Travel Greenwashing and the Fear of Death

The ESG Spot

TL/DR

  • The COVID hysteria had (and keeps having) an impact on the travel industry comparable to an all-out war of the same duration.

  • Weak and underfunded travel companies have flopped (only airlines have been put on life support), but the survivors are adding a new tool to their competitive armour – blatant greenwashing disguised as noble sustainability.

  • What’s worse, the fear of death is being repackaged as a deliberate choice of “green” products.

Curious? Welcome to the club. (And I’m working hard on making less comments in brackets like this one, which I think are needed for the context. My kids think otherwise.)

The COVID Hysteria

Last April (2020) I made a public prediction that 1 month of lockdowns will require 3 months of recovery. 13 months later I can’t help but pat myself on the back as my dire prediction ended up being quite optimistic, really. The carnage of the travel industry (think of business travel, which will never recover; decimated corner travel shops like Flight Centre in Australia – they’re not our clients so I can mention them by name, and other unfortunate roadkill - thanks to Steve Hafner for introducing this wonderful word into my vocabulary) can’t possibly be estimated in dollar terms, less so in derailed careers. Even the best companies (except for one – Aviasales) have let sizeable percentages of their employees go until the fortunes turn. Well, many companies live by the principle preached in the US business schools: fire fast, hire slow; if the management doesn’t cut the workforce, the Boards would be all too happy to cut the management. But OK, this is a topic for a different sort of discussion.

So, we as travel companies have a bunch of zombified consumers (thanks to the mass hysterical media’s constant selling of fear) who need to be convinced to travel again. Re-read this sentence again: you’ve spent countless millions of dollars building your travel brand, catering to the existing demands and innovating to create new demand and facilitating frictionless travel purchase experience – and for the whole 2020 you hadn’t been able to advertise and inspire travel, because … safety, of course. Anyone promoting travel in 2020 would see their rear ends brought to them on a plate by the very consumers who swore loyalty to them months earlier. In simple terms, imagine marrying someone, living happily for 10 years and then your partner and the love of your life develops amnesia – and you have to win them all over. (And you’re not that young and energetic witty person you used to be in the previous life.)

Welcome to 2021, the year when public travel companies’ valuations are higher than in 2019, while these companies’ sales are barely 50% of the 2019 levels. I haven’t been able to pull that bunny out of a hat at the detriment of our company’s valuation, of course (maybe I’m too honest for that), but putting up a good show for investors promising them that the world will be a more favourable place for travel companies than it was in the good old 2019 (when the grass was the greenest and the people the happiest) requires some unimaginable assumptions in the forecasts. And here we have an intellectual + investment dilemma: it’s quite obvious that:

  • it will take travel years to recover

  • the consumers’ PTSD is not going away that easily (if ever)

  • travel is becoming a premium product again rather than staple

  • most ML (machine learning) models can be thrown away because of the prolonged series of unpredictable customer behaviour signals tainting the data sets

  • consumer preferences are increasingly being shaped by the Murdoch empire and less by travel firms.

What would a diligent corporate manager do? Kill two birds with one stone, of course. Let’s fight the COVID hysteria with greenwashing!

Greenwashing to the Rescue

If you haven’t read my guide to greenwashing in travel, I suggest you to do it now, because it is a good reflection of my thoughts about the avalanche of bullshit consumers and industry partners have to face every day.

I am well aware of a couple of experiments in the travel industry (can’t name names, I’m friendly with these companies and their heads, but don’t think that questioning some of their activities amounts to backstabbing. These companies will recognise themselves, and their managers have my mobile phone number handy). In addition to the greenwashing techniques from the previous guide I want to offer you some higher-level word acrobatics.

Hotels

What would happen if you started marking hotels as eco-friendly in your search results? Would that make consumers choose “environmentally conscious” more often and tried-and-true simple hotel rooms because … nature, Greta and net zero by 2030?

Well, what I’m about to say next is very country- and culture-dependent. However (and quite inconveniently), it’s also very money dependent. This simply means that people vote with their wallets and the observed (vs stated AKA announced and – god forbid - expected) behavioural patterns are driven by the money matters (e.g. cost savings) rather than the green future for all. Nevertheless, I’ll continue nagging you: consumers choose “normal” hotels much more frequently than the properties with artificially inflated “goodness” scores. Why? I will now depart my area of accommodation expertise (of which I have none compared to the industry pros), but will use my 20 years of experience in consumer behaviour analysis:

  • Green / sustainable / eco has always (probably until the current period of mass madness) been associated with higher costs (fair enough, if you disallow your property to use the latest processes and approaches, this will hit your bottom line, unless you pass on this inefficiency charge to your guests) and lower comfort level (it’s cute having palm leaves for plates for 24 hours, but if you’re staying for a week, this becomes kind of annoying).

  • The property’s stated focus on “green” attracts quite the wrong people to work for it. (the next sentence is ironical to some degree) You end up with a bunch of indoctrinated self-righteous millennials who care about the cause more than the customer. You definitely don’t want the customer to have this perception up front, but what’s worse – you don’t want the customer to develop this perception while already in your property.

Flights

Let’s get to my second favourite punching bag – the killing of the planet by flying. There are lots of misconceptions and stated personal choices, let’s not argue with those. My point is very straightforward: most people don’t care if their emissions are not being offset if they have to pay for doing so (which is very common in aviation). Let’s look at this creative logic surrounding the annoying fact that aviation is here to stay:

  • People are increasingly choosing direct flights to reduce their carbon footprint”. (I’ll give you 30 seconds to stop chuckling.) It is NOT a straw man argument, to my great sorrow. This is a pickup line from a couple of flight companies’ sustainability reports (which they have volunteered to produce in order to play the ESG game). Guess what? Thanks to COVID many people are indeed choosing the more expensive direct flights (vs cheaper and longer connecting flights) NOT because they care about CO2, but rather because they’ve been led to believe that other people pose a threat to them, hence any stopover increases their chance of contracting COVID from other transiting passengers and immediately dying a terrible death (while infecting the entire family, which will effectively end their blood line). I hope you find the previous long sentence idiotic, otherwise I’ve got bad news for you.

  • Going off the beaten path” (I’ve mentioned it before, but here’s a new argument). Airlines are incredibly smart (even the ones that stopped taking my calls – you still have a place in my heart) and are almost as good at counting money as MindGeek. And if they’re launching new destinations (i.e. the ones that are not mainstream), don’t be fooled: it’s NOT because they want tourists to discover new places. It’s because these destinations are subsidising these flights and the airport costs are low. One can use any sort of spin, but money rules. (And that’s why I actually love capitalism because it’s mostly predictable.)

Experiences

  • In addition to my guide to greenwashing, let’s accept the fact that experiences are now being reformatted in a way that there are fewer people enjoying certain tours and activities at the same time. The reason, of course, is the need for the physical distancing of people (I hate the term “social distancing” because it means something else).

  • If a certain experience could have 20 people participating at the same time, and now the limit is 6 (and also if half of these 6 see others as a life treat), Economics 101 tells us that either the quality of the experience has to become even less bearable (which in most cases is not possible since all “optimisations” had already taken place before 2020), or there has to be a price premium. Justifying this price premium takes a fair degree of mental gymnastics, so let’s all hail Greta (see the next chapter).

  • The temporary rise of food delivery and takeaways vs dining in is obviously driven by the people’s fear of each other (be it existential or government-mandated).

Greenwashing Your Way Out

You have probably figured out my line of thought here: COVID has actually been an unexpected blessing for mature travel companies, but not because it’s funny watching people die (I worked in a morgue for 1 year, and no, it’s not), but rather because it has reset most of the competitive advantage other than the market share (Aviasales has doubled its market share in 2020, by the way), so many would-be disrupters have floated belly-up or mummified themselves in the endless hope for the change in market conditions. We’ve seen examples of travel companies selling sanitisers or wine or even outsourcing their call centres.

But wait, we have forgotten about resourceful product managers (who are kind of CEOs of their products – 100% sexy and 0% responsibility). What would you invest in if you had your team cut 20%, your budget cut 50% and your targets remaining the same? PR, of course. The greenwashing kind of it, to be specific.

You’ve seen before that the vast majority of the ESG (and predominantly the E/ESG component) initiatives of travel companies are a spin on either existing activities or a token gesture. It is incredibly hard to stay newsworthy when the market is down, but it’s even harder for an executive team to demonstrate to investors some practical steps aimed at the company’s long-term survival. And, probably unfortunately, “sustainability” (meaning E/ESG to most people and investors) has become the sole floating jacket for companies that are totally market-dependent but are trying to maintain the poker face.

And this is one of the reasons why we are bombarded with these useless (sponsored, of course) research papers “proving” the existence of a mix of these two carefully manipulated statements:

  • Customers are dying to save a planet and demand eco-sustainable travel options; and

  • Travel companies have been prescient in anticipating the broader society’s demand for such options and have invested in supporting them. (This usually means sticking a pointless badge or adding one more information line into the search results page, which still gives companies bragging rights.)

Am I trying to make a point here? You’ll be surprised, but I don’t care. I only care about being honest with myself first, my colleagues and investors second. And under no circumstances one must think of customers as idiots. Sadly, this COVID-induced greenwashing bonanza has revealed questionable values of previously respected companies. I do believe that hope is not lost for the product managers who have to resort to such unfaithful techniques. If you’re one of them and need atonement – please drop me a line at max@kraynov.com