Hospitality Industry
4 min read

CSR adoption in independent hotels: The drivers and barriers

EHL Faculty
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A focus piece that resumes the challenges of independent hotels in their CSR journey. In a recent study of 14 independent hotels in France and Switzerland, we focused on two questions: What are the key drivers that push smaller independent hotels towards CSR adoption? And, conversely, what are the main barriers they need to overcome?

Hotel size matters

Corporate social responsibility initiatives are high on the agenda of many hotels these days. However, there is a notable imbalance between smaller and larger players in the market. Social and environmental challenges are clearly seen as relevant for large hotel chains. They possess substantial resources and their behaviors are carefully scrutinized. Markets and customers tend to evaluate hotel companies that act on CSR more favorably. However, independent hotels are also concerned and are making an active effort in this area. In this journey, some are tackling all the social, economic, and environmental issues while others are encountering difficulties.

 

CSR strategy - Top 5 drivers 

1. Hotel managers and their values

Intrinsic factors are important drivers of responsible conduct. Hotel managers remain the main actors driving greater CSR adherence. The practices undertaken often reflect their personal values, which are then transmitted to employees. Employees are more likely to consider social and environmental issues in everyday activities when they know the company cares about these concerns. Managers’ personal values may also be mirrored in the organization’s values, the mission statement or, more informally, the hotel’s culture.

2. The instrumental benefits of CSR

Several hotels take steps to reduce energy consumption not for the sake of the environment but to cut costs. A multitude of small actions help to achieve this goal, such as the use of LEDs, aerators on taps and magnetic key cards that turn off lights when customers leave the room. Other instrumental motives are related to employee working conditions and well-being. Hotel managers have observed that better working conditions diminish employee turnover, which is particularly high in the hospitality sector. To improve working conditions and employee well-being, hotels offer flexible schedules to adjust to preferences for day or night shifts as well as special events. Some also let employees take weekends and some vacation time. In addition, offering fairly priced or even free meals has become a norm. Some hotels have taken a step further by offering accommodation to employees, a practice that is not limited to ski resorts. It is also interesting that engaging in responsible conduct is encouraged by company networks.

3. Local business partners 

Partners (i.e., professional unions, neighboring hotel owners, suppliers) count among the most influential actors in the CSR adoption process by contributing to the spread of best practices and suggesting new products or services to integrate.

4. Local connection

Territorial connection - the sense of belonging to an area or a local community - also constitutes an important driver of the adoption of more responsible practices. The more attached a hotel manager feels to a region, the greater the likelihood the hotel will develop lasting involvement in philanthropic activities with local associations and institutions.

5. Respect of regulations and local incentives

Finally, regulations and local incentives play a lesser role in the adoption of CSR practices. Regulations contributed to the development of new standards such as accessible rooms and facilities for disabled people and energy efficiency measures like insulation requirements. If they play an important role in leveraging responsible conduct, they might not be so perceived because they appear as a set of minimum standards within the sector.

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CSR strategy - Top 5 barriers 

1. Limited resources

Lack of resources occupies the top ranking in the barriers to CSR adoption in independent hotels. Most hotels report that, as an SME, their limited financial and human resources hinder their ability to adopt further responsible practices. This is especially true for newly created or acquired hotels that need to amortize the costs of renovation and the acquisition of new furniture over a long period. For example, some hotels keep old heating systems, even though they consume much more energy than new models, because they cannot afford to change them. Many hotels prioritize paying off other investments first. Moreover, organic products are often more expensive than conventional ones. Hotel managers, especially in less expensive hotels, do not feel they can pass on the extra cost to customers.

2. Independent hotel managers are overloaded

The majority of the respondents of the study point to a lack of time for responsible practices. Contrary to large chains, managers of independent hotels are involved at many levels of operations. They carry out various tasks in addition to the management of the hotel, including hotel reception, fixing technical problems, monitoring supplies, cooking or waiting tables. Their busy schedules give them limited time to think about how to address social and environmental issues. This requires finding new solutions that are not only time saving but that will also potentially result in few negative spillovers or have significant positive long-term effects. Moreover, few managers seek information outside their network or look at inspiring practices from peers. As a consequence, socially responsible practices are often based on common sense and intuition.

3. Do hotel guests care enough?

The lack of consumer interest in hotels’ efforts can be a main barrier to adoption. Many hotels suggest that guests may be reluctant to sacrifice their comfort to preserve the environment. In part this may be because tourists pay less attention to social and environment issues during vacations than they do at home. Also, practices that are desirable from a sustainable perspective, such as the use of organic cleaning products, may reduce guests’ satisfaction. Hotels thus tend to avoid any environmental practices that cause inconvenience.

4. Are hotel customers willing to pay?

Several managers raised the question of whether customers would be willing to pay more to stay in hotels promoting socially responsible practices. Thus, it is interesting to address whether the perceived lack of customer interest may be alleviated by a greater confidence in the ability to attract a new category of guests as well as the extent that hotels are likely to reduce their margins to meet sustainability goals.

5. Hotel infrastructure can be hard to change

Finally, infrastructure remains one of the main constraints to sustainable behavior. There are several desirable options for transitioning into more sustainable buildings, but they may be difficult if not impossible to implement. For example, the existing structure may pose technical challenges. In some circumstances, experts consider it is not appropriate to install solar panels or that space limitations make it impossible to provide access to disabled customers. Another challenge is related to the potential classification of buildings as historic sites. Those buildings must not be altered but restored with specific materials, thus creating exorbitant costs to making energy-efficiency renovations.

 

Hotel sustainability: How to make it happen?

From small gestures to highly symbolic efforts, independent hotels are taking actions to embrace the shift to sustainability. They are trying to balance the potential benefits of responsible practices with major financial and resource constraints. This tradeoff between economic concerns and sustainability awareness represents a good indication of their willingness to do more for the environment and society. This dynamic is supported by an increasing demand for more sustainable services, the commitment of cities to address sustainability development goals and regulations that ensure the green transition.

The benefits of sustainable actions are often subtle and have long-term returns. Embracing them often feels like a bet on the future. Highlighting these benefits is a first step in changing hotels’ mindsets, but further solutions are required to reduce barriers to CSR adoption. The standards in the hospitality sector are changing slowly but are definitely integrating social and environmental concerns.

 

 
Written by
Dr. Ilham Bensouna
Written by
Dr. Ilham Bensouna

PhD. in Strategic Management

Dr. Catherine Thévenard-Puthod
Written by
Dr. Catherine Thévenard-Puthod

Full Professor in Strategic Management & Entrepreneurship and Université Savoie Mont Blanc - IREGE

Dr. Steffen Raub
Written by
Dr. Steffen Raub

Full Professor of Organizational Behavior at EHL

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