- through ESG sustainability framework
Ghana undoubtedly is one of the major destinations for tourists travelling to West Africa. Ghana’s tourist industry is known to promote sustainable tourism that includes cultural tourism, heritage tourism, recreational tourism, adventure tourism, and events tourism. Whereas cultural tourism looks at festivals and events, heritage tourism focuses on the history of the slave routes. Recreational tourism allows tourists to explore beaches and parks; the adventure tourism space takes a look at rain forests and game parks; and the event tourism on resources and conferences.
Due to its multidisciplinary nature, tourism planning is a complex activity requiring an integrated approach, private and public sector partnership, inter‐agency and inter‐sectorial coordination, as well as community involvement. For most developing countries, comprehensive and systematic tourism planning is a new or recent phenomenon. In spite of this fact, available forecasts indicate that the industry has greater potential to grow bigger and bigger, and has all the bearings of a very profitable sector of Ghana’s already fast developing economy. However, the industry faces many challenges that, to resolve them would require pragmatic steps of policy directions from government and interventions from its key stakeholders.
Fortunately, the recent effort by government to deepen the tourism industry has resolved in granting its players access to funds to support this wholesome and more important agenda for tourism development in the country. Besides, the Ministry of Tourism, Arts and Culture is responsible for the development and promotion of tourism-related activities in Ghana. Its functions, among other things, seek to diversify and expand the tourism industry for economic gains, develop a competitive creative arts industry, promote culture throughout the development process, enhance Ghana’s international image and influence, promote Ghana’s political and economic interests abroad, and integrate the Ghanaian diaspora in national development process.
This notwithstanding, the sector is equally mandated to help mainstream tourism in district development plans; develop palace museums to preserve national culture, and thereby promote tourism in communities; institute measures to curtail emerging threats such as pandemics, and promote the establishment of tourism clubs in all educational institutions. These consolidated efforts are aimed at optimising the socio-economic growth of the country through the promulgation of tourism-related activities, and the promotion of environmental impact for the benefit of deprived communities with tourist sites in the country.
The tourism industry contributes greatly to the Ghanaian economy through such means as corporate tax, income tax, value added tax, national health insurance levies, customs/excise duties, property rates, property/asset fees, business registration fees, visa/work permits, airport service charges, and so on. The tourism sector, indeed, is an important contributor to Ghana’s economic development.
The critical issues for the future of travel & tourism in Ghana
Tourism, undoubtedly is considered an important driver of economic growth in Ghana, a major GDP contributor, and recipient of increasing levels of foreign investment each year. Available information indicates that the tourism industry is steadily growing in the country, and over the last decades, successive governments and corporations have all deepened their pledge and commitment to fighting climate change and building a more inclusive society for tourism development.
However, research has it that the need to strengthen awareness of the key issues affecting the sector and conducting a wide-range consultation of sustainability experts and stakeholders is critical. The identification and understanding across the travel & tour industry points to issues of maintaining sustainable destinations in a changing world, responsible business practices and leadership, shifting innovation drivers in travel & tourism, the evolving market and employment practices, environmental impacts, health and human rights and security issues.
Obviously, Ghana is considered a warm tropical climate region which experiences an all year round good weather. The country can boast of many varieties of wildlife, natural waterfalls all located in a thick forest areas of the country. Along the coastline too are beautiful scenery of lined up coconut trees, fine sandy beaches and ever-green forests, mountains and rivers. The concern is, why is the industry’s growth so slow?
Understanding Ghana’s tourism industry
Many individuals, corporate organisations, and government agencies are willing to support this industry and make it grow. The main hindrance to this is the fact that there is limited understanding of the tourism industry because a lot of people think that tourism is restricted to the main tourist sites they know. The beginning of tourism promotion is the understanding that all stakeholders including government agencies and the media should be prepared to invest a lot of time and resources in educating the general public about the various components of the tourism industry. Mass sensitisation about the history, culture and tradition of the great country and tourist sites will go a long way to make people understand and appreciate the resource deposit of the country.
Inadequate investment
There is absolutely no investor who will invest in an industry that has no previous track record of success or has no clear future. Every business person or entity will push money where they see viability or an opportunity for growth and development. To solve the problem of lack of investment, the industry must be made to look very attractive. We must advertise the beauty of this great country and maintain the already existing sites well. It is by this that potential investors would feel the need to provide aid and think of investments.
Degradation of the ecosystems and landscape:
Another challenge of the industry is traced to the direct contribution of travel & tourism and suppliers’ inability to deal with matters of degradation of the environment and its sensitive areas of tourism attraction such a nature reserves and coastal regions. The waste and pollution at resorts, hotel expansion damaging local habitats, unwholesome waste disposal practices and insufficient marine protection measures all cause damages to the ecosystem. Meanwhile, the risk to business is to maintain the quality of the destination as well as its reputation, and license to operate and manage a responsible supply chain, and being prepared to respond to regulation if operations are seen to be detrimental.
Safety and security preparedness and response
Most travellers consider the security of a country before choosing their holiday destination; and safety is always a key consideration. Security has remained a major challenge to the growth and development of the tourism sectors for many years. Security emergencies including terrorism, natural disasters and civil unrest disrupts tourism operations at destinations. Travel & tourism companies will need to have adequate procedures to respond to emergencies, including implementing procedures to coordinate with all levels of government law enforcement bodies.
The COVID-19 and its impact on the industry
COVID-19 Pandemic, as a global issue, has affected the tourism sector immensely. As a key sector for income to Ghana, the pandemic’s effect through the many regulations and restrictions limited the cases of tourists going on vacations and patronising tourist sites. This has resulted in the drop in revenue and other considerable benefits to the country. Poor risk management in the travel industry and travel of diseases with tourists to cross borders is still affecting the tourism sector, though.
Deconstructing ESG and its impact on the tourism industry
In today’s society, it has become essential to fulfill the requirements of corporate social responsibility concurrently with corporate social impact. There is a widespread consensus that companies that strive for sustainability create long-term corporate profits. Accordingly, the importance of Environment, Social, and Governance (ESG) operation and management performance is being increasingly emphasised in corporate evaluations.
Having said that, the rising attention given to Environmental, Social Impact and Governance (ESG) criteria within the corporate world is equally proving to investors that sustainable trends may, in fact, be profitable.
Indeed, ESG management strategies for the hospitality and tourism sector have become very important that it is imperative to address the issues related to the sector’s development through sustainability and ESG management framework. A call to focus on developing strategies to improve the sustainable management and business performance of the tourism companies and stakeholder organisations is critical and necessary.
The issue is, how can an industry so powerful continuously escape the urgency for social and environmental change? When will stakeholders lead the way and impose ESG reporting within major tourism and travel companies that can potentially lead the way to change? What is the way forward? The way forward is to remain sustainably compliant.
Environmental sustainability performance is one of the three pillars of ESG, measuring what companies consume, the waste it generates, the natural resources it uses, and the consequences for the ecosystems and habitats. In the social aspect, it heightens social awareness and the increasing need for bringing diversity and inclusion initiatives to the fore, not only in terms of ‘observable’ characteristics such as gender and race, but also ‘invisible’ factors including intellectual capabilities and mental health concerns. It assesses a company’s engagement with its workers, customers, suppliers, and the local community. It covers human rights, diversity and inclusion, health and safety, and community impact.
Traditionally, it emphasises how important it is that we care for the people who care for the customers. In this ‘people business’ of hospitality, human health and safety are of utmost importance. Achieving this can be as simple as consciously using natural, rather than chemical-based, materials and products to ultimately benefit both guests and employees.
Corporate governance is one of the three pillars of ESG. It assesses how a company uses policies and controls to inform business decisions, comply with the law, and meet obligations to stakeholders. Corporate governance failures (for example, aggressive tax avoidance, corruption, excessive executive pay, or relentless lobbying) cause reputational harm and loss of trust. Again, company ethics are perhaps the most fundamental aspect of governance as it talks about the company’s approach to all other factors.
The consideration that consumers only seek to purchase from brands whose values aligned with theirs means that a company must be able to demonstrate the ability that it adheres to its own ethical practices. As consumers continue their quest for authenticity and adventures, tourism companies must ensure that such ventures find the right balance between adhering to the company’s global vision and brand standards, while respecting local customs, regulations and their communities.
The future of sustainable tourism in Ghana
While there is potential for Ghana to become a major international destination for tourism, it will be necessary to build upon the current infrastructure to meet future demand. To improve the country’s capacity, it will be important to encourage greater levels of investment by stakeholders to build infrastructure and business facilities. It will also be important to invest in basic infrastructure of tourism sites and improve connectivity between the sites and major tourism destinations.
The cohesive solution for demonstrating Sustainable Success within the sector is quickly becoming a key component of success for all businesses globally. No longer are these practices considered optional, but are necessary to remain competitive in today’s market. Sustainability reporting within the Travel & Tourism has seen considerable uptake in recent years. Even though the case for sustainability reporting at an organisational level has not been addressed adequately among Travel & Tourism industry trade associations or groups, several initiatives do exist that cover components related to reporting such as common performance measurement, specific initiatives, guidance and commitments to environment exercise, and generally to products or services.
The fundamental premise of sustainability reporting is that information reported is relevant to the organisation’s stakeholders. And what is Sustainability Reporting? It speaks to identifying key material factors for accomplishing sustainability, policies, practices and performance requirements that can be developed to drive success. Once these factors are identified, targets can be determined, and a framework for monitor progress is constructed.
What are the Benefits for sustainability reporting?
It is important to note that, investors are increasingly incorporating material Environmental, Social and Governance (ESG) risks and opportunities into their investment decisions. Therefore, improving ESG reporting may assist a company in attracting additional investor interest. Moreover, sustainability drives financial performance and positions the company for competitive advantage. The table here speaks to some key benefits for adhering to sustainability reporting practices.
In summary, it must be reiterated that the momentum is on the side of the sustainability movement. Citizens, governments, regulators, and the media are turning the spotlight on corporations and demanding action. Companies in every sector, including travel & tourism, will need to make concerted efforts to improve their performance across all three ESG measures for sustainable growth and development. Companies in every sector, including travel & tourism, will need to make concerted efforts to improve their performance across all three ESG measures.
Frank is the CEO and Strategic Partner of AQUABEV Investment and Discovery Consulting Group.
Dr. Obuobi is the Lead Consultant on Cx. Leadership & SME; Country Chair, Ladies in Business; and Kwabena is the Director & Travel Consultant, DeRoyal Int’l Travel and Tour Ltd.
