At a time of so much change in so many processes, there is undeniable momentum on the integration of sustainable practices and partners in travel management. While this trend is not necessarily new for 2021, the presence and importance of this element—particularly in air and hotel procurement—has rapidly climbed the priority list of Fortune 500 companies.
This trend cuts across every vertical market. As we've engaged in pandemic-driven, revamped hotel program management exercises on multiple continents over the past year, it's now clear that sustainability ranks among the top three priorities, including traveler safety and cost issues. What's more, the effort to work with partners driving sustainable processes comes from all corporate corners, not merely procurement, finance or human resources.
According to the Global Sustainable Investment Alliance, companies around the world made $31 trillion in sustainable investments by the beginning of 2019. A BCG Consulting study that same year looked at the valuations of companies in three important industries—chemicals, energy, and mining—and cross-referenced carbon emissions, and found businesses with lower carbon emissions had valuations as much as 13 percent higher than companies reporting higher emissions (all else being equal). As always, data drives change, and these metrics are impacting executive decision making.
Most companies reset their travel programs in 2020, and many went beyond revamping traveler safety and ROI measurement to include sustainability reporting and clearly defined targets. The C-suite and executive boards now have pointed expectations when it comes to collaborating with suppliers that have sustainable approaches to everyday business practices.
Moreover, these expectations are more frequently impacting travel procurement and the typical business traveler experience. Buyers are asking how technology providers, suppliers and other entities can contribute to reducing carbon emissions even as business travel begins to re-emerge.
Suppliers Will Reprioritize to Capture Margin
HRS sees hotel groups big and small adjusting to this reality. Obviously, the dramatic revenue losses incurred in 2020 has likely stunted investments in sustainable practices. From our vantage point, as hotels of any size start to recover, investment in these activities should move to the top of the list for 2021. The simple reason why: Higher-margin corporate accounts will want details on what they do, how they do it, and how it can be measured and thereby align with a corporation's specifically defined carbon emission management strategy.
Beyond procurement, a hotel's performance on the sustainability front will increasingly appear in the booking paths of online tools used by travelers and executive admins. Hotels already have a good start here, with many having taken steps to highlight their new hygiene protocols in the wake of the pandemic. They will need to continue focusing on this display element, making it easier for shoppers to identify hotels that meet corporate and personal preferences.
Sustainability is one of the mega-trends for this decade. As business travel re-emerges in 2021, our need as a community to engage on sustainability issues represents both a challenge to address and an opportunity to seize.