spa executive: “doing good is the new revenue driver for spas and hotels”
Research abounds demonstrating that large segments of global consumers prefer to buy from companies offering sustainable products, and would be willing to pay a premium for them.
A 2019 Accenture survey of 6,000 consumers in 11 countries across North America, Europe and Asia, found that:
- 83% believe it’s important or extremely important for companies to design products to be reused or recycled.
- More than 50% would pay more for sustainable products designed to be reused or recycled.
- 72% said they were currently buying more environmentally friendly products than they were five years earlier.
- 81% expected to buy more eco-friendly products over the next five years.
The pandemic has set the sustainability movement backwards to some degree. In the hospitality sector it forced hotels and spas to push health and sanitation to the forefront meaning suddenly there was a lot of plastic and many disposable items to contend with.
Looking back, Amanda Frasier, Forbes Travel Guide’s Executive Vice President of Standards & Ratings, told Spa Executive, “Just before the pandemic hit, a big focus for us was launching sustainability standards. We paused releasing them because it wasn’t the right time to start evaluating people’s performance against reduction of single use plastics when everything had to be individually wrapped and there were millions of masks and miniature bottles of hand sanitizer in circulation.”
But FTG is now launching those standards and sustainability is again top of mind.
Sustainable travel matters to consumers
According to an article by FTG’s Jennifer Kester, a 2021 poll from Virtuoso, a global network of agencies that specialize in luxury travel, half of travelers surveyed said it’s important to choose a hotel, cruise line or travel company with a strong sustainability policy, 70% said traveling sustainably enhances their vacation experience, and 82% said the pandemic made them want to travel more sustainably in the future.
That being said, most consumers won’t choose sustainability at any cost. The Accenture study found that price and quality were still top considerations, cited by 89% and 84% of respondents, respectively.
As the price of eco-friendly production and packaging comes down, and consumer awareness grows, people will come to expect sustainable options and being green will become a cost of entry into mid- to-high level hospitality markets. Companies that don’t follow the flow risk being regarded as out of touch and tone deaf.
Potato Head Bali, where plastic is contraband
An example of what some might call extreme sustainability is Potato Head Bali. CNBC reports that a garbage emergency was declared in Indonesia in 2017 and Bali’s beaches were covered in waste. Potato Head seeks to not only reduce waste output but to also educate people about the problem.
Also according to CNBC, at the resort, menus are made of old tires and flip flops, soap dispensers and tissue boxes are made from oyster shells, polystyrene foam, bottle caps, and limestone; candle wax is made from used cooking oil, and glass candle holders are made from used wine bottles. At the entrance of the beach club is an art installation of 5,000 flip flops collected from Bali beaches. Single use plastics are banned. Only three percent of waste generated by Potato Head ends up in landfills.
“The consumer today demands authenticity and they demand sustainable solutions,” Simon J. Pestridge, Chief Experience Officer of Potato Head Family told CNBC. “If you’re not focused on it, we don’t think you’ll be in business in a few years.”
“The younger generation that have disposable income for the first time, if you don’t offer them solutions, why would they come?” he added. As a bonus, Pestridge told CNBC that these efforts have actually resulted in cost savings for the resort.
Social justice to the forefront
It’s not just about sustainability. Research finds that consumers, particularly younger ones, want brands to go even further towards actively demonstrating an interest in protecting the world and its citizens. Recent research from the Corporate Social Mind found that Americans report spending more time learning about social issues and how companies are getting involved, and many are taking time to educate themselves more deeply about the social issues that interest them.
Sixty-six percent of respondents said that they visit a company’s website or use an online search engine to learn about the company’s support of a social issue on a somewhat frequent to very frequent basis. The issues listed in the study included, but weren’t limited to: racial equity, social justice, anti-discrimination; immigration/refugee issues, and environment and climate change.
Good intentions won’t be enough. A 2020 survey from Sprout Social also found that consumer loyalty could shift if brands don’t honor their social justice commitments and promises.
PR News reported that 42% of 1,000 consumers say they would start buying from competitors if brands don’t stay true to their word and follow through with action, and 55% said they “expect brands to take a stance that goes beyond corporate statements and monetary donations, such as new corporate initiatives, or commitments to specific goals.” These expectations increase to 65% among millennials.
Green Queen reports that a study from Wunderman Thompson backs this up. A survey of more than 3,000 respondents across China, the U.K. and U.S. found that 8 in 10 consumers now expect businesses to help solve global climate and social justice issues. More than 8 in 10 want businesses to “play their part” to solve the challenges of climate change and social inequality, 88% think sustainability should be a standard business practice, and 82% said businesses should put people and the planet before their profits.
Furthermore, consumers are making stronger connections between sustainability and other socioeconomic issues — 80% believe that climate and environmental issues are “inextricably linked” with poverty, inequality, and social justice.
“Regenerative,” is apparently a term people are using to refer to brands that go beyond recycling or becoming carbon neutral and that are actively working to have a positive impact on the planet. Green Queen reports that being “regenerative” will become a major value that consumers are looking for from brands. They will also want evidence to back up claims.
Companies looking to win over younger, affluent consumers would do well to take heed. With elder millennials now in their 40s, Generation Z is moving in, making up an estimated 20% of the global market and increasing parts of the travel and wellness markets. Gen Z consumers are the most conscious and are at the forefront of driving demand in sustainable industries.
What does this mean for spa, wellness, and hospitality?
We are all probably somewhat informed on how to be more sustainable in our businesses with low impact products in sustainable packaging, eco-friendly cleaner, energy efficient spaces, and finding more ways to reduce waste
Beyond that, forward thinking spas are marrying sustainability with social issues. In a Spotlight interview with Spa Executive, Arabelle del Pilar Rosario, Spa & Wellness Director for Meliá Hotels International in Dominican Republic, said one of the company’s spa concepts is “a focus on local roots using ingredients like coffee, salt, and chocolate from the Dominican Republic.” She went on to say, “We use Moringa, which is a superfood and powerful plant that grows everywhere in the country. It will grow as much as you cut it, so it’s very sustainable which is important to us. We take pride in our efforts to support local economies and protect fragile ecosystems, using earth-friendly products sourced from within 100 km of each of our locations. I see this as a way of adding authenticity to the spa experience while helping surrounding communities.”
Given the volume of available information about the global state of affairs, it stands to reason that consumers will become more conscious in the coming years, and those with spending power will want these concerns addressed.
The spas and luxury hospitality companies that pay attention will come out ahead.
As written by Elizabeth Bromstein on 23rd of March, 2022 for Spa Executive.