Is there enough sustainable accommodation supply to empower the European traveller?

Written by Kees-Jan Boonen , Head of Policy at Travalyst

Now that both the European Parliament and the Council of Europe have formed their positions on the European Commission's Green Claims Proposal (GCD), it is a good moment to reflect on the GCD′s potential impact on the travel and tourism industry. Is the industry ready and will the proposed legislation have the expected positive impact??

As a quick reminder, when the European Commission published its proposal the objectives were to:?

1. Ensure that consumers are empowered to make better informed choices and play an active role in the ecological transition:

Tackle false environmental claims by ensuring that buyers receive reliable, comparable and verifiable information to enable them to make more sustainable decisions and to reduce the risk of ‘greenwashing’.?

1. Boost green markets in the EU by breaking down the barriers to consumer empowerment.?

Address the lack of transparency and trust of environmental claims, and the proliferation of misleading commercial practices.

When provided with credible sustainability information, consumers (i.e. travellers) are expected to be an accelerator for sustainable investments by the supply side e.g. hotels, short-term rentals etc. The potential business case is clear: demonstrating sustainability information offers travellers the opportunity to book more sustainable accommodations, leading to higher occupancy, which boosts funds for accommodations to invest in an even more sustainable stay.?

However, accommodating travellers′ demand for more sustainable accommodation will depend on:??

1. How does the GCD define a sustainable stay?
2. How easy is it for travellers to find and identify a sustainable stay, and ultimately,?
3. Is the industry ready to meet the incoming GCD criteria and offer sustainable accommodation supply?

Defining a sustainable stay?

Importantly, the GCD will provide the much needed regulatory clarity on how to define a more sustainable choice of product or service. The following criteria should ensure companies have robust evidence to claim and communicate a stay to be more sustainable:??

• Science-based: any evidence such as metrics and data, used to demonstrate sustainability must be based on compliant methodologies that are science-based and peer reviewed.
• Transparency: data sources, methodologies used to analyse the data, and the limitations and assumptions made when calculating impact needs to be transparently shared.?
• Accuracy and reliability: data collected needs to be validated and verified, and the impact calculation needs to be based on established methodologies.
• Relevance: any claims and communications made need to address the most significant areas following a materiality assessment.?
• Completeness: evidence should be based upon all the phases of performance and use of product, service or activities. In other words, evidence should be based on a life cycle assessment (LCA).
• Comparability: evidence is required to be presented in such a manner that it is comparable over time and between entities, resulting in harmonised benchmarking and metrics.?
• Verifiability: verification of the data collected, as well as the methodology used, is crucial and to be undertaken by third party auditing. Third party certifications are additional tools that may be used by companies to ensure that they produce robust evidence to substantiate their sustainability claims (to consumers or while reporting).

While defining sustainability solves an important part of the puzzle to empower consumers to make informed choices, the next key question is how many of the 620,000 EU tourist accommodation establishments will meet the GCD criteria to be able to make a green claim? The traveller demand is clear: 75% of travellers say they want to travel more sustainably according to research by Booking.com . And whilst we acknowledge that there is a say/do gap, we have to ask ourselves whether there is enough identifiable accommodation to allow consumers to book a more sustainable stay.

Is there enough identifiable sustainable supply??

The short answer: unlikely. Only accommodations that have an officially approved third party certification recognized by a National Authority and/or claims compliant with the GCD criteria will be meeting the sustainability supply definition. Booking.com has 16,000 certified accommodations on its platform. In terms of volume, this is fairly low (even acknowledging that not all 620,000 EU accommodation establishments are on the Booking.com platform). Relying solely on third party certification means that we reduce the ability for the consumer to identify a more sustainable option.

It's true that the industry has two and a half years to get ready for the transition. But fast forward to 2027 when the GCD enters into force and the sustainable supply challenge in the accommodation sector is likely to remain. Accommodations will have two options to claim that they are more sustainable:

1. Approved third party certifications for which they will have to show robustness following the above-mentioned GCD criteria and potentially based on the Product Environmental Footprint Category Rules (PEFCR).?
2. Using an EU Approved PEFCR, in lieu of a Life-Cycle Assessment (LCA), would then gain automatic validation .??????

Given the strict (and costly) GCD criteria outlined above, it is estimated that less than 50% of third party certification bodies will survive post 2027 which will further minimise sustainable supply. The PEFCR has been successful in other industries and deserves the support of the travel and tourism sector however 2027 is a highly aggressive deadline for such a complex process in an already fragmented industry. The success of the PECFR for hotel accommodations will be highly dependent on cross-sector collaboration.?

In addition to an ambitious timeline, the PEFCR is limited in scope: hotels only. There will be a need for other accommodation types, short-term rentals for example, to establish robust evidence to make green claims to add to the volume of sustainable supply. Moreover - as the name suggests - the key focus will be on the E in ESG. Social sustainability factors that need urgent attention remain unaddressed under the PEFCR. This raises another important question: how can hotels and other accommodation providers make social claims, something that is increasingly important for travellers when making a more conscious decision???

Next steps?

First and foremost, the key to a successful green transition lies within the industry itself. The accommodation industry, while coming out of an existential covid crisis, has shown strong determination to embrace the green transition: from the supply side, to intermediaries, to travellers seeking more sustainable options.? However there is a long way to go and recent headlines lead to concerns that the industry is at risk of losing its licence to operate.

Travalyst is fully committed to aligning the travel industry behind clear, consistent and credible sustainability information - it’s something we have advocated for since day one. We are already aligning our work with developments in Europe: we are reviewing sustainability certifications for accommodation providers inline with the GCD guidance. However, while we fully support the objectives of the GCD, we believe closer collaboration between EU institutions and the broader industry is needed to achieve the objectives in a workable and scalable way. By coming together as an industry we can accelerate access to sustainability information and drive forward the green transition.?

As a start, Travalyst looks forward to contributing to the first PEFCR Public Consultation due in September this year. The consultation will be the first opportunity for the wider industry to assess the impact this process will have. Looking beyond 2027, once the PEFCR is established, we look forward to aligning on how PEFCR based sustainability data will be communicated to travellers in an easy-to-understand and scalable way. The ultimate proof of success is not only calculating the CO2 emissions, but establishing a demonstrable shift in consumer behaviour to choose a more sustainable stay.