Going
beyond
Greenwashing:Generating
a
Sustainable
Strategy
for
the
Tourism
Industry
Author: Ashley Herbert Student ID: 11400757
Contact: alherbert15@gmail.com Supervisor: Markus Paukku Program: MBA Full-Time Date of Submission: 31/8/2017
Executive Summary
Founder of Earth Day, Gaylord Nelson, is quoted as saying, “The wealth of the nation is its air, water, soil, forests, minerals, rivers, lakes, oceans, scenic beauty, wildlife habitats and
biodiversity… that’s all there is. That’s the whole economy. That’s where all the economic activity and jobs come from. These biological systems are the sustaining wealth of the world.” Amidst the drama surrounding the Paris Climate Accord and the initiative that many global cities are taking to become more sustainable, the world has never been paying more attention to
environmental and social issues as they are now. Unfortunately, with the rate that we are currently going, this recent attention is not coming at the speed or with the amount of change needed to stop the damage being done and repair what has been done. Former Secretary General of the United Nations, Ban Ki-moon, has said that “sustainable development is the pathway to the future we want for all. It offers a framework to generate economic growth, achieve social justice, exercise environmental stewardship and strengthen governance.” It is not only in the best interest of the world, but the bottom line for all businesses to take on a more sustainable strategy. This paper will confront the growing problem of mass tourism on the environment and how a travel company, like TravelBird, should address this issue. Many companies have started to “greenwash”, which is “the practice of making unsubstantiated or misleading claims about a firm’s environmental impact”, a tactic used to improve their company appearance.(Berrone, Pascual, 2015) These companies stack their websites with green logos and spend millions on marketing and advertising around their sustainable features, garnering widespread approval from consumers that prefer to spend their money on sustainable products. They later receive backlash and negative reviews when it is revealed that their practices are not as sustainable as was
suggested. I will address the benefits that TravelBird has to gain by going beyond greenwashing and generating a transformational business model that includes sustainability for the company as well as its travellers. This paper will also bring forth some of the main challenges that a travel company will face when creating and implementing such a strategy. I will end with
recommendations to the managers of TravelBird for what their new sustainable strategy should look like and how they should begin implementing such a strategy.
Table Of Contents
Introduction 4
Industry Level 5
Company Level 7
Literature Introduction 7
Expected outcomes/managerial recommendations 12
Literature/Underlying Theory 12
The Strategy Handbook 16
Step 2-Mapping Strategy 17
Resources & Competencies 17
Partners 18
Customers & Needs 18
Competitors 18
Value Proposition 19
Revenue Model 19
Risks & Costs 20
Values & Goals 20
Organizational Climate 21
Trends & Uncertainties 21
Step 3- Assessing Strategy 21
Step 4- Innovating Strategy 23
Step 5- Formulating Strategy 24
Application of Literature 24
Methodology 24 Phase I 25 Phase II 25 Phase III 25 Phase IV 26 Challenges 26 Conclusions/Findings 27 Managerial recommendations 27
Recommendations for Home: 29
Recommendations for Travel (Business-Model Transformation): 30
Recommendations for Communication: 31
Primary Business Challenge 31
Limitations 32 References 33
Introduction
A increasing number of consumers across the world have started to wake up to the fact that current business practices are wreaking havoc on the environment. Consumers, especially millennials, are demanding that businesses provide transparency and take responsibility for their impact on the world. In order to keep please customers and ensure their own sustainable future, organizations must pay attention to these demands and find ways to innovate and implement environmentally friendly business practices. The question then is, how do organizations implement practices that will not only benefit the environment but also their bottom line? Environmentalist, Paul Hawken, has said that “we have the capacity to create a remarkably different economy: one that can restore ecosystems and protect the environment while bringing forth innovation, prosperity, meaningful work, and true security.”
Many studies have shown that going green and implementing a closed circle organization can be beneficial and even profit generating, especially for a service intensive industry such as tourism. “Information and service-intensive industries will find global sustainability to be a
competency-enhancing challenge that offers significant potential for substitution and leapfrogging over existing unsustainable technologies.” (Hart & Milstein, 1999) There is a difference seen in social and environmental impacts from those organizations interested in results from soft sustainable practices that have no real significance in their business, and those that take on sustainable practices throughout their entire business organization. “Sustainable business can be a profitable business, as socially and environmentally oriented goals may improve pricing power, increase value chain efficiency, create goodwill, addresses new potentially profitable markets, or enhance revenues and lower costs” (Epstein & Buhovac, 2014).
Industry Level
According to the United Nations World Tourism Organization, the travel industry comprises 10% of the world GDP and is responsible for one in every eleven jobs globally. This industry is incredibly influential and with an expected 1.8 billion international tourists by 2030, it will only get more powerful. (www2.unwto.org) Finding a way to restore and support the environment is especially important to the travel industry as that is their future. This not only pertains to hotels implementing a recycling program but must extend to housing, employment, and local resources. Some cities and organizations are acting upon the increasing amount of tourists flooding in each year. Barcelona has refused additional permits to build accommodations inside the city center, Santorini has limited the amount of cruise ships allowed into their ports, and Amsterdam has created a marketing campaign to encourage tourists to venture out into other neighborhoods of the city to alleviate congestion in the city center. These destinations face environmental, economic, and cultural damage through property destruction, tourism fund leakage, and globalization.
The United Nations defines sustainable development as “development that meets the needs of the present without compromising the ability of the future generations to meet their own needs.” Currently, the travel industry is having difficulties with the lack of sustainable partners available, lack of knowledge about sustainable practices from consumers and businesses, and the increase of pressure from outside forces to effectively implement sustainable practices. No good deed goes unpunished and with so many NGO’s and outside organizations monitoring the practices of self-crediting “sustainable” companies, it can be a risk to implement sustainable practices, especially if the company is found to be greenwashing. As there is “ no comprehensive view of how firms should approach embedding sustainability”, it may appear to be an unnecessary gamble. (Bocken et al., 2014, p. 43). However, if done properly, a sustainable strategy can position the company to reap the rewards of an undersaturated market and be creative in their approach. “Addressing societal issues is often good business in itself—social-oriented products may increase sales and pricing power, sustainability initiatives often increase the efficiency of
the value chain, CSR projects can create goodwill in the communities in which companies operate, and addressing the needs of low-income populations may open up profitable new markets.” (Santos, 2015)
Booking.com conducted a survey in 2014 in which 68% of travellers were likely to choose an accommodation if they knew it was eco-friendly. However, this is also met with confusion as to what “traveling sustainably” means and the perception that it is difficult to be sustainable while travelling. This is reflected in the 5% of people surveyed that thought it was already easy to travel sustainably when, in fact, “over a quarter (26%) of the accommodations surveyed confirmed they have initiatives in place to protect the environment while almost a fifth (19%) support the local community. This rises to a third (33%) and nearly a quarter (24%) respectively for larger properties (36+ rooms). In addition, over half (51%) of properties are currently
credited as following official sustainability criteria from a recognised organisation in
sustainability such as the Global Sustainable Tourism Council.” (Booking.com. 2016,2017) Pepijn Rijvers, Chief Marketing Officer at Booking.com has said, “Since adding eco-based interests and destination endorsements to our Passion Search tool at Booking.com, we’ve also seen a growing number of endorsements left by travelers, so the sustainable appetite is there.” (Booking.com) There is obviously an interest from consumers to be sustainable while travelling, but the lack of knowledge and the hesitation to trust companies, for fear of deception, may be keeping them from pushing for more sustainable options. This is mirrored in companies that want to be more sustainable because not all travel companies know how to ensure they are more sustainable and they don’t want to take the risk of potentially giving their company a bad name if they are found to be less sustainable than is perceived.
Company Level
This paper will focus on the travel industry, specifically TravelBird, and the challenges that arise when creating and implementing a change in business models towards a more sustainable focus. TravelBird is scale-up travel company in Amsterdam, The Netherlands, that offers inspiring travel packages across 11 countries around Europe. Their value proposition has been to provide personalised offerings based on past views and purchases with a regularly updated inventory that aims to inspire customers to travel to places they would not normally venture to. Since 2010, the company has provided transportation, accommodation, and leisure activities for its more than 5 million travellers worldwide. TravelBird currently is having an issue finding a way to continue to scale up and increase profits, while also doing more to ensure the future of the industry and give back to the communities to which they send customers. Introducing a new sustainable business model could help the company introduce new offerings, expanding their customer base to a younger audience and giving a reason to increase margins while also fulfilling a personal goal to give back. It will also allow them to be a front-runner in the increasingly popular trend for companies to go green. Creating a sustainable business model will protect the future of the industry and can also be their means of differentiation, bringing in profits with increased margins. According to Waddock, “more than half of corporations’ assets today are found not in tangible but rather in intangible assets such as good will, reputation, and human capital, which in turn rely on the quality of stakeholder relationships the company has developed.”(Waddock, S. 2008)
Literature Introduction
I will be using Rangan’s, “The Truth About CSR”, which discusses the three theatres of sustainable practice: Philanthropy, Improving Operational Effectiveness, and Transforming the Business Model. (Rangan et. Al, 2015) CSR is a term that can be applied to many different facets of the business and at varying degrees of commitment and in order for a business to optimize their CSR practices, all three theatres need to be aligned with each other and with the goals and vision of the company. Each theatre explains the degree in which sustainability is implemented
into an organization and the benefits and risks the organization faces with each theatre. From recycling projects to completely new business entities, the ways that a company can be sustainable are vast and each has their own economic or social benefit.
The first theatre is philanthropy. These efforts include monetary donations, community
initiatives, and employee volunteer work. Out of the respondents surveyed, the largest amount participated in this theatre, at 48%. This is most likely because these efforts are the easiest to accomplish and improves the company’s social standing 84%. However, philanthropy has shown to increase costs by 41% and only increased revenue by 13%. (Rangan et. al, 2015) Many
companies that only focus on this area are accused of greenwashing, as they only incorporate sustainable initiatives at a very superficial level, mostly to reap the benefits of the increased social standing. Focusing only on this theatre brings forth challenges from NGOs and other organizations that sometimes reveal companies that are only participating for the green logo they can add to their website resulting in a negative response from customers that feel deceived. The second theatre focuses on improving operational effectiveness. This theatre encompases any waste reduction or employee investments such as healthcare or education. These initiatives may reduce costs, increase revenue, or improve employee retention but it is not always the case. Initiatives in this theatre tend to be larger investments compared to the first theatre but exist within the current business model of the company. The benefits of this theatre tend to be more internal and focused on reducing the costs of the organization, rather than improving any external factors such as the environment or local economy.
The last theatre, and the theatre that I will focus on, is transforming the business model. This requires the company to create new business strategies in order to address social and
environmental challenges and cannot be achieved through small, incremental changes. Theatre three programs are sometimes completely different entities than the company’s main business model. These are often focused on a specific product or market that cannot be reached through the traditional business model but have a long-lasting impact on the company itself by addressing
social and environmental issues. This entails a completely new strategy rather than incremental changes that can be seen in the previous two theatres.
“The Truth about CSR” also provides a four step process in bringing coherence to a company’s portfolio starting by aligning programs within each theatre. This first step includes eliminating any program that is not in line with the business or the social/environmental issue at hand. The second step requires the firm to set standards and metrics for what they see a successful,
sustainable initiative to produce. How much money should be raised? What percentage of waste is expected to be reduced? This is especially crucial for initiatives in theatre three as the success of the business sector could depend on it. Step three is coordinating programs across theatres. This is more than just aligning all initiatives towards the exact same issue but rather to create a complete portfolio that enhances and is consistent with the company’s business plan. The fourth, and last step is to develop an interdisciplinary CSR strategy. This should include a position whose sole role is to take care of all CSR initiatives but usually ends up being taken care of by an HR representative or a similar role in addition to their usual job tasks.
I will also use Jeroen Kraaijenbrink’s, The Strategy Handbook, for a strategy framework. (Kraaijenbrink, 2015) This book creates a sketch, laying out the ten core elements in creating a strategy such as resources, partners, value proposition, etc. I will use this sketch to discuss the current strategy of TravelBird and what areas they should focus on in order to implement a business model transformation. Not all of the ten core elements need to change in order for a new strategy to be generated, therefore I will recommend only a select few in order to add more sustainable initiatives but not completely change the company completely. This paper will be used to focus on the business model transformation theatre which requires the highest degree of sustainability initiatives as it usually involves new products or businesses. For TravelBird, I will go through the process in which the company should use to generate and implement a strategy of bringing in new products, in the form of sustainable trips.
The Strategy Handbook covers the process of generating a new strategy by breaking down the company into ten different sectors such as value proposition, customers, and partners.
(Kraaijenbrink, 2015) By mapping out the company’s current strategy, we can hone in on the areas that can be altered in order to move forward in a new direction. In the case of TravelBird, I would not recommend a completely new strategy but one that alters a few key areas in order to provide more sustainable options for customers.
Fig. 1 (Kraaijenbrink, 2015)
“A good strategy aims at doing something different from others. This doesn’t have to be 100% unique, but it should have at least some unique elements.” (Kraaijenbrink, 2015) The elements for TravelBird, being sustainable travel options as I will be focusing on the new business model
theatre. This is in line with the book’s opinion that strategy generation “includes creating new products, services, customers, markets, and even creating (or at least influencing) your broader environment.” As will be highlighted later, partners are key stakeholders that will need to be paid special attention to when generating the new strategy for TravelBird. “To be sustainable”,
company-wide as well as within the triple-bottom line, “a strategy should take into account the interests of important stakeholders.” The partners that TravelBird does business with are part of their value creation as they are the reason the company is able to produce discounts on rooms for customers. Their interests are extremely important and therefore need to be aligned with what TravelBird wants to do.
The Strategy Handbook outlines the five steps of strategy generation: Activating key stakeholders, Mapping strategy, Assessing strategy, Innovating strategy, and Formulating strategy. (Kraaijenbrink, 2015) Activating key stakeholders involves rallying the people in your organization that will be both receptive to the new strategy as well as help you mobilize the resources needed for the new strategy. This might include the CEO as well as other C-Level managers that have the authority to make company-wide decisions and can employ others to help carry out those decisions. The next step is mapping the strategy. This is where the ten core elements explained earlier is used. “Without a proper understanding of the organization’s actual strategy, it is quite hard to really innovate or improve it.” (Kraaijenbrink, 2015) By listing the ten elements of the current strategy, we can take a look at what is doing well for the company and what can be changed or altered to align better with the new strategy.
Step three is to assess the strategy. We will look at the ten elements listed and test the quality of the organization’s strategy against relevant criteria. Innovating the strategy is step four. This includes renewing and redesigning the organization’s strategy through change, whether that is incremental or radical. Here the company can determine whether to scrap the entire current strategy or just to pivot in certain elements. The last step is to formulate a new strategy. This is the step in which the organization makes it known to a wider audience, such as the rest of the organization or the public, that they have a new direction and do so through pictures and
frameworks easily understood by all. As I believe that step one has already been taken, in that the CEO and other C-level persons in the organization are on board with the idea of a new
sustainable strategy, I will focus on steps two through five of the strategy generation. These steps with be pertaining to the new, theatre three, business model.
By combining these two literatures, I will generate a strategy for TravelBird to transform their business model to become more sustainable. The recommendations I will provide will range from philanthropic initiatives to business model changes that will use their current missions and visions but with a sustainable focus. This paper will be targeting the business model changes, or the theatre three initiatives, specifically in both the strategy generation and implementation. (Rangan et. al., 2015)
Expected outcomes/managerial recommendations
I expect my recommended changes to strategy to be surrounding the partners, value proposition, and values and goals. With changes to these three areas, I would expect changes to occur in risks and costs, as well as trends and uncertainties. The recommendations I expect to bring to
management will be to change the way that partners are sourced by prioritizing more sustainable accommodations and leisure activities, focusing on the sustainability aspect of our value
proposition by making sustainable trips a more prominent and expected feature, and by clearly communicating our values and goals of being a more sustainable company and how our travellers can do the same.
Literature/Underlying
Theory
I will be using “The Truth About CSR” to specify what kind of sustainable difference we want to see at TravelBird.(Rangan et. Al, 2015) I will be using The Strategy Handbook to generate a new strategy to which TravelBird can pivot to from the old strategy. (Kraaijenbrink, 2015) This new strategy will support the growth of the sustainable trip. These trips can be created without a
massive overhaul of the current strategy, but rather a tweak of the current structure. When generating this new strategy, I will be focusing on initiatives created from the application of the first set of literature.
“The Truth About CSR”
Although TravelBird will be implementing sustainable business practices that apply to all three of the theatres in “The Truth About CSR”, I will only be focusing on Theatre three,
business-model transformations. (Rangan et. Al, 2015) While theatres one and two can have an impact socially, environmentally, and economically, theatre three is the most intensive to
implement and produces the most impactful outcomes in the long run. The standard for a theatre three initiative is that it is an “improved business performance” that “is predicated on achieving social or environmental results”. (Rangan et. al, 2015) For TravelBird specifically, I will be applying the implementation of this theatre to the creation of a new category. TravelBird currently divides types of trips into categories such as “Experience”, “City Breaks”, etc. If we apply the theatre three guidelines for a business-model transformation, I would need to implement a new business model as “theatre three initiatives almost always call for a new business model rather than incremental extensions.”(Rangan et. al, 2015)
This new category I created includes trips all over the world with varying degrees of
sustainability for each offer. Our holiday packages range from an Agro-tourism Farm in Sicily, to a Green Key awarded hotel in Paris with bike rentals at Versailles, to a cultural immersive round-trip through Vietnam. After creating these packages, our team put together a landing page and a blog post which details what sustainability means to TravelBird and how each of these packages embodies a sustainable way to travel. Because of our limitations while getting this new category started up, we wanted to relay to customers very transparently to which degree of sustainability these offerings fall in. All include flights without option for carbon offset, some offer rental cars that are not electric or hybrid, and some have accommodations that are not Green Key approved. It was important for us to let the customer know that while these offerings were under the sustainable category, they may not be a zero carbon holiday.
When applying this literature I find that it is extremely difficult to do from the bottom up as a corporate entrepreneur. While management is on board with finding ways to be more
sustainable, limitations within our systems and our structure makes this process very difficult. It is not a priority for Account Managers to source accommodations that are considered
sustainable, our main source for rental cars does not allow us to have hybrid or electric options, and our sources for leisure products is extremely limited to a company that does not always guarantee sustainable options. Additionally, while management is on board with more
sustainable measures, not everyone in the company has this front of mind. Account managers are not intentionally sourcing sustainable accommodations or leisure products, our partner resources do not extend to hybrid or electric cars for rent or transportation to and from the airport, and our financial and web teams are not set up to take on the task of carbon offset. Furthermore,
TravelBird has not yet taken a company-wide declaration of sustainability. For now, this is more of a pipe dream and something that they are still gathering data on before implementing anything permanent.
“The Truth About CSR” suggests that it is important to align and coordinate all programs within and throughout the theatres towards one goal. As TravelBird doesn’t seem to have any CSR initiatives at the moment, this is very easy to do. We can build upon the new sustainable business model and align all programs accordingly. Rangan Et. Al states that, “Coordination across
theatres does not mean that all initiatives should necessarily address the same social or
environmental challenge.” Rather that “they form a coherent portfolio”, “whose initiatives are mutually reinforcing and consistent with the firm’s business purpose and values.” (Rangan et. al, 2015)
While this is not feasible for the company at the moment as they are just getting their CSR initiatives started, I believe that any other initiatives can easily be aligned with the company and the new business model. For example, if TravelBird were to start investing in companies local to the areas they send travellers, such as tour operators, the company could in turn use that
economy. This would expand a theatre one initiative into a theatre three initiative. Additionally, they could also include educational opportunities to the business owners and other local
entrepreneurs in the tourism industry which would further expand the theatre three initiatives and add a theatre one initiative.
The paper continues on to show the importance of having an employee or employees to start and ensure the continuance of these initiatives as “coordinated support for CSR initiatives at the top levels of executive management is critical to success.” (Rangan et. al., 2015) Although it is ideal to have a dedicated position for these responsibilities, it is often the case that an HR manager or other top executive is in charge of the tasks. Currently, TravelBird is searching for three
employees to take on the responsibilities which will be divided into local, travel, and communication.
Lastly, “The Truth About CSR” introduces the idea that once implemented, these new measures need to be gauged somehow, either by internal or external auditing groups. (Rangan et. Al, 2015)This is crucial “since creating societal value is essential to business success in this theatre, firms must develop measures both of the social or environmental value produced by a new business model and of the financial results, and must demonstrate how the two are connected.” state that “because they generally involve new business models, theatre three initiatives have particular measurement challenges.” (Rangan et. al., 2015) If TravelBird wants to align their strategy with the UN’s Sustainable Development Goals, they should choose which of the Sustainable Development Goals they will focus on out of the 17. The two sensical goals to start with would be Partnerships for the Goals and Sustainable Cities and Communities as these are most aligned with the new strategy. (“How to Align Your Corporate Citizenship Strategy”, 2017)
To apply the learnings from The Strategy Handbook, I will go through steps 2 through 5 since step one of activating key stakeholders has already taken place. (Kraaijenbrink, 2015) I will mostly focus on step 2 of mapping the strategy as well as step 5 which will take place in the managerial recommendations. Below is step 2, for which I will go through each of the ten elements and detail the current strategy and then what the new strategy will look like when implementing the theatre three initiatives. While I plan to address each of the elements in this book, I will mostly be focusing on partners, value proposition, risks and costs, and values and goals. Although we are generating a new strategy for TravelBird that focuses on sustainability, not every aspect of their current strategy will change. For instance, the revenue model will still remain the same in that the company takes a percentage of the markup attached to the
accommodation, flights, and leisure which is then repackaged for the customer.
Step 2-Mapping Strategy
Resources & Competencies
Currently, TravelBird employs Account Managers for each country in Europe and others that are responsible for long-hauls to Asia, India, Africa, and North and South America. These Account Managers source local accommodations and leisure partners based on the popular destinations to visit things to do while in those cities. Accommodations range from camping cabins in Iceland to five star hotels in Santorini. Leisure products historically have been museum tickets, opera or fado concerts, or bike tours. TravelBird is unique in that Category Managers and Editors take those accommodations and leisure products from Account Managers, package them together with flights and other amenities and write creative descriptions of the holiday packages meant to inspire travellers who know they want to go on holiday but may not have a specific place in mind. Moving forward with the new strategy, Account Managers will source hotels and leisure companies that are socially and environmentally responsible.
Partners
TravelBird’s current partners include accommodations, leisure companies, car rental companies, cruise ships, and car transfer companies. Moving forward with the new strategy, Account
Managers will source accommodations that are taking measures to become more sustainable in their business practices such as carbon reduction, recycling, sourcing locally for employees and products used. Leisure partners sourced should provide culturally relevant tours with local guides so travellers can get the full immersive experience and stay away from exploiting animals or people. Not all partners will initially be set up as sustainable enterprises, therefore, I believe it to be important to take part in finding those that have a desire to move towards a more sustainable future and work with them to educate how that can be possible. Sustainable travel is increasing in popularity and once these companies can see the economic and social benefits from
implementing new practices, I think they will be more receptive to help and we will create stronger partnerships.
Customers & Needs
The current customers for TravelBird are aged 40-65 and are looking for inspiration on the destination and activities for their travel. TravelBird packages holidays for their customers and many other demographics prefer to book their holidays themselves as it is seen as a money saver. With the new strategy, TravelBird should be looking to include a younger demographic in their current customer base. We will be catering travellers that are adventurous, curious, and looking for immersive and authentic experiences. Additionally, TravelBird’s new targeted customers should be open to becoming more conscientious and responsible.
Competitors
Current competitors for TravelBird are TUI, Booking.com, AirBnB, Secret Escapes and many other sites that are country specific preferred booking sites. Although the value propositions are not always the same, customers can find similar hotels and leisure products on all sites. For
instance Booking.com is for customers that know exactly where they want to go and are just looking for basic hotel/flight/car rental information, whereas TravelBird would be a better fit for a traveller that would like suggestions for new destinations or reasons to visit locations they have already been. These competitors would not change much with the new strategy as most of these sites also offer sustainable travel options. However, we might include more companies like Intrepid Travel that coordinate tours in more remote locations as we expand to offer more immersive experiences.
Value Proposition
Framing the value proposition in Sinek’s Golden Circle, TravelBird’s current “What” is fresh inventory, the “How” is personalisation, and the “Why” is inspirational travel. (TEDTalks, 2010) The company is publishing new offers on a daily basis and packaging new inspirational trip ideas. They are able to do this through personalisation tracking through email offers as well as Category Managers that monitor travel and order trends. Inspirational travel is the reason that TravelBird exists.
With the new strategy, the “What” will be sustainable travel offerings, the “How” will be strong partnerships with accommodations and leisure companies, and the “Why” will be sustainable, inspirational travel. The strengthening of partner relationships will be crucial in differentiating TravelBird from other companies. These partnerships will not only rely on allocation in exchange for promotion but TravelBird will provide information and expertise on becoming a more sustainable company.
Revenue Model
Currently, the revenue model for TravelBird is set up so that the company takes a commission on all packaged holidays above the price given by accommodations, leisure, and flights. The
structure of the revenue model for TravelBird will not change. This may only be different for special types of partnerships. For example, if they find a local leisure company in one of our
destinations to invest in, and use that company for travellers, the revenue model might be structured differently than just commission on a discounted rate.
Risks & Costs
The risks that TravelBird currently bears are mostly financial. If the company packages a deal including flights and those flights skyrocket in price without the site adjusting accordingly, the company will take a hit on the difference the customer has paid. Additionally, if there is any issue with the packages that the company provides, it is TravelBird’s responsibility to repay the customer or partner that was affected.
Moving forward, TravelBird will continue to have the same financial risks, plus more in addition to social risks. Sustainable trips may allow you to charge a premium for the product, however, these trips need to continue to be affordable and still in line with the type of holiday that is in demand. Not every traveller will want to sacrifice comfort for sustainable travel so unless they are still being offered the same level of comfort at a reasonable price, they will not purchase. Social risks will include inviting criticism from NGOs and others by declaring the company as “green”. This is why communication is so important for a company like TravelBird. Especially if the company is offering flights, it should specify what measures they are taking to become more sustainable since carbon neutral is not an option at the moment. However, it might be considered more of a risk to not shift to being a socially responsible company. There can be long-term risks associated with not changing with the times. The company may lose out on being one of the first to market with this type of strategy or new laws for travel may leave TravelBird scrambling to change their strategy too late.
Values & Goals
TravelBird currently has goals to be the number one travel inspiration provider in Europe. The company focuses on providing unique and constant inventory based on personalization geared towards each customer’s preferences. Moving forward, this inspiration should be geared more
