In recent years, the COVID-19 has had a significant impact on most industries. However, the hospitality industry is among the hardest hit (UNWTO, 2022) due to the uncertain demand. Many hotel corporations quickly shifted their attention to survival. The COVID-19 pandemic forced hoteliers to rethink the way to do business and design new business strategies to cope with challenges: now is the perfect time to build strategies to ensure environmental and economic sustainability for a more resilient future (Kramer, 2020). The COVID crisis has highlighted the necessity of a Corporate Social Responsibility (CSR) strategy for the hospitality businesses and has raised awareness that businesses must have appropriate policies that prioritize long-term sustainability above short-term profitability. Therefore, it is important to understand how the hospitality businesses can benefit from the CSR practices and how to implement the CSR effectively.The COVID-19 pandemic forced hoteliers to rethink the way to do business and design new business strategies to cope with challenges: now is the perfect time to build strategies to ensure environmental and economic sustainability… Click To Tweet
What is Corporate Social Responsibility (CSR)?
CSR means taking responsibility for society and the environment (UN, 2020). Many hotels business striving to be socially responsible use the triple bottom line – the impact on people, planet, and profits- to determine strategic priorities. The CSR efforts fall into four categories: environmental, ethical, philanthropic, and economic. In the hospitality industry, the key CSR issues are environmental management (i.e., energy, water, and food waste), carbon footprint, eco-efficiency, responsible sourcing, working conditions/staff turnover, stakeholders’ engagement, human rights, cooperate governance and anti-corruption measures. By practicing CSR properly, the hospitality businesses can create shared values and bring benefits to the community to which they provide services, economic development and employment, and environmentally sustainable initiatives (Lukan, 2018). Thus, the core idea behind CSR is to maximize profits, create long-term value for stakeholders, and create a better value for society and the environment.
How can hotels benefit from CSR practices?
CSR practices can help achieve a better reputation and brand image, increase revenues and customer loyalty, better visibility for stakeholders, and an improved public image (Guzzo et al., 2020): e.g., during the COVID-19 pandemic, hotels provided accommodation to health workers and meals to frontline workers and those in need, whilst redesigning practices to reduce their environmental impact and associated costs, improving brand awareness, reputation and loyalty of customers, creating goodwill, a positive brand image, and provides differentiation in a highly competitive industry (Lukan, 2018). Furthermore, Environmental stewardship is a straightforward and effective CSR initiative for hotels: “Going Green” reduces both carbon footprint and operation costs (Guzzo et al., 2020). Cost of waste can be reduced by providing digital rather than printed information, reusing and recycling resources whenever possible, and automatic turning off lights and taps when no one is around. The COVID-19 pandemic provided challenges but also developed new opportunities to evolve some traditional hotel operations. For example, digital check-in and check-out, providing apps and QR codes to access information, reducing close contact and the use of natural resources. This new CSR approach will continue to enable more sustainable hospitality business in the future.
By implementing CSR, hotels can contribute to the societies they serve through community development programs, encouraging diversity in the workplace, providing skill development programs, and equal opportunity employment. Programs on employee development and training can better attract, motive, and retain employees, an ongoing issue in the hospitality industry (Lukan, 2018). Young people want to work for a company with a positive image and a reputation for doing good. Socially responsible actions and the creation of opportunities for shared values must be part of a company's core competencies, helping hospitality companies to develop environmentally friendly technologies, to promote environmental responsibilities, operate and manage processes boosting productivity while also contributing to the social good (Lukan, 2018). For hotels, with a high level of CSR engagement, the negative impact of Covid-19 on hotel performance was lower, providing better resilience during the crisis (Yeon et al., 2021): the environmental engagements were key in CSR activities to provide resilience. This example shows a positive effect of CSR on performance and value creation for a long-term. Without a proper strategy in place on practices, procedures, and role of hoteliers, the CSR efforts will fail. Thus, how to implement CSR?
How to implement CSR practices?
CSR implementation is a “relational” process to increase the awareness of CSR issues and CSR strategies, embed CSR values within the company, to communicate CSR initiatives internally and externally, and to evaluate the progress of CSR strategies (Fatima & Elbanna, 2022). CSR implementation is complex and needs to be integrated in each department and in all daily activities to be successful. CSR implantation consists of several phases: raising CSR awareness, assessing organizational purpose in a societal context, establishing a CSR definition and vision, assessing current CSR status, developing a CSR strategy, implementing the CSR strategy, communicating about CSR strategy, evaluating CSR strategy, and institutionalizing the CSR policy (Manon et al., 2009).
Furthermore, CSR managers can motive staff to act on sustainability activities, encourage investors/owners to allocate capital for investments in sustainability, and inspire the industry leaders to act or influence sustainability. Internal stakeholders are key to the implementation; to motivating and engage them, they should be fully informed about the company's approach to implementation: They should be aware of the CSR strategy, the reasons for adopting it, its importance to the organization, progress, and difficulties (Fatima & Elbanna, 2022). Education, communication and sharing information are important in every phase of the implementation. Nowadays, social media platforms are blooming, radically altering the communication environment. Most people use this environment because of its simple accessibility. The COVID-19 pandemic has accelerated a digitalization of human contact, with a surge in social media usage. Hotels may this use social media to communicate with external stakeholders and influence their behavior as part of CSR initiatives. Thus, education, communication and sharing information are important in every phase of the CSR implementation.
CSR initiatives are essential for the hospitality business now and in the future to create a competitive advantage, improve sustainability, reputation, and brand image, enhance guests’ experience, reduce operational cost, and boost both their revenues and customer loyalty. CSR can provide resilience during crises and economic hardship in the future. Integrating CSR into cooperate strategies can facilitate innovation, increase competitiveness, simultaneously solving other problems: effective CSR practices can not only reduce the operating costs, but also generate significant benefits for people, planet, and profits.
Dipak Rimal is currently pursuing the MBA in International Business at Vrije Universiteit Amsterdam. This Op-ed article is based on Dipak's research for his MBA course assignment of Managing Sustainability and Diversity in Global Markets. Dipak can be contacted at firstname.lastname@example.org.
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