The growth of tourism and hospitality sector has an evident positive impact on local economy, but often has a negative impact on the local environment and society. Sustainability now is a prominent issue for those working and researching the tourism and hospitality industry, as major global market players, together with UN World Tourism Organization are promoting sustainability as the way to improve both economy and local environment and social life (Deale, 2010). Hotels and resort hotels are regarded as the particularly aggressive areas in terms of market competition (ibid). It might be thus argued that by reflecting the needs of major stakeholders, hotels and resorts might be able to improve their service marketing mix (Barber et al., 2011). Meanwhile, it is evident that, given higher costs and possible resistance of stakeholders, the implementation of sustainable practices as the part of the resort hotel marketing strategy might result in a decreased quality of services and price/value ratio, in addition to other negative outcomes. If the resort emphasizes own sustainability but fails to meet own targets or deceives customers and if it is exposed to the public, they would lose credibility in consumers’ minds. Hence, there are two contrasting perspectives on the issue of implementing sustainability as the part of the resort hotel marketing strategy. One perspective says that sustainability, while being a good thing, should not be emphasized as the service marketing strategy, given its negative influence on the price, possible negative influence on the quality of the services, in addition to other negative influences. Another perspective says that greater emphasis of sustainability would result in more competitive marketing strategy. Hence, the argument of this essay says that emphasizing sustainability as the part of marketing service strategy would result in improved competitive position of a resort hotel, and would not result in decreased competitive position.
It should be noted that this essay is not arguing that sustainability is a bad thing; it revolves around the argument that sustainability should be emphasized in the overall marketing strategy of a resort hotel. Hence, this essay will first define service marketing strategy, especially in the context of resort management, and then it will define sustainability, particularly in the context of tourism and hospitality industry, to be followed by the main part of the essay, arguing that emphasizing sustainability would lead to improve competitive positions of a resort. Each of the two positions would be critically analyzed to make the conclusion over the major argument.
Findings and Analysis
Marketing Strategy and Sustainability Defined
Marketing strategy is defined as the overall strategy of an organization that includes the marketing goals and well-defined marketing mix, which is based on market research, to achieve certain profitability and success (WebFinance, 2016). However, in the case of services, as opposed to products, there are some differences. One possible model to reflect the differences is an extended marketing mix, which includes not only well-known 4Ps but also People, Processes and Physical Evidence. It is evident that seven elements are crucial for services to achieve competitive advantage, especially in the case of resort hotels, given the high level of standards expected. It is thus important to analyze the main argument of the essay by critically reviewing the possible positive or negative influences of sustainable practices on each of the element. Meanwhile, sustainability is defined as the ability of the organizations to have the processes that not only benefit them but contribute to the improvement of the environment and society on the long-term basis or indefinitely (Hansmann et al., 2012). The concept of three pillars of sustainability is the cornerstone of the idea of sustainability, as economic practices, such as maintaining resorts, should not only bring economic benefits, but should not harm, and possible, improve local environment and benefit local society.
Sustainability and Resort Hotels
While focusing on the analysis of the sustainability in resorts, it is crucial to understand what is used as the term “resort”. In most of the cases, this means a hotel a central point and properties, surrounded and/or supported by other recreational facilities, such as food and drinks, sports and entertainment or shopping (Smerecnik and Andersen, 2011). Hence, for the purpose of this argument essay, the analysis is focused on the sustainability in resort hotels and not includes the analysis of town or island resorts where a number of entities are included in this term. In addition, the argument is not studied in the context of hotel resorts using eco-tourism as their major product offered, because the benefits of emphasizing sustainability in the marketing strategy are obvious in this case.
It is evident that emphasizing the sustainability as the crucial part of the marketing and overall business strategy of resort hotels have the benefits that are often non-specific for tourism and hospitality industry, the examples include increased customer loyalty, improved employee retention and enhanced risk-management policy. Indeed, the benefits of sustainability for businesses have been extensively studied since the 1990s. For example, a widely cited arguments by Porter and Van der Linde (1995) mention efficiency, innovation, decreased costs, and general improvement in competitiveness. Chan (2005) states the evidence proves ‘the Porter Hypothesis’ on the positive impact of sustainability practices on cost efficiency and differentiated brand image in the case of the hotels in Hong Kong. Brebbia and Pineda (2004) claim that cost benefits are the major reason for environmental initiatives for a major share of hotels, this is particularly true for the destinations where the energy and water, as well as the waste disposal costs, are high. Nevertheless, such a positive view is not always proved in the real world, as harsh environmental compliance regulation and sustainability practices can lead to the reduction of profitability and decrease in the total capacity. On the other hand, it can be argued that while the ‘the Porter Hypothesis’ does work to a certain degree, still, the most ambitious sustainability practices do not lead to cost benefits if compared to the expenditures required to adopt them. However, with the permanent technological advancement leading to higher efficiency and decreased costs of the initiatives (i.e. huge drop in the price of solar plant equipment), this argument might be regarded as an obsolete (Holden and Fennell, 2012). Green Hotels and Responsible Tourism Initiative (2015) suggest that modern technologies help to achieve the decrease in energy consumption by about 40% without any adverse impact on the hotel’s performance. Another important notion is suggested by Wagner et al. (2002). It is often the case that better environmental management is demonstrated by the companies with higher profits because they able to invest their excessive profits in the proactive environmental management to improve push their competitive positions even further, and not vice versa; hence excellence in sustainability does not always leads to higher profits. This is proved by the fact that all the major hotel chains do practice sustainability initiatives as compared to medium-sized hotel chains and independently run hotels (Holden and Fennell, 2012). However, such statement does not mean that improved sustainability does not lead increased profits and improved competitive advantage in the long-term. Hence, the analysis shows that sustainability can be regarded as a long-term and risk-free investment.
It is evident that different functions of the company, including marketing, HR and operations, work together to provide the best service marketing strategy to meet or exceed the customers’ expectations and perceptions, including in the area of sustainability. The problem is, in the case of not achieving the expectations set by the resort itself, the reaction would be even more negative compared to the situation when no promise about the high level of sustainability is made. This is also true for the customers’ expectations related to the sustainable practices. The study by Miles and Covin (2000) reveals that improved reputation and brand image are the proved benefits of sustainability for business. However, the reputation and brand value might be severely damaged in the case of exposure of the unsustainable practices by hotels, as opposed to their promises to public, the feel of deceived and “greenwashed” might thus result in greater problems for a company compared to a situation with a no emphasis on sustainability (Rahman et al., 2015). The similar situation is with employees. People are the crucial part of the service marketing mix when it comes to the management of hotel resorts (Bojanic, 2008). The feel that the employee works for a company with a good reputation and with a good cause result in higher commitment and loyalty, leading to an enhanced level of service and customer satisfaction (Bruns-Smith et al., 2015). However, Punjaisri and Wilson (2007) notices that in the case of failing to deliver the promises made to employees as the part of its internal branding (i.e. the hotel says that sustainability is crucial for them but employees know the number of situations when the hotel intentionally damaged environment and/or conceal the damage), the drop in commitment and loyalty may be even higher compared to the hypothetical situation with no promises. Hence, similarly to failing the brand promise to customers, internal “green washing” might severely damage overall marketing mix and hotel resort’s performance.
It can be generally suggested that amid highest competitiveness level, the long-term projecting in tourism and hospitality industry should reflect the inevitable adoption of sustainable tourism practices, and proactive implementation is necessary. The study by Briassoulis (2002) analyze the benefits of adopting sustainability by local hotel and resort hotels through the lens of the question of commons. Using this approach, often overlooked by others, it can be suggested that hotel resorts might improve or, at least, secure the competitive positioning because of the maintained competitiveness of their destination. It is often the case that environmental situation is a major concern for tourists, but not in the ethical, but in a consumerist sense, as worsened situation decrease the attractiveness of destination and thus the attractiveness of a hotel. Hence, environmental situation in the destination should be attractive for tourists. In addition, Weeden (2013) notices the environmental concern as the part of the ethical consideration is now also becoming important issue for Western consumers, meaning there are two major influences instead of one. Moreover, the demonstration of the intention and real evidence that the hotel resorts wants to preserve local environment and improve the social life of local community means higher acceptance of local community to accept and support tourism initiatives and cooperate for the benefit of both (Holden et al., 2012). This might be particularly true for small or rural areas, given the larger impact of one resort hotel on the local environment. In the case of cooperation with the local community and effective preservation of the local environment, the rise of the number of visits and repeat visits is particularly evident for environment-oriented segments but also seen by other segments (Hu and Wall, 2005). However, the situation might not be applicable when the impact of the resort, both positive and negative, is minimal, or hotel resort competitiveness is not directly related to the competitiveness of destination. Meanwhile, one of the most prominent studies about the impact of sustainability practices on the competitiveness of hotels and hotel resorts was conducted by Claver-Cortés et al. (2007). They studied the sustainability initiatives and correlation with the performance in the hotels of southeast Spain and concluded that increased performance does not result in increased activity or investment in sustainability. However, what is more important, the higher hotel’s environmental proactivity does eventually lead to higher performance level (Claver-Cortés et al., 2007).
The implementation sustainability practices might benefit both costs and service quality by ensuring the regulatory compliance and decreased the level of risks (Graci and Dodds, 2008). First, the existing regulations do often constrain the processes and daily operations of hotel business, thus having a negative impact on a crucial part of the service mix: processes; while ensuring the compliance with the help of well-defined sustainable practices do not result in major constraints according to Sloan et al., (2012). Moreover, there are evident cost benefits when a business uses the proactive sustainable management to prevent the costs related to the possible and unexpected changes in regulation. Moreover, a well-designed sustainable strategy results not only in decreased costs and risks but also in improved quality of the service, because of the increased quality of water, food and other related physical evidence. This is also proved by a massive survey of 120,000 hotel customers by Bruns-Smith et al. (2015), which show that sustainability programs do not diminish the level of satisfaction of guests, as customers do not feel a decrease in the level of service quality. When it comes to risk management, the sustainable initiative may be the best way to ensure the best risk management strategy is formulated. In the case of hotel resorts, this means improved risks management in terms of water, good and land contamination, decreased the level of air and noise pollution, decreased risks along the supply chain and decreased risks and possible costs associated with waste management. Finally, the well-studied benefit for hotels is improved reputation among customers and increased opportunities for marketing and promotional activities, even if it is not related to eco-tourism (Holden and Fennell, 2012). Positioning as a sustainable hotel resort and delivering the promise does result in the increased attention of the customers, increased loyalty and level of satisfaction improved brand value of the hotel.
In conclusion, the essay has demonstrated that emphasizing sustainability as the part of marketing service strategy of hotel resorts does lead to improved competitiveness in the number of ways. First, it improves the quality of the service itself as evidence indicate while the evidence of negative influence on the "product" itself proved to be controversial or outdated. Second, it decreases the costs, thanks to improved efficiency and improved risk management, thus leading to the possible drop in the price of the services. Of course implementing sustainable practices and emphasizing them in the marketing service strategy do require considerable investments; however, the analysis shows that sustainability can be regarded as a long-term and risk-free investment. Emphasizing sustainability is crucial nowadays because it helps to promote certain hotel among the customer with the growing environmental consciousness; however, the risks here are related to failing to deliver the promise. Emphasized sustainability may lead to increased attractiveness of the destination as the essay demonstrated. Improved efficiency of the processes is also revealed in the essay. Finally, people working in the hotel would increase their commitment thus leading to improved competitive positioning. Hence, despite certain dispute and risks, the overwhelming pieces of evidence suggest that sustainability as the part of marketing service strategy of hotel resorts improves the competitive positions, and not vice versa.
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