Canadian tourism businesses are wondering, “Does being known as a green business really pay off? Is spending money to become more energy efficient or donating to local conservation efforts really worth it?” The answer is yes, and there is much more in understanding the ROI (return on investment) for going green than simply looking at the immediate financial payback.
In the webinar, The Value of Eco-Tourism: Calculating the ROI of Going Green, by Greenloons (a fellow member of The International Ecotourism Society) – it explains that the majority of ROI calculations only account for 60 per cent of the true ROI, focusing on operational payback. But the missing 40 per cent accounts for the following; community engagement (15 per cent), employee engagement (10 per cent) and customer investment (15 per cent).
Accounting for all these pieces will give you a true picture of how investing in your green business will provide you with an ROI and prove to your customers that they are supporting a socially and environmentally responsible business.
Financial Investment (60 per cent)
Businesses that spend money on improvements always look at the potential payback of their investment. If it’s within the next few years, generally it’s a good business decision. The ‘Sustainability Advantage’s Master Slide Set’ shows how investing in going green can drastically cut your energy, water, material costs, and address risks (such as; rising energy costs, climate change and resource scarcity). An example of a company taking a simple, yet rewarding, option for a quick payback is the San Francisco Hotel who installed LED’s and got a payback of 1.1 years. For another example of a company taking advantage of energy efficient incentives, checkout our Green Tourism Silver Member.
Community Engagement (15 per cent)
Greening your business usually goes hand in hand with positive community benefits. CREST’s recent report shows that sustainable tourism businesses are becoming known as leaders in promoting conservation by raising awareness, enhancing stewardship, revenues and community development. Engaging in practices like Shoreline Cleanups, planting trees and donating to local social and environmental causes will strengthen your bond with the local community, and this support will only enhance your bottom line.
Employee Engagement (10 per cent)
Engaging your employees will boost their job satisfaction. The Sustainability Advantage shows that engaging employees in business sustainability can improve productivity and innovation while decreasing attrition rates by 25%. Plus, as a green business, you will attract the right kind of employees. A study released in the Guardian shows that millennial want to work for companies that are very ethical and sustainable.
Customer Investment (15 per cent)
Being known as a sustainable tourism business will attract more and more customers. The 2016 Role of Sustainability in Travel & Tourism Report reveals that 60 per cent of US respondents took a trip to a sustainable destination in the past three years. These green travellers are spending an average of $600 (in US currency) more per trip, staying longer (7 days versus 4 days), and contributing to the local community by giving back. Providing an exceptional experience for these customers means you will get repeat business, more referrals, and a higher occupancy rate.
How can you take advantage of this?
Over 50 per cent of tourists are incorporating sustainability into their travel decisions – so, here are a few things you can do to attract said travellers:
- You can attract more business by having a sustainability strategy with an action plan to show your customers and potential customers what you’ve done and what you plan to do.
- Tell your green business story through your website, guest rooms or visitor information areas. This transparency shows them you are moving in the right direction, which is something they are willing to get behind and support, and even spend more money to experience!
- Having a third-party verified sustainability certification only backs this up further.
- Take advantage of any local programs with your utilities or municipalities to get incentives for energy efficiency upgrades or installing EV charging infrastructure.
Give Travellers What They Want
The market for sustainable tourism is huge (and growing), and these are the types of customers you want to attract to your green business! The majority of travellers want to support tourism businesses that are respecting and enhancing the local community, helping conserve heritage, nature and wildlife and are reducing waste and pollution (sustainabletravel.org). The Green Tourism criteria covers all this (and more), helping tourism businesses become sustainable tourism destinations.
Download the free report: What Travellers Want But Aren’t Telling You: Unlocking the Secret Desires of Your Guests.