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Ecolabels in tourism are plentiful and diverse. What does it cost and, above all, what does it yield? Let’s have a closer look at the case of Flanders.
Worldwide there are 48 ecolabels which apply to touristic companies according to the website ecolabelindex.com. The fact that an overview site of ecolabels exists is exemplary for the problem in the sector. There simply are too many ecolabels to understand for normal people. What are the differences between those labels?
A first distinction between ecolabels is their range. Geographically speaking, some ecolabels operate worldwide. Others operate in specific areas. Nordic Swan, for example, is an ecolabel which covers mostly touristic companies in Scandinavia. Green Key or Travelife have a worldwide presence. Sector wise speaking, some ecolabels certify a wide range of sectors. Others are specialized to touristic companies.
[What is more beneficial for companies?]
Secondly, companies issuing the label can be NGOs, governments or companies. These types of organizations have different motivations.
[What is the influence of the type of organization: motivations, examples etc.? ]
Thirdly, ecolabels differ with regard to quality. A first dimension of quality is the set of criteria which an organization has to meet. A second dimension is the control procedure. Does a physical audit take place? And how frequently are companies reassessed? Some ecolabels in the touristic sector remind of greenwashing. Consumentenbond, a Dutch consumer association investigated five different ecolabels and judged only one label (Green Key) credibly. Some labels allowed hotel owners to certify themselves. Other labels implicitly allowed child labor.
An interesting fact is that a same ecolabel can mean something else in a different country. In the Netherlands, for instance, Green Key has three levels (bronze, silver and gold) and applies to a wider range of touristic companies than the Green Key label in Flanders.
The costs for an organization to get an ecolabel are threefold. Firstly, a company has to make internal costs. The company has to implement necessary changes to its operations, infrastructure and organizational structure in order to meet the criteria of the ecolabel. Secondly, the company has to pay verification costs. Indeed, an audit takes place to verify whether the company effectively meets the criteria of the label. Thirdly, the company has to pay a yearly fee to the organization issuing the label. For the certified company, this fee allows the use of the label in its communication. For the issuing organization, this fee enables the organization to operate.
These costs differ according to the size and type of a touristic company. A hotel with 100 rooms will face higher internal costs than a simple bed and breakfast. Costs payable to the issuing organization are also higher, because of a more elaborate verification audit. Furthermore, issuing organization have different prices for different types of touristic companies. Green Key Flanders, for example, charges a lower price for youth hostels than other types of organization. This kind of price differentiation allows the label to penetrate in lower-cost market segments.
[Give an indication of height of costs for tourism ecolabels in Flanders]
What are the benefits of an ecolabel for a touristic company? To answer this question, let’s have a look at the motivations of two distinct groups of companies. A first group of entrepreneurs have an ecolabel out of conviction. A second group of companies think business.
Companies which get a label out of conviction typically are smaller companies, where the owner manages his company. These people are aware of the importance of sustainability. They want to convey this message to their customers.
Companies, which get certified because of economic reasons, typically are larger businesses. Think of an international hotel chain which needs an environmental policy in order to differentiate itself from other chains. An ecolabel simply is part of their business strategy to target the environmental customer niche. It is a matter of branding.
Customers who want to sleep in a certified hotel, generally want to pay a higher price for this. This creates higher margins and makes this target group attractive.
[Exploration of sustainable customer segment]
[Exploration of how to lever an ecolabel to get more customers and increase margins]
[Give an overview of the labels in Flanders]
In September 2013 Joris Depouillon worked at Green Key Flanders.