How to develop sustainable travel products customers want

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Jesko Neuenburg, Managing Director, Global Travel & Aviation Sustainability Lead, Accenture, David Walfisch, Principal Director, Travel Sustainability, Accenture, Natalie Nehme, Manager, Travel Sustainability, Accenture, Maksim Soshkin, Research and Analysis Specialist, World Economic Forum

• Travel and tourism firms are increasingly looking to develop sustainable travel products, but they need to be made more desirable to customers.
• Many travellers want to buy sustainable travel products but don’t because of limited availability, a price premium or low credibility, among other factors.
• The How to Create the Sustainable Travel Products Customers Want report outlines what companies can do to create successful products.

Travel and tourism companies are increasingly looking to develop sustainable travel products to capitalize on growing consumer interest in environmentally and socially sustainable journeys, and address the industry’s role in meeting global climate and other environmental, social and governance (ESG)-related goals.

However, successful travel offerings will need to be made desirable to customers by bridging the ‘say-do gaps’ around limited availability, lack of awareness, low credibility, price premium, cumbersome purchasing experience and lack of rewards or acknowledgment.

These roadblocks are common reasons why customers may avoid purchasing sustainable travel offerings, thereby explaining the discrepancy between travellers’ stated intention to travel sustainably and actual booking behaviour.

Overcoming the say-do gap roadblocks and further guidance on developing sustainable travel products are some of the main themes covered in the newly-released How to Create the Sustainable Travel Products Customers Want report.

Published in collaboration with Accenture, this World Economic Forum paper is backed by research on consumer travel behaviour and product portfolios of 50-plus travel and tourism companies and involved industry stakeholder consultations and case study interviews with representatives from the aviation, hospitality and car rental and ride-sharing ecosystem.

The resulting white paper provides an overview of existing sustainable travel products and configurations, includes recommendations for creating sustainable products, and presents the industry with a necessary call to action.

The sustainable travel products landscape

Typically, sustainable travel products touch on issues such as carbon reduction, water safeguarding, waste management, worker and community inclusivity, and the protection of natural and cultural heritage.

For the purpose of the report, travel products that address carbon emissions within the aviation, hospitality and car rental and ridesharing were analyzed, with 12 mainstream sustainability features found.

As shown in in the graphic below, these can be grouped into three main decarbonization levers spanning a scale of companies’ effort and integration levels. Sustainable travel products are built according to these categories, starting with a low effort level with compensation strategies, and passing through more robust reduction and zero-emissions strategies.

Under the compensation lever, carbon-offsetting services are a common choice offered to customers by most companies covered in the analysis of the white paper. These services help prevent (avoidance offset) or capture (removal offsets) carbon emissions through mechanism like reforestation and carbon capture, usage and storage.

Reduction products directly produce less carbon emissions and vary by industry. These include the use of more efficient latest-generation aircraft in aviation and optimizing energy efficiency of facility systems like ventilation and air-conditioning in hospitality.

For zero-emissions products, different maturity levels exist, depending on the segment. In aviation electric and hydrogen propulsion aircraft are still under development, while some hotel chains’ properties are already entirely powered by renewables. For car rental and ride sharing, a zero-emission product is also commercially available today in the form of battery-electric vehicles.

Lastly, visibility features such as carbon calculators, filters and green badges can serve as enablers for all the sustainable product types. These tools can help travellers identify sustainable travel offerings and the impact of their purchase decisions, thereby nudging them to make more sustainable choices.

Products can be configured in various ways

It is also important to mention that all of the above offerings can be configured in various ways. For instance, carbon offsets are often offered as an ancillary option during the purchase of an existing travel product or services (for example, as an extra purchase option at the end of booking a flight).

On the other hand, the use of more efficient latest-generation aircraft by airlines is an example of embedded products, as the composition of an airline’s fleet is not a customer choice, but the sustainability benefits of newer planes still become part of the core product.

Particularly for embedded products, the use of visibility tools is key to enabling customer decisions and competitive differentiation. For example, carbon calculators can help customers identify flights flown on the latest-generation aircraft and green certifications achieved through practices such as using renewable energy can help such offerings to stand out in the hospitality space.

How to build sustainable products that customers want

Addressing the say-do gap roadblocks will be key to improving the above sustainable products’ adoption by customers. Several strategies can be used for this purpose, thereby building the foundation for a cycle of sustainable product development.

These recommendations include increasing product availability, improving the customer experience, reducing the green premium and providing suitable product value and impact, focusing on customer incentives and recognition, and educating consumers through greater focus on product credibility and awareness.

• Develop sustainable products: Continually develop new sustainable products and refining existing one based on customer feedback and industry trends.
• Provide a frictionless experience: Simplify the booking process by adding filters and options to compare alternatives and select sustainable products to help travellers make informed decisions.
• Improve the value proposition: Improve the perceived and actual value delivered to travellers through the sustainable product by having lower prices or highlighting the sustainability and other benefits of the offerings in ways that help justify higher prices (i.e., competing on value, not price).
• Recognize and reward customers: Reward travellers’ sustainable choices through incentives and the opportunity to showcase their sustainable behavior.
• Increase awareness: Educate travellers about sustainable travel products, alternatives, and their environmental impact.
• Improve transparency and alignment: Provideclear information on calculation methodologies, underlying criteria, and clear traceability of environmental action.

In addition, investment in technology, data and analytics and related competencies will be critical factors in successfully creating sustainable travel products.

Moreover, sustainable travel product development challenges can’t be tackled in isolation and will require cross-industry and stakeholder collaboration and alignment.

In the report, we have outlined an industry wide call to action that will help overcome the existing roadblocks.

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What’s the World Economic Forum doing to tackle air pollution?

Over 50% of countries have established national ambient air quality standards, but we must do more to protect citizens and our planet.

During COP26 the World Economic Forum and the Clean Air Fund launched the first global private sector initiative to tackle air pollution.

Founding members of the Alliance for Clean Air are committed to measuring and decreasing their air pollution emissions, creating healthier communities around the world.

Members of the Alliance for Clean Air will:

• Establish air pollution footprints on nitrogen oxides, sulphur oxides, particulate matter within 12 months
• Pinpoint where they are being emitted to track human exposure
• Set ambitious targets and objectives to reduce the air pollution emissions, with a clear action plan
• Act as champions for clean air by raising awareness among employees, customers and communities about the impact of air pollution. They will also help them to reduce their exposure and support them to take action to reduce pollution
• Use their assets innovatively to accelerate clean air solutions

Also at COP26, a practical guide for businesses on how to measure air pollution across value chains is being introduced by the Climate and Clean Air Coalition and Stockholm Environment Institute, in co-operation with IKEA. The guide will support companies to understand their impact on air quality and to take necessary actions to reduce their emissions.

If your company is committed to improving air quality contact us to express interest in working with us.

Examples include sharing success stories about sustainable travel products, aligning across the industry on sustainability metrics and reporting standards, working with supply-chain partners and aligning with local governments and communities on local sustainability initiatives and needs.

Implementing products for more sustainable travel is possible, but stakeholders across the industry need to work together to create them.