Social enterprises sell products or services to provide assistance and opportunity to disadvantaged populations. As opposed to a traditional non-profit, a social entrepreneur uses market-based mechanisms to fund social and environmental impact. Within the hospitality and tourism context, this ensures higher local benefit, rather than the leakage of resources to multi-national companies, as is often the case in this industry.
I recently spoke with Alisha Maxfield of Buy Social Canada, an organization that certifies and connects vendors and buyers in social procurement. Ms. Maxfield shared the example of Parq Vancouver, which has 2 hotels, 8 restaurants, event space, and a casino, and was required by the city to meet minimum thresholds of social hiring and social procurement.
The impetus behind this was a Community Benefit Agreement. CBAs are between developers and community coalitions and tend to be associated with anchor institution projects and infrastructure development.(1) (Anchor institutions include hospitals, universities, hotels, convention centers, and other place-based entities that are unlikely to relocate. This is an innovative approach.)
Ms. Maxfield explained, “these contractors have never had to come up against these kinds of requirements. They’ve always had to do something with LEED or environmental requirements, but now they’re being asked to look at local, social, and community benefits because this development is adjacent to an inner-city neighborhood that is one of the poorest in Canada.” Parq contracted workers through Embers, a day labor social enterprise, and the Parq Marriott procures coffee from a local social enterprise, East Van Roasters, that employees women recovering from additcion and abuse. Ultimately, the Parq Vancouver project exceeded expectations set by the CBA.
There are several private enterprise benefits to CBAs and social procurement:
- Tax incentives or other advantages such as fast-tracked zoning or funding for public works and infrastructure.
- Lower risk associated with the “not in my backyard” reaction of neighborhoods and community groups. When community coalitions are involved as key stakeholders, this paves the way for relationships that will benefit all parties. In regions suffering from overtourism backlash, developers should adopt social procurement and social hiring strategies.
- Opportunity to build brand image. Sustainability is a selling point when there is a tangible, authentic message naturally woven into the offering, such as the case with Parq Marriott’s coffee with a social purpose.
If it’s so great, why aren’t we doing more?
This approach is not without its challenges, despite growing evidence of its benefits.
One study(2) outlined key challenges regarding information and incubation. Much like my recent efforts to search for an environmentally friendly hotel, the authors struggled to find examples of social enterprise within tourism and hospitality. This is indicative of either too few examples, low levels of awareness, or both. Either way, opportunity abounds. Another market-based challenge is the lack of hubs for innovation and support that specifically target social entrepreneurship within this sector. You can read more about the role incubators can play here.
Every report I read, including several not referenced here, echoed this concern: identifying the right indicators and collecting adequate data to quantify returns is a significant challenge. Tax incentives tied to reporting could lead to greater agreement among stakeholders on what and how to report. As the adage goes, “you manage what you measure.” Some argue that the exclusion of social metrics promotes the values of those focused purely on economic returns.
While difficult to quantify, the community benefit has been proven using Social Return on Investment (SROI) methodology. One study showed for every $1 invested in a social enterprise, there was an estimated return of $4.13 in community benefits.(3) That’s more than a 300% return! These benefits included lower healthcare costs, reduced dependence on social services (for housing, food, etc.), lower crime rates, and other factors. Furthermore, participants stated the greatest outcome was improved quality of life, which was not included in the calculation because it is problematic to measure.
The Canadian Context
A note on the common Canadian thread in the research I drew upon. When I set out to write this, it was not my intention. There is a benefit of this coincidental, singular focus, though. Other nations, with similar conditions, may learn from Canada’s experience. As de Lange and Dodds pointed out, Canada:
- needs to shift from resource-based economy to diversify from its dependence, particularly on oil and gas.
- has a tourism sector that is below-the-OECD-average rate for GDP contribution and employment.
- has room to grow the sector by promoting promote cultural heritage and tourism that has yet to be tapped.
- can build its national travel brand on sustainability.
- lacks a framework or database for measuring the impact of tourism-related social enterprise.
Some inspirational examples of Canadian hospitality and tourism social enterprises are: MealShare, ParkBus, Skwachays, Fogo Island Inn (check out the Economic Nutrition section of their website), and Planeterra. As always, I love to hear from readers – please email me to share examples of tourism and hospitality social enterprises and social procurement, at firstname.lastname@example.org.
(1) Galley, A., Atkinson Foundation, & Mowat Centre for Policy Innovation. (2015). Community benefits agreements. Retrieved from http://www.deslibris.ca/ID/247478
(2) de Lange, D., & Dodds, R. (2017). Increasing sustainable tourism through social entrepreneurship. International Journal of Contemporary Hospitality
Management, 29(7), 1977–2002. https://doi.org/10.1108/IJCHM-02-2016-0096
(3) Ernst & Young LLP. (2017). Social impact of hiring target employee group individuals. Retrieved from http://www.atira.bc.ca/sites/default/files/APMI%20Social%20Impact%20Report%20-%20July%202017.pdf