Original publication: March 2018
Authors: Institute of Transport and Tourism, University of Central Lancashire: Richard Weston, Alex Grebenar, Mary Lawler
ECOTRANS: Herbert Hamele, Gordon Sillence, Martin Balas, Richard Denman, Antonio Pezzano, Karl Reiner
Short link to this post: http://bit.ly/2oRG31F
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Background

This study focusses on the current situation in the European Union (EU) regarding quality and sustainability labelling in tourism. The purpose of labelling in the tourism sector is to improve signalling, reduce transaction costs, achieve coordination of participants’ actions and avoid free riding opportunities generated by the incompleteness of the information. However, there is concern that the current volume and variety of labels has become a barrier to, rather than a facilitator of, consumer choice. Moreover, this situation may lead to lost opportunities to improve the competitiveness of the European tourism industry.

 

The aim of this study is to analyse the possibility of the introduction of an EU standard(s) for tourism services through the initiation of a harmonised EU certification system and to examine the potential for the establishment of a single European tourism label. To achieve this, the study has four key objectives:

  • to summarise the current situation with regard to tourism labelling in the EU,
  • to consider the possibility of coordination, reflecting on the costs and benefits of any action,
  • to assess the need for a single EU tourism label, whether it is attainable and likely to improve the competitiveness of the EU tourism sector, and
  • to recommend actions by the EU in promoting and supporting these, either through policy or directly.
Quality labelling

Quality labels are a well-established phenomenon within the tourism sector, particularly in hospitality, and they provide benchmarks for consumers purchasing decisions. Of the 28 EU Member States, only Finland does not have a nationally-accredited hotel quality label. However, desktop research for this study revealed that only eight of the Member States’ National Tourism Organisations (NTO) promote at least one or more quality label through their website and only 13 of 50 countries on the European continent.

There is currently no system for registering quality labelling schemes in Europe and so no clear estimate of the number in existence. The study of the Centre for European Policy Studies (Renda et al, 2012) estimated that there are up to 100 labels related to quality, covering a wide range of aspects such as hospitality, culture, recreation, hygiene, and other tourism services. However, there is considerable fragmentation and diversity in the criteria applied, principles, management and governance of the labels. Just as with other types of labels, quality labels are susceptible to market saturation and as such, consumers may find it difficult to distinguish more reputable labels from others. This suggests that there is a poor understanding of the relationship between label attributes and service quality.

Sustainability labelling

There is increasing pressure for the tourism industry to become more sustainable and the development of a variety of labels to inform consumers that organisations are attempting to reduce the negative impacts of their activities has been noted for around three decades. Although there is evidence that sustainability is not currently a key factor in travel choice or experience for most individuals, there is some indication that a label may influence tourist behaviour whilst on-site.

The communication of a label’s standards and the process of certification accurately, credibly and effectively to the market is a key factor in its success and represents a challenge to service providers. Achieving this is a challenge for the administration of sustainability labels, especially if they are a low priority for most tourists, as consumers may disregard the information presented.

As with quality labelling, the high number of labels is an issue in communication with tourists and it has been suggested that they should be reorganised into larger areas covered by a smaller number of labels. The main justification for this recommendation is that international tourists are unlikely to be as familiar with country specific labels as domestic visitors.

Overall, sustainability labels present several benefits (including reducing the negative impacts of tourism) and can lead to a harmonisation of stakeholder behaviour towards sustainable practice. However, there are still certain difficulties in implementing and monitoring these positive effects and setting the standards denoted by a label remains fraught.

Stakeholder consultation

Two surveys were undertaken as part of this study to gather opinions from key stakeholders across the European continent. The first was with key stakeholders such as national tourism associations, tour operator/travel agent associations, hotel/restaurant associations, NGOs and national/regional ministries. The second was with organisations issuing tourism labels, for both quality and sustainability.

There is broad agreement from both groups of respondents that labelling has two central benefits: (i) it is important for consumer confidence/information and (ii) it is an incentive to improve quality/sustainability. The majority in both groups are also receptive to some form of EU action to support tourism labelling. However, the degree to which they would like to see intervention in the market is less consistent, with the wider stakeholder group preferring a more comprehensive action whilst the labelling organisations have a greater preference for providing advice, assistance, networking, etc.

Although many recognise the conflict between some quality and sustainability criteria, there is support for a combined label, suggesting that this must be the longer-term goal if European tourism is to prosper. Whilst there is also support for the development of a European set of standards, many believe that this would be best achieved by adapting existing structures, such as the EU Ecolabel. However, the verification and certification process should be administered as locally as possible.

Case studies

This research presents ten case studies currently operating at global, European, and national levels. They have been chosen to reflect insights and best practices in relation to the development of a European label for tourism quality and sustainability. The purpose of the case studies was to highlight the successes and issues raised at the different levels of geographical coverage, as well as to demonstrate the different models of governance.

The analysis of the variety of labelling systems described in the case studies confirms that there are difficulties associated with the development and positioning of higher-level labels. It also proves that establishing a label can take time, but the support of national organisations can help to facilitate this. The use of flexible certification criteria also increases the number, type and size of business that can be included within a single label.

Conclusions
  • Tourism certification and labels should be seen in the context of supporting wider EU policy commitments.
  • Any EU initiative needs to reflect the complex and changing world of tourism quality and sustainability labels in Europe, for example, reflecting the growth of online ratings platforms.
  • Moreover, the creation of a separate EU standard or umbrella label could be seen as duplicative given the existence of ‘higher-level’ labelling systems and standards in tourism already, so a clear European ‘added-value’ would need to be identified.
  • European intervention is broadly welcomed but requires sensitive handling and should be directed towards providing support and coordination, as well as reliable and equivalent standards, rather than a new European tourism label. For example, the promotion of existing labelling systems, such Hotelstars Union and the EU Ecolabel.
  • Quality labels for tourism must reflect the reality of user-generated ratings through online reviews for example, while supporting other approaches where appropriate. This approach is necessary for tourism businesses to understand that the impact of traditional quality measures, such as customer complaint handling, can have in improving online ratings.
  • European level engagement in strengthening and coordinating tourism sustainability certification should build on established global standards and processes, such as Global Sustainable Tourism Criteria (GST-Criteria), to encourage participation in sustainable practice and support the achievement of sustainable development goals.
  • Opportunities to strengthen integration between quality and sustainability in tourism should be pursued where possible. It is perceived as a natural evolution by many existing schemes, who have elements of both criteria, and it could reduce the number of labels.
  • European level initiatives should recognise the need for certification schemes to foster local stakeholder participation and support. Greater participation will improve business performance in the sector and improve the overall competitiveness of EU tourism globally.
Recommendations

Although the study has revealed a level of support for EU action in tourism labelling, it is not unanimous. Therefore, the recommendations proposed below take a largely sequential approach that builds on existing capacity and structures to encourage the involvement of Member States, industry and other stakeholders in the actions.

Participation in tourism-labelling schemes should be voluntary and designed to encourage businesses to provide a product or service that is better than the minimum required by legislation. Given this, there is no necessity for new legislation or for the harmonisation of existing legislation. Indeed, such action may increase barriers to participation and may even discourage new participants in the industry.

The six recommendations of this study are:

  1. The European Commission (EC) could set up an initial meeting with leading quality and sustainability schemes/labels and stakeholders in the EU and establish an ongoing working group.
  2. The EC should enter negotiations with the Global Sustainable Tourism Council (GSTC) to establish a joint initiative to promote GSTC recognition of standards and accreditation of certification schemes, with European added-value.
  3. The European Parliament (EP) and EC should encourage national tourism agencies and industry bodies to work together to strengthen and coordinate existing tourism quality labels in the EU.
  4. Provide a promotional platform and a programme of on-going networking and support for quality and sustainability certification schemes and labels. This would probably be best supported by the EC Directorate-General Internal Market, Industry, Entrepreneurship and SMEs (DG-Growth), either directly or through the appointment of an external expert.
  5. Promote local-level initiatives, such as campaigns promoting quality and sustainability labelling and supporting businesses in gaining certification. As with recommendation 4, this should be supported by DG-Growth.
  6. EU institutions should require contracting of certified tourism businesses in EU procurement and project funding.

Link to the full study: http://bit.ly/617-461
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Study presentation: European Tourism Labelling – Research4Committees · September 11, 2018 at 12:47 pm

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