, policy makers and investors is driving a long term fundamental shift towards greater sustainability that is business-critical to address. The technology to measure and report sustainability targets, to improve energy efficiency, and to allow consumers to search, select and book greener options all exists and yet is far too underused.”
PACE Dimensions’ advisory and consulting services supports travel and hospitality businesses to monitor market trends and transform their strategies and operations to succeed in dynamic times. Working alongside trusted leaders such as BVA BDRC, PACE Dimensions analyses the shifting patterns of demand that matter and provides insights to brands to enhance their performance.
For more information please visit www.pacedimensions.com
About the research:
Conducted by PACE Dimensions and BVA BDRC in autumn 2021