Why do small tourism businesses struggle with sustainability? Are incubators the solution?

Why do small tourism businesses struggle with sustainability? Are incubators the solution?

The UNWTO and UNDP recently issued an analysis of country and company reports on sustainability initiatives in tourism. Their report shows where the most activity has occurred and where opportunities lie for the industry to address the SDGs. There is a lot to unpack in this report, but I want to hone in on one concept: the role of small to medium enterprises (SMEs).  

Even though the private sector research that went into this comes from the largest global tourism companies in the world, SMEs are called out 5 times in the report as being a critical part of the way forward.

“…the private sector – particularly small- and medium-sized enterprises (SMEs) which represent the bulk of the tourism sector – must be sensitized and given access to knowledge and capacity, including in new technologies that encourage investment in greener and more sustainable businesses…[SMEs] often lack awareness of how efforts and investment in sustainable business operations can also significantly boost competitiveness and profitability, while increasing customer and host community satisfaction” (p. 13).

When I create content, I tend to have an audience in mind. While I’d like to be as broadly applicable as possible, I am often thinking of the SME owner/manager. I know from years of mentoring, teaching, and being one, the realities of their environment. SMEs do not have the departments or teams of people preparing sustainability strategies and reports that large corporations do. Sometimes, they are just too busy being sustainable to spend time thinking or talking about it.

But many SMEs are not sustainable. While doing my doctoral research, I found there are a few reasons for this:

  • Lack awareness and knowledge. Not all entrepreneurs are trained MBAs. The entrepreneurs I studied and have worked with over the last decade felt inadequate when it came to strategic planning. They are still trying to get the basics right, much less overlay complex global frameworks.
  • Lack resources and time. Even if they did have strategic super powers, entrepreneurs are drowning in daily operations and focusing on growth. The report specifically calls out the role of governments to provide access to financing (SDG 8.3).
  • The “too small to matter” mentality.  Small business contribution does pale in comparison to a multinational corporation (MNC) when it comes to detrimental environmental activities…that is if you stack up one SME against one MNC, but most countries boast a 90%+ rate of small businesses, even in nations where entrepreneurial support is weak. The aggregation of the SME footprint is significant!
  • Policy is not conducive. In my study of food related social entrepreneurs, one of the greatest sources of frustration was in navigating the confusing and sometimes downright contradicting US local, state, and federal laws as it relates to the handling, labeling, and distribution of food.

Incubate a Solution

So, what is the small tourism business owner to do? Where can they go for help?

Incubators have popped up everywhere. They are no longer just the purview of software and biotech. There are specialty incubators such as those for travel and tourism or food. Whether part of public programs, the result of public-private partnerships, started by private investors, or within large companies, these centers provide mentorship, training, networking, and access to equipment and capital.

While there are incubators exclusively for social enterprises, they are likely already aligning programs and goals with SDG targets.  So special attention and assistance is needed for those whose primary focus is economic outcomes.

What a travel and tourism incubator can do:

  • Recruit mentors from the sustainability and corporate responsibility teams at the global companies mentioned in the UNWTO/UNDP report (pages 27-31).
  • Integrate SDGs into popular startup methodologies like the Business Model Canvas and Lean Startup. UNDP has done this in Iraq, where there is little support or education for entrepreneurship.
  • Use the Companies and CSR actions column in Table 1 (pages 14, 15 of the UNWTO/UNDP report) as a guide to creating specific and actionable strategies and plans.
  • Use relevant SDG targets in the judging criteria for selection and competitions.
  • Offer training on the SDGs and other global sustainability frameworks but cut out the noise and complexity not relevant to the SME clients.
  • Use the power of aggregation (economies of scale) to provide access to green technology and more sustainable procurement practices.
  • Align their own goals, strategy, and operations with the SDGs (in other words, practice what you preach).  

As always, I’m interested in hearing your thoughts. If you have worked with an incubator that has excelled at integrating global goals into for-profit startups, please share your stories and experiences.

Aurora Dawn Reinke
Aurora Dawn Reinkehttp://www.astrapto.com
Aurora Dawn Reinke is a sustainability consultant and speaker. Aurora’s firm, Astrapto LLC, guides owners and management teams through change by establishing a vision and strategy for sustainability; demonstrating the business case; engaging, empowering, and equipping stakeholders to achieve the vision; and formalizing and codifying sustainable processes. Aurora has a Doctorate in Business Administration in Social Impact Management. She is a Certified Sustainability Associate from the International Society of Sustainability Professionals and a LEED Green Associate

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