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INSIGHT

Karim Henain

Sustainable tourism journey: Much more to be done

DUBAI, September 17, 2023

Bain & Company recently launched a report highlighting the increasing demand for sustainable tourism among leisure travellers across the globe, driving the market for sustainable tourism to develop strongly in the coming years. 
 
Leisure travellers worldwide will choose destinations and providers (airlines, hotels, restaurants, and tour companies) based on their sustainability records and are starting to pay a premium for it, said the report titled: “Sustainable Tourism: An Untapped Opportunity for Green Growth”
 
The research showed that travellers feel that the travel and tourism sector is not making enough effort to be more sustainable and there is much this sectors can do to protect the environment.
 
We spoke to Karim Henain, Partner, Bain & Company Middle East on some of the issues raised by the report. Here’s an excerpt:
 
What are some of the key findings in the report?
Following a dip in 2020, tourism is again on the rise, expected to reach $17 trillion in size by 2027, compared to $11 trillion prior to Covid-19. There is an increasing appetite for more sustainable tourism among leisure travellers across the globe, driving the market for sustainable tourism to develop strongly in the coming years. Leisure travelers worldwide will choose destinations and providers (airlines, hotels, restaurants, and tour companies) based on their sustainability records and are starting to pay a premium for it. On the other hand, research shows that travellers feel that the travel and tourism sector is making little or no effort to be more sustainable, indicating that there is still much room for the sector to respond and make a difference.
 
What makes sustainability enthusiasts such an important target group?
Sustainability enthusiasts were found in the six markets covered in the research (Germany, Italy, France, the UK, Saudi Arabia, and China), but demographics varied by market.
For example, sustainability enthusiasts from China and Saudi Arabia were predominantly highly educated (university or higher) Millennials, whereas their European counterparts were almost equally spread across age groups, income, and education levels. 
Sustainability enthusiasts are such an important group, because compared with the rest of the survey respondents, they were: 
4x more likely to consider sustainability aspects as “extremely important” when choosing a holiday destination. 
7x more likely to recommend a holiday destination driven by sustainability considerations. 
1.6x more willing to pay for more sustainable choices, at a premium of 15 to 20 percentage points compared to non-enthusiasts. 
 
While we recognise that there is a “say vs do” gap in terms of what consumers actually choose and how much more they are willing to pay for more sustainable choices, sustainability enthusiasts remain a significant segment that countries can tackle through different sustainability offerings.
 
What is the status of sustainable tourism in UAE, KSA and Egypt?
 
Driven by the opportunity presented by sustainable tourism, holiday destinations and travel and tourism providers worldwide take steps to improve their sustainability performance and traveller perception of how sustainable their practices and offerings are. Egypt has already launched several initiatives to improve the sustainability performance of its travel and tourism sector. 
 
To evaluate how travellers perceive Egypt’s sustainability efforts, we asked the survey respondents to rank Egypt’s sustainability performance vs main competing destinations in MENA (Greece, Turkey, Tunisia, UAE, Morocco). 
 
Overall, Greece ranked first as the holiday destination perceived to be most sustainable, while Egypt ranked fourth. 
 
On the other hand, the perception of Egypt significantly improved among sustainability enthusiasts, while we saw significant differences in how Egypt and other competing destinations were perceived across the different markets (China, Saudi Arabia, Europe).
 
What is the status of sustainable tourism in the UAE?
The UAE has taken multiple steps towards sustainable tourism. For example, Dubai has recently launched, in collaboration with the hospitality sector, the Dubai Sustainable Tourism stamp, which encourages hotels throughout the Emirate to take initiatives around energy and water efficiency, waste management, and staff education and engagement.
 
Our research shows that the perception of the UAE with regards to sustainable tourism remains to be still in the middle of the pack, however, with significant variation among different traveller segments. For example, sustainability enthusiasts from the ME region see UAE to be the top destination for sustainable tourism compared to other markets. Whereas individuals from the same segment from other markets (e.g., China and Europe) see the UAE lagging other regional tourism markets.
 



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