BACKGROUND PAPER

GRI/TOI Meeting

Shaping the future of sustainability reporting for the tour operator’s sector

Paris, Monday 24 September 2001


Introduction

In preparation for the debate on 24 September 2001, participants are invited to begin considering where Tour Operators are likely to have the most influence over economic, social and environment sustainability and what are the most practical actions that will mitigate impacts.

To facilitate the discussion, a typical tour operating business has been analysed with regards to its operating modalities and the actions and decisions that would most likely have an influence on sustainability.

In preparation for the 24 September meeting, please review the following sections:

1. A flow diagram “How do tour operators package holiday services?” depicting the activities involved in developing holiday packages. The objective is to present how tour operators work, confirm where tour operators can influence sustainability, and to provide context for the discussion on indicators for a tour operator sustainability report. An example of a typical summer tour operating programme has been used to indicate the time frames and the cross section of activities involved.

4  The chronological sequence of activities/decisions involved in developing tour packages are shown in the column of boxes on the left.

4  The variables and considerations involved with each activity/decision are listed in the boxes on the right.

4  The activities/decisions through which tour operators can directly influence sustainability are highlighted in green.

4  The activities/decisions through which tour operators can have an indirect influence and a shared responsibility for sustainable business are highlighted in red.

The diagram was compiled with first hand input from the TOI’s Reporting working group as well as numerous professionals working on product development, contracting and marketing in the tour operating sector.

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2. A table that summarises the actions/decisions that have a DIRECT influence on sustainability (text in green in the flow chart), and that suggests considerations that would make the actions/decisions more sustainable.

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3. A table that summarises the actions/decisions that have a INDIRECT influence on sustainability (text in red in the flow chart), and that suggests the considerations that would make the actions/decisions more sustainable.

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Furthermore, to help guide you through your analysis of the attached tables, we have prepared a list of questions and considerations. This is intended as a guide to provoke thoughts and discussion for the 24 September meeting.

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1. How do Tour Operators package Holiday services?

The processes and decisions involved in putting together

a summer programme


Comp

2. Tour Operators Activities and Decisions that have a

Direct Influence on Sustainability

Activities and Decisions / Variables and Considerations for Decision making / Suppliers and Subsidiaries Involved / Considerations that would make the Activities and Decisions more Sustainable
Co-operation with Destinations
Planning and Development
Make product plans for each type of holiday service:
4  Packages
4  Inclusive Tours
4  Fly Drives
4  Cruises
4  Seat only Sales / 4  Probable new destinations
4  Destination research
4  In-depth comparison of alternative destinations
4  Policy decisions on design of brochures and number to be printed / 4  What features sites/attractions are ecologically, archeologically and cultural sensitivity?
4  Number and reliability of locally-owned tourism services providers. What is the potential to contract with them?
4  Have protected areas been designated? What special considerations does this require when it comes to visitor numbers and activities?
4  What prevailing environment and social concerns are likely to be exacerbated through tourism?
4  Are there areas/activities where tourism numbers should be limited?
4  Should some sites/areas be reserved to specialist/niche tourism services only?
4  Is there potential to work in partnership with local government and tourism authorities to maintain destination quality?
4  Is adequate Infrastructure available for transport, solid waste and effluent treatment, recycling, and electricity and fuel supply? Can we and other TO contribute to improve local infrastructure
Destination selection:
4  Identify new destinations
4  Orientation site visits
4  Determine destinations to be continued and discontinued
4  Estimate sales for each destination
4  Estimate hotel capacity at each destination, duration of tours and departure dates / 4  Profit, return and revenues forecasts
4  Potential to increase market shares
4  Potential to grain prestige through market leadership
4  Findings of consumer studies
4  Quality and uniqueness of natural + cultural features/attractions/sites
4  Possible activities + excursions
4  Adequate Health and safety standards
4  Absence of crime + security assurance
4  Free from political and civil strife
4  Condition of infrastructure / 4  Transport
4  Accommodation
4  Supplementary Services
4  Incoming Agents (also called inbound tour operators) / 4  Does the ecological and cultural sensitivity of sites/destinations warrant imposing limits on the number of visitors?
4  To what extent is legislation on environment and social accountability enforced?
4  What environment protection and conservation plans are in place? How are these to be improved in the future?
4  How are social issues such as human rights, child labour, forced labour ensured? Can TO play a role to minimise such issues?
4  Are sites/attractions carrying out visitor management plans?
4  Is there good potential to contract with local businesses and employ local people
4  What is the level of environment and social awareness/expertise of local tourism service providers? What can TO do to improve local expertise on sustainability?
4  Can TO build meaningful partnerships with local government/tourism authorities to maintain destination quality
4  Can TO work with local NGOs and community groups to improve destination quality?
4  What infrastructure improvements are planned in regard to transport, solid waste and effluent treatment, recycling, and electricity and fuel supply?
Supply Chain Management
Contracting
Tender and confirm contracts for the design, production and printing of brochures and price lists, editions 1, 2, 3, and 4. / 4  Numbers to be printed
4  Prices
4  Run on prices
4  Design and innovation (photos, art work, maps etc)
4  Paper type and weight
4  Binding
4  Packaging
4  Previous contracts and relationship / 4  Designers
4  Printers / 4  Include information on the sustainability issues in destinations, how tourists can contribute to maintain destination quality and advise on how to have a sustainable holiday
4  Can a reduced number of brochures be printed?
4  What is the current percentage of brochures being discarded/invalid before it reaches the potential tourist?
4  Can price lists be printed separately to avoid reprinting the entire brochure?
4  Can better design reduce the number of pages in some brochures?
4  Can partly recycled paper be used for some brochures?
4  Make brochures available on the internet
4  Look into the environment policies and practices of printers such as pre-pre technologies, choice of paper, composition of inks, overprint coatings, bindings and glues etc.
4  Inquire into suppliers social policies and activities such as such as minimum wages, benefits, workplace issues child and forced labour, community development, charitable contributions, human rights
4  Invite suppliers to improve environment and social performance –agree on a incremental programme of action
4  Plan joint- efforts to improve the environment and social attributes of brochures
Raising Customer Awareness
Packaging
Compile, distribute and evaluate customer satisfaction questionnaires / Ensure distribution and collection of questionnaires / 4  Incoming Agent (also called Inbound Tour Operators)
4  Accommodation / 4  Invite comments on suppliers’ and service providers environment and social activities
4  Invite comments on how guests have engaged in local sustainability efforts
Sales and Marketing
Brochures on the market:
Storage and distribution of brochures (all editions/reprints) to corporate retail outlets and travel agents / 4  Quantity required
4  Delivery schedule
4  Correlate delivery quantity to the agents sales figures / 4  Couriers
4  Distributors
4  Travel Agents
4  Corporate retail outlets / 4  Ensure correct number of brochures are delivered
4  Look into brochure return/recycling practices
4  Inquire into the environment and social policies and practices of couriers, distributors and travel agents.
Prepare and distribute travel documents (tickets, itineraries, vouchers, travel tips) / 4  Sales Services
4  Travel Agents / 4  Include advise on how to make a holiday more sustainable
4  Include information on how tourists can help maintain destination quality and integrity
Evaluation
Handling customer and agency queries/complaints (when tourists return home) / 4  Conditions for compensation
4  Prompt handling of complaints
4  Record type and cause of complaints / Asses the number of complaints caused by or linked to:
4  Environment and social conditions in destinations
4  Poor environment and social performance of suppliers
INTERNAL MANAGEMENT
Planning and Development
Plan and conduct incentive/education trips for agents and employees / 4  New brands and destinations
4  Policies for strengthening supplier/agent relationships
4  Policies for strengthening brand loyalty and motivation / 4  Transport
4  Accommodation
4  Supplementary Services
4  Incoming Agents (also called inbound tour operators)
4  Travel Agents / 4  Inform participants about prevailing environment and social issues and response/control efforts in place
4  Include visits to sites that provide a showcase for sustainable tourism
4  Use suppliers with a good track on sustainability
Packaging
Establish the prices at which holiday services will be retailed / 4  Costs of services purchased
4  Commission to be paid
4  Fixed and variable costs
4  Proportion of overhead allocated to each service, brand and destination
4  Expected sales volume
4  Marketing objectives
4  Prices of competitors
4  Exchange rates
4  Inflation
4  Departure periods / 4  Is a ‘fair’ price being paid for services purchased, negotiated in partnership with local suppliers
4  Are overheads allocated for investing in destinations
4  Are adequate overheads allocated for internal training?
4  Does the company comply with tax regulations in destinations?
Recruitment and training of seasonal employees such as guides hostesses, chauffeurs, animators, instructors’ etc. / 4  Experience
4  Qualifications
4  Personality
4  Language ability
4  Competence and reliability
4  Previous contracts / 4  Incoming Agents(also called inbound tour operators)
4  Accommodation
4  Supplementary Services / 4  Look into the environment and social expertise of contractors and employees
4  Include sustainability issues in training programmes
4  Develop strategies to inform and engage tourist in local sustainability issues
Evaluation
Appraise the summer seasons corporate performance / 4  Profits
4  Sales and revenues per service group and destination
4  Where have sales increased?
4  Analysis of Customer Satisfaction Questionnaires
4  Market position
4  Market penetration of new services and destinations
4  Supplier issues
4  Compensation payments
4  Return on Investments / 4  Management consultants
4  Accountants
4  Auditors / 4  Appraise internal environment and social improvement efforts
4  Evaluate the health, safety, environment and social improvement efforts of suppliers and subsidiaries
4  Evaluate progress in attaining corporate sustainability goals and targets
4  Identify opportunities for continuous improvement
Internal Corporate Processes
Ongoing internal processes at:
4  Headquarters,
4  Branch and Overseas Offices
4  Subsidiaries
that sustain the development of holiday packages:
4  Administration
4  Human resources
4  Financial planning
4  Business planning
4  Investment
4  Environment management (reduce water, energy, transport and material inputs and waste outputs),
4  Corporate social obligations (such as employee benefits, workplace issues community development, charitable contributions etc.) / 4  Reduce material and energy use and reduce wastes output
4  Meet corporate social accountability obligations such as such as minimum wages, benefits, workplace issues child and forced labour, community development, charitable contribution, human rights

3. Tour Operators Activities and Decisions that have

an Indirect Influence on Sustainability

Activities and Decisions / Variables and Considerations for Decision making / Suppliers and Subsidiaries Involved / Considerations that would make Activities and Decisions more Sustainable

Supply Chain Management

Contracting
Contracting for Accommodation. Ownership rages from subsidiaries, co-funded, franchised, long leased or contracted properties.
4  Preliminary site visits
4  Health and safety inspection
4  Second round of site visits
4  Negotiation and confirmation of block bookings / 4  Price
4  Holiday service/brand characteristics
4  Facilities, level of service and location
4  Distance from key features, attractions and services
4  Health and safety standards
4  Customer satisfaction data
4  Conditions for the release of unsold capacity
4  Previous contracts and relationship
4  Length of contracting period / 4  Accommodation:
-  Self-catering
-  Apartments
-  Villas
-  Chalets.
-  Villas
-  Guest houses
-  Hotels
-  B&B
-  Campgrounds
4  Health and Safety Specialists / 4  Efforts to contract with local owned businesses
4  Expand health and safety audits to include environment management criteria such as waste, water, energy, waste water, indoor air quality, sustainable purchasing and supplier management, and training.
4  Inquire into the social policies and performance of suppliers’, which include minimum wages, benefits, workplace issues (such as retention, non-discrimination), child and forced labour, community development, charitable contributions, and human rights.
4  Invite suppliers to improve environment and social performance –agree on a incremental programme of action
4  Develop joint initiatives to inform and engage the tourist
Contracting for Transport to and from Destinations / 4  Charter rights into destination
4  Distance to destination
4  Speed
4  Comfort and convenience
4  Serving routes
4  Internal management policies
4  Characteristics of holiday service/brand
4  Price
4  Ground handling costs
4  Conditions for the release of unsold seats and the cancellation of charters
4  Penalties
4  Previous bookings and relationship
4  Setting up the tour operating flight plans with dates and frequency of operation, airports used, etc., / Airline:
Charters + schedule flights
Rail charters + scheduled journeys
Coaches
Ferry services / 4  Can rail transport be considered as an alternative to air transport for travelling to short-haul destinations?
4  Inquire into suppliers environment policies and performance including fuel consumption, fuel efficiency, fleet, emissions, hazardous waste, water waste water, noise, purchasing and supplier management,
4  Inquire into suppliers’ social policies and performance which include minimum wages, benefits, workplace issues (such as retention, non discrimination), child and forced labour, community development, charitable contributions, human rights.
4  Invite suppliers to improve environment and social performance –agree on a incremental programme of action
4  Develop joint initiatives to inform and engage tourist
Contract for transport integrated in the package/inclusive tour:
4  Transfers at destinations and points of origins
4  Transport for inclusive tours
4  Transport for Cruises packages
4  Transport for excursions
4  Vehicle hire for Fly Drives / 4  Characteristics of holiday service/brand
4  Distances involved
4  Speed
4  Comfort and convenience
4  Internal management policies
4  Price
4  Conditions for the release of unsold seats and the cancellation of charters
4  Penalties
4  Previous bookings and relationship / 4  Airlines
4  Rail Services
4  Coaches
4  Car Hire
4  Cruise Lines
4  Ferry Services
4  Liesure services
4  Incoming Agent (also called inbound tour operator) / 4  Inquire into suppliers’ environment policies and performance including fuel consumption, fuel efficiency, fleet, emissions, hazardous waste, and water wastewater, noise, purchasing and supplier management.
4  Inquire into suppliers’ social accountability efforts, which include minimum wages, benefits, workplace issues (such as retention, non-discrimination), child and forced labour, community development, charitable contributions, and human rights.
4  Invite suppliers to improve environment and social performance –agree on a incremental programme of action
4  Develop joint initiatives to inform and engage tourist
Contracting for Supplementary Services
4  Visits to natural and cultural attractions and sites
4  Liesure services (which may be based at accommodation)
4  Additional catering
4  Retail
4  Tour guides
4  Hostesses
4  Animators
4  Instructors
4  Luggage services / 4  Commission rates
4  Price
4  Experience
4  Reliability and competency
4  Education and training
4  Health and safety standards
4  Language ability
4  Customer satisfaction data
4  Previous contracts and relationship / 4  Incoming Agent (also called inbound tour operator)
4  Accommodation
4  Couriers
4  Attraction managers
4  Independents / 4  Give preference to local companies and employees
4  Look into company’s environment and social policies and activities as detailed above.
4  Invite suppliers to improve environment and social performance –agree on an incremental programme of action.
4  Develop joint initiatives to inform and engage tourists.

Packaging

Sub-contracting for reservations and call centre services / 4  Experience
4  Qualifications
4  language ability
4  previous contracts / 4  Reservations and call centre contractors / Inquire into reservations and call centre contractors’ environment and social polices and practices (as detailed above).

Internal Management

Planning and Development
Plan and conduct incentive/education trips for suppliers’ / 4  New brands and destinations
4  Policies for strengthening supplier/agent relationships
4  Policies for strengthening brand loyalty and motivation / 4  Transport
4  Accommodation
4  Supplementary Services
4  Incoming Agents (also called inbound tour operators)
4  Travel Agents / 4  Inform participants about prevailing environment and social issues and response/control efforts in place
4  Include visits to sites that provide a showcase for sustainable tourism
4  Use suppliers with a good track on sustainability

4. QUESTIONS AND CONSIDERATIONS

Overview of the business