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A Sustainable Supply Chain ManagementFramework for Tour Operators

Karen SchwartzChristel DeHaan Tourism Travel Research Institute, Nottingham UniversityBusiness School, Nottingham, NG8 1BB, UK

Richard TapperEnvironment Business & Development Group, Kingston-upon-Thames,KT2 6DD, UK and International Centre for Responsible Tourism, LeedsMetropolitan University, Leeds, LS1 3HE, UK

Xavier FontInternational Centre for Responsible Tourism, Leeds MetropolitanUniversity, Leeds, LS1 3HE, UK

This paper presents a framework for tour operators to use in the implementation ofsupply chain management processes to improve sustainability performance. This iscritical for a sector that historically has treated impacts as externalities and suppliersas commodities, and in which recent sustainability actions have been informal or eco-savings led. This framework is part of the outcome from the EU-funded ‘Travelife’programme, which is a joint initiative from European tour operator associations andsustainability standard-setting stakeholders. The framework has been designed asa series of industry-relevant steps: engaging the business and setting policies, inte-grating sustainable supply chain management (SSCM) into the business, assessingsuppliers, setting priorities for actions and evaluating progress. The discussion hereconsiders current tour operator approaches to sustainability, how the framework maybe implemented by specialist and mass-market operators and the challenges faced ifthese early steps are to lead to widespread, full implementation of SSCM initiatives.

doi: 10.2167/jost785a.0

Keywords: tour operations, sustainable supply chain management, corporatesocial responsibility

IntroductionThe tour operating industry is changing faster than any other sector in

tourism; the growth of low-cost airlines, Internet-based travel companies andindependent travel has led to an increasingly competitive market place. Strate-gic development requires added value and differentiated products (Mintel,2006a), which can be achieved through developing product sustainability. Sev-eral European tour operator associations have proposed industrywide actionsto gradually internalise sustainability, with the potential to be used in the best of

0966-9582/08/00 001-17 $20.00/0 C© 2008 K. Schwartz et al.JOURNAL OF SUSTAINABLE TOURISM Vol. 00, No. 0, 2008

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2 Journal of Sustainable Tourism

the cases as a competitive advantage tool, or in the worst of the cases as a meansof risk management and regulation avoidance. These initiatives follow on fromthe ground breaking work of the United Nations Environment Programme, the‘Tour Operators Initiative for Sustainable Tourism Development’ (TOI), whichengaged international tour operators in the identification of five areas in whichto integrate sustainability into business: product design and management, sup-ply chain management, internal management, communication with customersand cooperation with destinations. While all five are clearly inter-linked, the TOIearly on decided to pay special attention to supply chains, since this is wheremost of the impacts take place (Font & Cochrane, 2005a, b).

SCM can be defined as ‘a philosophy of management that involves the man-agement and integration of a set of selected key business processes from enduser through original suppliers, that provides products, services, and informa-tion that add value for customers and other stakeholders through the collab-orative efforts of supply chain members’ (Ho et al., 2002: 4422). SSCM addssustainability into supply chain management (SCM) processes, so that thesealso consider the environmental, social and economic impacts of business activ-ities. In tour operations, this relates to the development of operator-purchasingpolicies and practices that positively contribute to supplier sustainability, andat the same time, improve the quality of the products and services offered.This is not straightforward, since tour operators’ supply chains are diverse andfragmented, including accommodation, transport, excursions/activities, foodand craft and other ancillary services. At times, manufacturing, and to a lesserextent the service sector, have internalised the impacts of the supplier into theproduction process. This initially focused on environmental impacts that ledto lean manufacturing, and less often, on social impacts that enable companiesto claim environmental friendly, organic or fair trade products (Drumwright,1994; Kassinis & Soteriou, 2003; Quazi, 2001; Wilkinson et al., 2001; Williamson& Lynch-Wood, 2001). After all, a company is only as sustainable as its suppliersare. However, this is not an issue that tour operators have looked at in muchdetail. This is due to the multitude of small suppliers under different nationallegislations, the challenges in measuring sustainability in the service sector andthe lack of tangible evidence that addressing this issue would lead to greaterwillingness by customers to purchase or to pay.

‘Travelife’ is the name of a three-year EU LIFE-funded programme to intro-duce sustainability criteria into the supply chain of European tour operators andto provide a market-based regulation of sustainability ecolabels. The programmehas developed the SSCM framework outlined here, backed with sustainabilityassessments, training, action planning and reporting tools, and one single set ofsustainability criteria to be used by all tour operators. Key industry partners arethe UK Federation of Tour Operators (FTO) in association with the Dutch Asso-ciation of Tour Operators (ANVR). They were joined later by the Association ofBelgian Tour Operators (ABTO) and the German Forum Anders Reisen (FAR),and with interest shown by the Italian Tour Operator Association (ASTOI) (seeTravelife, 2006a).

This paper furthers previous research which addressed tour operator atti-tudes and business approaches towards destination sustainability (Budeanu,2005; Carey et al., 1997; Curtin & Busby, 1999; Forsyth, 1995, 1997; Holden, 1996;

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A Sustainable Supply Chain Management Framework for Tour Operators 3

Kalisch, 2002; Klemm & Parkinson, 2001; Miller, 2001; Tapper, 2001; Wearing& McDonald, 2002; Welford et al., 1999), the characteristics of specialised busi-nesses with a focus on sustainability (Curtin & Wilkes, 2005; Fennell & Malloy,1999; Herremans & Welsh, 1999; Sasidharan et al., 2002; Sirakaya & McLellan,1998; Wearing & McDonald, 2002), eco-tour guide training (Black et al., 2001;Weiler & Ham, 2002) and the influence of green consumerism on operator sus-tainability practices (Miller, 2003; Weeden, 2001). Recent research has also be-gun to address operator approaches to environmental management (Herremanset al., 2005) and the role of tour operator associations in developing a commonapproach to sustainability management (Tepelus, 2005; Van der Duim &Van Marwijk, 2006).

The emergence of SSCM in tour operations was first addressed by Tapper(2001) and later detailed in a categorisation of cases per type of supplier re-ported by Font et al. (forthcoming). Future papers will detail current researchby the authors (see Schwartz & Font, 2005), which analyses current SSCM prac-tices and makes recommendations for its ongoing development. Essentially,research to date has identified that, while there are a wide range of examplesof good practice across the industry, there is considerable opportunity for moreoperator-led initiatives and more widespread activity. This corresponds withan increasing focus on SSCM at both an individual company level and throughtrade associations. The following discussion explains the development of thisframework and presents each step. This highlights the current understandingof tour operator attitudes towards SSCM, and the opportunities and challengesfacing the industry.

The Emergence of Sustainable Supply Chain Management in TourOperations

As intermediaries in the travel distribution system, tour operators control themarket place through directing tourist flows. The resultant purchasing power oftour operators in supplier relationships has been well documented. In particular,studies by Buhalis (2000) and Bastakis et al. (2004) have highlighted how animbalance of power in these relationships has in cases led to conflict betweenoperators and suppliers. These issues are of critical importance in developing anunderstanding of current and potential approaches to SSCM, which may takeeither a collaborative, or an enforcement-based approach. Previous research hasidentified that operators do not always take a long-term view of destinationdevelopment and they may claim to lack control over impacts in destinations(Carey et al., 1997; Curtin & Busby, 1999; Forsyth, 1995; Klemm & Parkinson,2001; Miller, 2001; Tapper, 2001). However, the last decade or so has witnessedtremendous change in the business and regulatory environment, which hasplaced corporate social responsibility firmly on the business agenda (Cramer,2005), and tour operations are no exception.

A basic distinction can be made between ‘specialists’ as small operators withless than 50 full-time staff that market their products directly, and ‘mass-market’operators as the vertically integrated companies that retail through travel agen-cies. Broadly speaking, mass-market operators offering mainstream packageshave not traditionally considered sustainability in business processes in the

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same way as specialist operators that sell ‘authentic’ products. However, themarket place is changing rapidly and the activities of operator associations aretestament to the increasing profile of sustainability as an industrywide man-agement issue. The Association of Independent Tour Operators (AITO), whichrepresents independent, specialist operators, has actively encouraged sustain-ability improvements among its members through a well-established respon-sible tourism award scheme. More recently, the Federation of Tour Operators(FTO), which represents the largest UK operators, has required its members tomake a formal commitment towards sustainability. This represents a key shiftin the traditional activities of the mass-market sector, which has been widelycriticised for ‘lacking sustainability’ (Butcher, 2003).

The mass-market industry is characterised by more standardised products,whereby purchasing choice is driven by the features of the accommodation andservices provided. However, several studies have shown that consumer interestin the sustainability of holiday products is a growing area of concern, althoughthis interest is not reflected in actual purchasing decisions (Mintel, 2003; Mori,2000; Tearfund, 2001). This, in addition to the growth of niche market products(Mintel, 2006b), has led to the purchase of specialist brands by mass-marketoperators. Sustainability issues in the travel industry are increasingly comingunder public scrutiny, attracting the attention of financial markets and becom-ing subject to increasing legislative requirements (Miller & Twining-Ward, 2005).For tour operators in particular, the management of supplier performance is es-pecially critical, since customers rarely differentiate between the activities of anoperator and its suppliers. In addition, in the European Union, the EU PackageTravel Directive places legal liability on tour operators for the performance oftheir suppliers. Furthermore, aspects of sustainability, such as environmentalmanagement are integral to health and safety management, and internationallegislation addresses socioeconomic concerns, such as setting core labour stan-dards. It is apparent, therefore, that sustainability is not to be seen as a ‘luxury’ oran ‘altruistic motive’, but a key issue in quality management, in which specialistand mass-market operators face diverse opportunities and challenges.

Sustainable Supply Chain Management Theory and ApplicationsSCM is the process through which a buyer works with their suppliers to ensure

that products and services are procured in ways that meet the buyer’s specifi-cations. It includes product design, planning, operations, logistics, delivery, aswell as payment and contractual procedures. It first focused on quality aspects,and later was broadened to include environmental issues in order to improveeco-efficiency and reduce waste, as part of the implementation of lean produc-tion systems. To do this, buyers began informing suppliers on how to be moreeco-efficient in order to control production costs. A number of scandals and pub-lic campaigns about food, timber and clothing sourcing have led internationalbrands to pay attention to the origin of their raw materials and productions sys-tems for reputation reasons. This has led to the development of SSCM as a fieldof practice. In tour operations, this brings environmental and socioeconomicconsiderations into supplier management processes, including considerationsrelating to energy and waste management, conservation of nature and heritage,

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preservation of cultural identity, respect for local communities and contributionto economic development in destinations (TOI, 2004). This is implemented notjust as a cost reduction strategy, but to also protect brand reputation and to ad-dress corporate social responsibility. Although there is a wide body of literatureconcerning the application of SSCM to manufacturing and electronics-basedindustries (see, for example, Handfield et al., 2005; Vachon & Klassen, 2006;Zsidisin & Siferd, 2001), it has not yet been considered in the tourism literature.

To date, specialist companies have treated sustainability as a quality-relatedissue and it has only recently been addressed more widely by the mass-marketsector. However, the indications are that this is changing. The engagement ofthese key market players, which collectively account for 65% of package holi-day sales in the UK (Mintel, 2005), could be very significant in terms of raisingawareness among consumers, and this in turn may instigate market demand forevidence of operator commitment to sustainability issues. Generally, specialistand mass operators have different potential for addressing SSCM due to theirsize and type of operations. The approach taken to SSCM is therefore, likely todiffer both across and within sectors, depending on individual business char-acteristics, and particularly on the nature of operator–supplier relationships interms of the relative formality and stability in purchasing and contracting de-cisions. These factors will influence the type of SSCM activity that companiesengage in, which can vary from informally discussing sustainability issues withsuppliers, through to more resource intensive activities, such as developingassessment procedures and guidance materials.

Currently, there is more evidence of good SSCM practice in relation to en-vironmental, rather than socioeconomic issues. For example, TUI ATG, LTUTouristik, My Travel Northern Europe and Hotelplan (four large European touroperators) have developed environmental manuals for suppliers and have car-ried out assessments, with an emphasis on water/waste/energy eco-savings(TOI, 2003) that can reduce costs to the supplier. By contrast, most socioeco-nomic performance measures have been perceived to potentially increase costs,to be more difficult to influence and assess, and some in the sector have arguedthat labour aspects of socioeconomic performance are, or should be, addressedthrough labour legislation (Font & Harris, 2004). However, it can be suggestedthat as industry associations develop and provide appropriate measurementcriteria in supplier assessment tools, increased attention will be given to socioe-conomic issues (see FTO, 2006b; TTF, 2005a, b). Supplier assessments currentlyfocus on accommodation and excursion/activity providers (see step 4 of theSSCM framework below), but they can be adapted to address a wider range ofsuppliers. The focus on accommodation and excursions/activities reflects boththe importance of these package components in purchasing decisions and also aperceived greater level of influence on these suppliers in comparison to sectors,such as transport, or suppliers further down the chain, such as food and craftproviders.

Three conditions are necessary for SSCM: long-term partnership, fair pricingand a consistent volume of operations (Font et al., forthcoming). Characteris-tics of the tour operating industry, such as high levels of price competition,fluctuating market demand, and a possible short-term outlook to business re-lationships, pose a considerable threat to engagement in SSCM. Mass-market

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operators are reported to operate on profit margins of only 2–3% (FTO, 2006a),and the resultant pressure on suppliers to reduce prices has already been shownto limit supplier capacity to invest in quality improvements (Bastakis et al., 2004;Buhalis, 2000). In consequence, the implementation of SSCM is challenged byfinancial, operational and human resource capacity limitations faced by tour op-erators, both internally and in supplier operations, and by price sensitivity in theconsumer market. It is therefore, likely that in the medium term at least, costs,facilities and service levels will be given priority over sustainability criteria inpurchasing decisions by tour operators. Furthermore, if significant investmentis to be made, the full implementation of SSCM requires the development oftrust between partners.

To promote SSCM, priority therefore needs to be given to establishing a robustbusiness case for investment in sustainability initiatives in both operator andsupplier businesses. This in turn requires greater engagement in sustainabilityinitiatives, so as to identify the business benefits. The development of practicalmanagement tools, such as the SSCM framework described here, can supportthis and drive forward industry practice. In parallel, there is also a need toraise awareness among consumers on both sustainability issues and on actionsthe industry is taking. A focus on added value through sustainability mea-sures in order to overcome the challenges of low-cost competition (especiallyin mass-market products) is essential. There is evidence of an increasing indus-try momentum in addressing sustainability issues and this is likely to gatherpace. This reflects a preference by the industry to address sustainability issuesin advance of any possible regulatory requirements (Mintel, 2005) and a recog-nition that common problems require shared solutions. Bringing such a diverseindustry under a shared sustainability agenda is not without challenge, but itoffers advantages at destination, business and consumer levels. In an industrythat is characterised by the importance of a good reputation and avoidance ofnegative publicity, it is reasonable to suggest that companies that proactivelydrive forward sustainability practices have most to gain.

MethodologyThe SSCM framework was developed in three phases: conceptual develop-

ment, stakeholder consultation and phased-pilot implementation. The concep-tual development is the result of rationalising the many layers of operators’ andassociations’ independent initiatives into a joint, agreed and shared process.The tour operator associations engaged in Travelife had undertaken variousinitiatives in the past, so members were at differing stages in addressing sus-tainability, and they represented diverse operators in terms of company sizeand product offerings. Therefore, agreement needed to be reached on both thecontent of the framework and the order in which the steps should be set out. Itwas also necessary to ensure that the framework could be feasibly followed byoperators and had global applicability.

The structure of this framework is based on the well-known Deming Cycle of‘plan-do-review’, which is used for the development of quality and environmen-tal management systems, and applied through ISO9001 and 14001 standards.Several tour operator associations had developed parallel systems since around

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the year 2000. The Association of Independent Tour Operators (AITO) in the UKand Forum Anders Reisen (FAR) in Germany prepared codes of conduct andmonitoring systems that focused mainly on actions rather than processes, whilethe TOI (see TOI, 2004) prepared a more generic system for all tour operatorslinked to performance indicators as part of the Global Reporting Initiative’ssustainability reporting guidelines (see GRI and TOI, 2002). At the same time,in the Netherlands, ANVR brought in a series of environmental requirementsthat focused on supplier actions and less on processes than is the case for TOI(see Van der Duim & Van Marwijk, 2006). By 2004, the FTO had translatedthe Dutch materials, introduced social aspects and proposed a process-based‘Integrated Responsible Tourism Programme’, and both the FTO and ANVRhad joined a partnership with two ministries of environment, two universitiesand two NGOs forming a consortium that was awarded EU funds for theTravelife project.

Consultation concerning the SSCM framework took place during meetingsbetween industry associations and key tour operators; these meetings are usedto plan, design and query the development of this initiative. Six months were dedicated to plan the framework, to audit over 40 tour operator practices, to testthe practical feasibility of the framework and to provide illustrative cases (seeSchwartz & Font, 2005). Documented outcomes were also proposed for each stepin order to monitor progress (see Table 1). Subsequently, a three-day meeting in 2005 was dedicated to test the ‘political feasibility’ of the framework. This wasattended by responsible tourism officers from large tour operators (four UK,one Dutch and one Belgian) and from two small tour operators (one Germanand one Dutch), as well as by the responsible tourism coordinators from FTO,ANVR, FAR and ABTO. Feedback was also provided by AITO.

This was a typical stakeholder consultation process with background docu-ments which compared different SSCM methodologies, both generic and thoseused in tour operating, and which provided recommendations for discussionbroken down into agenda items. The workshop participants agreed the elementsof the SSCM framework and proposed changes building on the background doc-uments, and these were then passed to the project consultants, who integratedthem into summary and operational versions of the SSCM framework. The mainchanges requested by workshops participants at this stage were that the SSCMframework should not directly require operators to implement prescribed stepsfor providing support to suppliers and providing incentives or to give preferen-tial contracting deals to sustainable suppliers. These changes primarily reflectedconcerns amongst operators regarding limitations in resource and purchasingcapacities, and their preference to provide a lowest common denominator thatall the associations could agree to. The rationale for this was that individualassociations could then promote higher standards (although, in practice, thishas not happened as of November 2007).

The implementation process can only be described as phased due to the needto coordinate actions between national tour operator associations that inevitablywork at differing paces, and because of changes in the staff that championedsustainability at association level in the Dutch and Italian associations. Addi-tionally, there were some struggles among several associations to gain mandatesto promote sustainability (the account by Van der Duim & Van Marwijk, 2006,

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Table 1 The implementation process as deliverable outcomes for monitoring

Supply chainmanagementframework

Small touroperatorsimplementation

Large and medium tour operators

Initialimplementation

Fullimplementation

Step 1. Engageyour business

Appointment of asustainabletourismrepresentative,create goals,promote dialogueon the issues

Appointment of asustainable tourismrepresentative andmanagement team,create goals,communicatebusiness benefits toemployees,directors andshareholders

Training for thesustainable tourismmanagement team,with this cascadeddown

Step 2. Create apolicy for SSCM

Written SSCMpolicy document

Written SSCMpolicy document

Refined SSCMpolicy document

Step 3. Integrateyour SSCM policyinto yourbusiness

Identification ofhow SSCMprocedures can beintegrated into jobroles

Review of job/rolespecifications, roleprofiles andworkingprocedures

Investment in asustainabilitymanagementsystem

Step 4. Conduct abaselineassessment ofsuppliers

Evidence of use ofassessment system(includinginformal systems)for suppliers

Use of formalassessment system(checklists, etc.) forsome suppliers/inselected pilotdestinations

Use of formalassessment system(checklists, etc.) forall suppliers

Step 5. Prepareand implementan action plan

Evidence of actionsto implement thecompany’s SSCMpolicy (includingrelevant internalmanagement, stafftraining andcustomercommunications)

Written action planwith clearlyidentified prioritiesfor implementationof the company’sSSCM policy(including relevantinternalmanagement, stafftraining andcustomercommunications)

Refined action planwith clearlyidentified prioritiesfor implementationof the company’sSSCM policy(including relevantinternalmanagement, stafftraining andcustomercommunications)

Step 6. Monitorand report onprogress made

Evidence ofmonitoring ofprogress(including use ofinformal systemsand feedback fromtour leaders, etc.)

Use of formalmonitoring system(checklists, etc.) forsome suppliers/inselected pilotdestinations

Use of formalmonitoring andreporting system(checklists, etc.) forall suppliers,combined withsome independentreview

Source: Adapted with permission from C© Richard Tapper, 2006

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is particularly illustrative). The three years of Travelife as an EU project havebeen a constant, but slow process of training staff in each tour operator to besustainability auditors, and developing a joint online database for shared sus-tainability assessments for suppliers, alongside an online training and reportingtool for tour operators. The phasing was also influenced by the requirements ofEU reporting dates and group periodic meetings.

The SSCM frameworkThe six steps of the SSCM framework form a cycle of continual improvement

based on setting policies, goals and objectives, assessing supplier performance,setting priorities for action and evaluating progress.

Step 1: Engage the business

The first step is to engage a management team in setting the SSCM goals, whichcan then be cascaded further down the company. Top management supportis built by presenting the business case, encouraging the open exchange ofideas, nurturing a new corporate culture based on the new ways of doingbusiness and instilling a sense of ownership in a SSCM strategy (Friedmanet al., 2000; Maxwell et al., 1997). It is recommended that a representative isappointed to act as the central coordinator for activities. This is already requiredby AITO, ANVR and FTO, but is generally a post with other responsibilitiesand with varying degrees of influence. In larger companies, it is recommendedto establish a team representing a cross section of departments (for example,contracting, marketing, product development, operations and sales) to ensurethat decision making is informed by inter-departmental operational proceduresand capacities. Internal awareness raising is a current priority for mass operatorsto nurture commitment and over the longer term, to provide training at all levelsof the organisation (Cramer, 2005).

In particular, it is critical that commitment is gained at director level in orderthat time and resources are made available to implement initiatives. However,achieving this requires robust evidence of the business case for sustainability. Al-though some specialist operators were established on sustainability principles,expertise and commitment varies, while their relatively informal managementstructures influence how sustainability is communicated to employees and cus-tomers. Trade associations play a key role in developing the knowledge andexpertise to implement sustainability initiatives and have the potential to be adriving force in engaging the industry and setting targets for sustainability per-formance. However, the vested interests of associations may act to limit the levelat which performance requirements are set (Clarke, 2004; Mowforth & Munt,2006).

Step 2: Create a policy for SSCM

Policy creation is an important step in formally outlining company valuesand providing strategic direction (Handfield et al., 2005; Herremans et al., 2005;Preuss, 2005). Effective and systematic SSCM practices start with clear policygoals and feed into a plan of action. Specific goals will differ according toindividual companies’ visions of sustainability, their size and related resources,

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the nature of their products and destinations, their prioritisation of impactsand their relative capacities to address impacts. Policies may therefore, includethe development of new products, working procedures, communication tools,or activities focused on managing environmental, socio-cultural or economicaspects of operations. AITO, FTO and ANVR require their members to producesuch policies, and all ANVR members must display them in their brochures andwebsite. This is positive, but to date, most of them lack committed statementsregarding SSCM.

It is important that the promotional opportunities associated with policies arenot confused with their primary function, which is to set out company goals anddirect the nature of their engagement in sustainability initiatives. Indeed, recentresearch into reporting practices of large international tour operators notes that‘tour operators are prepared to write about their efforts to make tourism moresustainable, but when it comes to specification of the initiatives, monitoring andcompliance, the industry remains vague at best, (Van Wijk & Persoon, 2006:392). It is also critical that they go beyond environmental criteria to addresssocioeconomic concerns (Kalisch, 2002). Over time, it is suggested that policiesshould be tied into monitoring systems in order to maximise their effectiveness(Sethi, 2002) and to address criticism of ‘green-washing’.

Step 3: Integrate SSCM into the business

SSCM requires a clear definition of job responsibilities across the company,along with associated new company procedures and training requirements. Forexample, contractors may be required to incorporate sustainability criteria intheir purchasing decisions, destination representatives to disseminate sustain-ability information to suppliers, marketing departments to promote sustainabil-ity initiatives and quality/health and safety departments to incorporate sustain-ability issues into supplier assessments. Smaller operators are likely to have lessdistinct departmental roles and formal job specifications, and to address trainingneeds informally. Conversely, mass-market operators have considerable oppor-tunity to integrate sustainability issues into existing management processes,such as health and safety, quality and training.

Travelife provides an online training and action planning tool for all staff(see Travelife, 2006a), while the FTO has commissioned the development ofprofessional qualifications in responsible tourism for staff. The implementationof SSCM may also require development of organisational programmes, suchas reward systems, communication tools and training programmes, in order tobuild employee awareness and commitment at all levels (Crane, 1997; Madsen& Ulhøi, 2001; McDonald & Nijhof, 1999). This can begin during staff recruit-ment, by employing individuals whose values match those of the company(Herremans et al., 2005). However, the overall potential of tour operators to ad-dress SSCM is also dependent on the financial and resource capacities of theirsuppliers’ for implementation of sustainability actions, and on the nature of theoperating conditions in destinations in terms of the infrastructure provision andregulatory conditions. It is therefore, critical that supplier capacities to invest insustainability are considered when establishing sustainability-related goals andactivities.

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Step 4: Conduct a baseline assessment of suppliers

An assessment of suppliers’ current sustainability performance is necessary inorder to design an action plan and also to measure progress over time (Prahinski& Benton, 2004). Due to the large number of suppliers in different destinations,assessments will often need to be phased-in, and to give priority to key impacts,destinations and product or supplier types. Accommodation and excursion providers are generally addressed first, in part because accommodation is thekey to all packages and because it is more tangible and easier to measure.Excursion providers prioritised so far, are wildlife and captive animal attractionsand marine recreation providers, due to both the obvious negative impacts onthe animals and habitats, and because they are emotive issues.

To conduct baseline assessments of suppliers, operators can either developinternal assessment systems or adopt those developed by trade associations. Forspecialist products that rely on natural environments and ‘authentic’ cultures,sustainability is sometimes considered as integral to informal operator–suppliercommunications on product management. However, more formal assessmentand monitoring systems can be useful tools for even the smallest businessesand could be approached on a selective basis (Tapper, 2001). A number of mass-market operators have begun to distribute assessments and codes of practiceto their suppliers, which they can self-complete online through the Travelifewebsite, and they are then verified by either a tour operator or external con-sultant (see Travelife, 2006b). Assessments are also being carried out by healthand safety auditing staff trained on sustainability assessments or by suitablyqualified third parties.

A benefit of this web-based tool is its electronic storage and feedback capa-bilities. This is also central to the funding of the programme, which is based onthe promotion of local suppliers. Suppliers receive automated feedback on theassessment results, along with links to local businesses, which can supply thematerials/services required to implement improvements. However, it remainsto be seen whether operators engage in more personalised feedback processeswith their suppliers. This is integral to assessment processes in order to buildcommitment, cooperation and understanding (Lamming & Hampson, 1996),but is likely to be challenged by the commercial pressures of the tour-operatingenvironment.

Step 5: Prepare and implement an SSCM programme and action plan

An SSCM programme of work sets out details on how to achieve the com-pany goals identified in the policy setting step (Step 2), based on the infor-mation drawn from supplier assessments conducted in Step 4. It is suggestedthat at least, one action is set for each part of the supply chain (i.e. accommo-dation, transport, excursions/activities, ground handlers/in-bound agents), inline with ANVR’s current practices (see Van der Duim & Van Marwijk, 2006).Specific tasks can then be assigned to implement these actions, such as devel-oping internal SSCM management processes, customer communications andfor working with suppliers. This might include raising awareness about sus-tainability issues, providing technical support on sustainability improvements,offering recognition to sustainability suppliers and/or integrating sustainabilitycriteria into suppliers’ contracts.

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Sustainability actions can be prioritised according to the characteristics ofboth operator and supplier businesses. For instance, specialists generally per-ceive a greater potential to influence the environmental performance of excur-sion/activity providers, since they represent a key part of the product, and tourleaders can play an active part in demonstrating environmental practices, suchas proper waste management and disposal. Accommodation is commonly a keyfocus for mass tourism operators, and the large-scale nature of many of theirsuppliers potentially helps with implementation of environmental and sustain-ability improvement actions. Taking into account that it is the supplier whomakes the investment for the improvements, a mix of actions is generally pro-moted, combining cost-saving actions (e.g. on water and/or energy efficiencyand on waste management) with actions on the environment and labour con-ditions that may require higher operating costs, or have longer or less obviousreturns on investment.

To implement sustainability actions, suppliers may need support and train-ing. Some large companies already provide this and industry associations anddestinations can provide additional support. For example, the FTO has runsustainability road shows for suppliers in Egypt, Turkey and Spain, explainingthe assessment process and the Travelife self-help tools. The Catalan Environ-mental Agency, which certifies environmental ecolabels, and which participatedas a partner in the Travelife together with the Catalan Tourist Board, have setthemselves the task of making Catalonia the destination with most Travelifelogos with UK and Dutch tour operators, as part of their ‘Catalonia is Quality’campaign. Provisions of incentives for suppliers who implement effective sus-tainability actions are also an important part of SSCM programmes. Travelifehas developed a sustainability classification system based on verified sustain-ability improvements and sustainability assessments. This features a bronze,silver or gold classification (with plans to introduce a further platinum grade).The operator ‘First Choice’ (now part of TUI Travel PLC) has featured accommo-dation suppliers which have received a classification in selected 2008 brochures,while other operators are also implementing this approach. This represents asignificant step forward in mass-market operators’ approaches to SSCM.

Step 6: Monitor and evaluate the SSCM programme and report onprogress made

Monitoring and evaluation through some type of reporting system is a vitalcomponent of SSCM, since it demonstrates to all the stakeholders how the pol-icy and programme of work is being implemented, the results produced andthe degree to which goals have been reached (Krause & Ellram, 1997). Thisenables reflection on progress in order to better understand the factors that as-sist or hinder implementation of sustainability actions, and to incorporate theseinto future business decisions (Carbone et al., 2005; Welsh & Herremans, 1998).Travelife’s central data management system for the supplier sustainability as-sessments (see Travelife, 2006b), coupled with each tour operators’ confidentialanalysis comparing bookings/yield/satisfaction of accommodation supplierswith different levels of sustainability performance, can also help operators toplan future SSCM actions. Mass-market operators commonly produce annualreports and reporting on sustainability activities can be integrated into these to

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communicate progress. It can be considered encouraging that one UK opera-tor has already produced a dedicated report on corporate social responsibilitypractices as part of its operational and financial review (First Choice, 2005, 2006).

Full reporting is only likely to develop over time, since it is a relativelyresource-intensive activity and companies are naturally wary of detailing activ-ities that may lead to public scrutiny (Hall, 2000). Furthermore, some specialistsmay continue to prefer more informal evaluations through internal dialoguebased on tour leader and/or customer feedback, and may not perceive a benefitin producing written reports. Van der Duim and Van Marwijk (2006) suggestthat it could be beneficial for associations to set up meetings for operators toverbally report on performance. Whatever the approach taken, monitoring andevaluation systems are an integral part of an SSCM for all types of tour oper-ators, and they can also provide a credible reporting system by which to gainreputational advantages from setting out SSCM achievements. Within the vari-ety of formal or informal approaches that monitoring and evaluation may take,the commonality is the identification of successes and of difficulties in orderto plan ongoing actions, and to raise stakeholder awareness of tour operators’engagement in addressing sustainability.

ConclusionEstablishment of an SSCM framework and supportive tools at European level

is a breakthrough for tour operations and has the potential to create a ‘rippleeffect’ to promote practical sustainability management throughout the sector.The provision of clear guidance on how to approach SSCM enables companiesgradually to implement actions from which expertise can be accrued throughpractical experience. Inevitably, many industrywide initiatives are slow to de-velop and are often driven initially by companies seeking to gain competitiveadvantage from ‘first player’ moves on issues, and also as attempts to avoidlegislation by adopting voluntary initiatives. Competitive advantage is highlydependent on market trends and consumer attitudes towards sustainability,and pressures for legislation vary. Therefore, the extent to which the frame-work will or will not be used, and the degree to which the changes broughtin due to this framework will contribute to a more sustainable supply chain,remain to be seen. Operators in specialist and mass-market sectors will progressat varying rates in their implementation of sustainability and this will also in-fluence consumers and overall market trends. Furthermore, companies do notbehave as homogeneous bodies, and while one department might introducesystems to measure and monitor sustainability, others may take actions thatundermine sustainable behaviour: internal integration and awareness raisingwithin companies, therefore, has a crucial role for implementation of SSCM.Having introduced a European-wide tool, developed with EU funding throughTravelife to assess and classify supplier sustainability, the challenge for tour op-erator associations is to continue with this and to use their resources to promotewidespread implementation of SSCM.

Any serious attempt by a tour operator to improve sustainability requiresimplementing an SSCM framework, for most sustainability impacts take placein the supply chain. Critics will say that SSCM outsources the cost of being

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sustainable to the supplier, which is true if tour operators do not address inparallel their responsibilities through more sustainable product design, betterinternal management, communicating responsibly to consumers or collaborat-ing with the destination (see Font & Cochrane, 2005a, b). Specialist and mass-market operators face differing SSCM opportunities and challenges, but theyshare the business benefits to be gained from wider recognition of developingmore sustainable products. For mass-market operators, global attention to cor-porate social responsibility provides a fundamental driver to address the issuescovered by SSCM, while specialist operators must maintain a differentiatedproduct (often through sustainability) that enables business success in a nichemarket.

For both groups of operators, SSCM is integral to product quality, and it hasthe potential to become a key selling point in an increasingly competitive andever changing market place. Indeed, recent months have witnessed further con-solidation in the industry through mergers between key mass-market players.It is the potential for added value that must be focused upon in developingevidence of the business case for operator engagement in sustainability. Currentoperator SSCM practices and the related outcomes must be further explored inorder to contribute to better understanding of how the industry can developto meet sustainability goals alongside financial and operational concerns. Toaddress these needs, the framework presented here can be effectively applied tosuch research, through offering a tool to chart industry progress. In this sense,the SSCM framework can be seen as both an industry landmark and a researchtool.

AcknowledgementsThe authors would like to thank Chris Thompson (FTO) and other Travelife

partners for their support. This project was possible through the kind financialcontribution from the EU LIFE Programme.

CorrespondenceAny correspondence should be directed to Xavier Font, International Centre

for Responsible Tourism, Leeds Metropolitan University, Leeds, LS1 3HE, UK([email protected]).

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