Significance of Sustainable Business Practices with Consumption
The importance of sustainability, consumer behavior and global challenges has been felt by corporate heavily in recent times. Furthermore with global economy becoming stronger with more challenges, the Travel and Hospitality sector is facing a situation where frequent changes in their business approach have become a necessity in order to stay competitive in the market. The assignment will focus on the significance of a sustainable business practices in modern times, with relations to consumption and market trends.
Critical analysis of sustainable business practices
Sustainability is defined as a way of doing a business which does not affect the ecological balance of the society and help an organization to build an ecosystem that can improve the lives of people and their stakeholders in the future. The process of sustainability is initiated by companies through investing in green funds, reducing consumption of energy within office spaces by cutting down on electricity, water and fuel usage, avoiding polluting sensitive ecological zones and many other methods. As suggested by Lee and Jan, (2019), the four capital model is one of the most important references which companies are implementing in sustainable business practices. The model talks about four capitals which consist of human, financial, environmental and manufactured. These four capitals need to be preserved and used optimally. For instance human capital i.e. labor needs to be compensated and rewarded to reduce burnout and attrition rate (Moufahim and Lichrou, 2019).
Similarly Kiráľová (2019), mentioned that finances must be used optimally like debt management, acquisition plans and joint ventures are done with due diligence to avoid cash burning. Also manufacturing and environmental capital must be tackled through minimizing hazardous wastes, reducing pollution level, using cleaner and greener energy and this process is used by most organizations in the present business scenario. Similarly natural capitalism theory, as told by Calhoun and Douglas (2019), has also focused on redistribution of assets in a way that can help in the long-term business sustainability without affecting the environment and the society at large. Hence the growth of sustainable business practices has been helpful in the build-up of stable business methods which is an amalgamation of profitability and responsible behaviors. So realizing the long term implications of sustainability most companies have been implementing rules internally and externally to develop their business practices in an ethical way.
Personal consumption in tourism and hospitality
The tourism and hospitality sector has seen strong growth in the last few years even though geopolitical tension, trade-wars and currency fluctuations have reached an all time high. This is due to the increased spending on travel and luxury items, ease of transportation, detailed place descriptions on the internet and the interest for a new experience (Shi, Qiu and Ye, 2019). So with travelers spending in airfare, hotels, food and cosmetic products the personal consumption have increased manifold in the tourism industry. The tourists in recent times have been experimenting with a lot of choices. From solo travelling to business and educational trips to cultural tourism the traditional tourism methods have seen a rapid change. As told by Christou and Sharpley (2019), in a detailed survey it was observed that for a family of four an average tourist spends $4580, which has increased by several notches compared to five years back. So the tour operators and companies are making personalized packages for improving the satisfaction level of the consumers. This includes shorter trips, home-stays and extensive travel plans in unknown locations which help in increasing the adventure quotient of the tours.
Managing consumer behavior
The changing trends in the travel and hospitality sector actually have created several challenges for tour companies. The normal 7 days or 10 days package tours are cut short and with people interested in exploring local culture, travelling by public transportation has increased heavily. Hence the revenues of the tourism companies have taken a hit. Mainly the hired cab, luxurious hotels and popular food joints helped them to generate greater revenues which have been affected (Veijola and Strauss-Mazzullo, 2019). The new travelling concept have affected the smaller companies a creating multiple tour packages based on customer preferences was not on their preference list. Data driven marketing is being carried out by analytics firms to reassess the position and marketing of several companies. Mainly the attempt of travelers in understanding the local culture and unexplored destinations have increased the importance of historical knowledge. In view of these events social media marketing by travel companies, bloggers and readjusted packages have been implemented for improving the business outlook in future (Cheng and Edwards, 2019).
Global challenges for the tourism sector
Globally as tourism sector continues to grow the threat of terrorism and criminal activities have become a serious area of concern for most of the organizations. In addition to that the spike in airfares and food products has created inflationary situations in several countries leading to a loss of revenue. The investments in the security infrastructure have also reduced the profitability of the companies leading to mergers and shutdowns. Political conflicts have reduced the scope of tourism in large parts of Middle-East and Africa leading to curtailing of tours and improvisation in the tour packages (Stone, Migacz and Wolf, 2019). These issues have hampered the profitability of local companies, tour operators, cab owners and hoteliers leading to a cyclical slump in the annual revenues and profits.
The assignment has highlighted the importance of a sustainable business model and its long term benefits for the industry. Also tourism challenges and trends have been highlighted. The changing tourism patterns, political tension and fluctuation of rules have led to short term challenges for the sector which needs to be addressed in future.