Corporate Social Responsibility and Travel & Tourism-Some Hard Issues for the Industry and Some Opportunities for Ac

1. Corporate Social Responsibility and Travel & Tourism-Some Hard Issues for the Industry and Some Opportunities for Academia David M. Stipanuk Associate Professor School of Hotel Administration Cornell University Ithaca, NY 14850 Email: DMS20@cornell.edu BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

2. T&T CSR • Economic Dimensions • Social Dimensions • Environmental Aspects BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

3. T&T CSR-Economic Dimensions • Wages • Tipping • Immigration BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

4. T&T CSR-Economic Dimensions • Wages • Macro vs Micro Dimensions of CSR • T&T is World’s Largest Industry.... • T&T Provides Many Jobs & Economic Benefits • T&T Pays Rather Poorly (& has poor benefits) • Average US Restaurant & Hotel Employees Earn About 50% of US Average Wage • Tipping • Immigration BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

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6. T&T CSR-Economic Hard Issue • Is T&T built on a wage system that is sustainable and exhibits corporate social responsibility? BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

7. T&T CSR Opportunities for Academia • What would be the real impact on restaurant & hotel profitability of higher wages (with, we would expect, resulting lower turnover and reduced turnover related costs)? Researchers investigating the costs of turnover in hotels in 2000 estimated a cost of $1300 for room service waitstaff and up to $6,000 for front office associates[1]. BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

8. T&T CSR Opportunities for Academia • Can hospitality researchers not only document this “gap” in wages but also work with the industry to create methods to close the gap? • Are there industry innovators who have been able to develop methods to provide better wages, benefits and working conditions for their staff? Could these be the basis for teaching materials, case studies, research and models for the rest of the industry? BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

9. T&T CSR-Economic Dimensions • Wages • Tipping • Common Practice in US Fullservice Restaurants • Virtually No Tipping in Limited Service Restaurants • 15-20% of Total Bill in Fullservice Restaurants • Generally Paid Directly to Server • No Sales Tax Paid on Tips • Tipping Shifts Responsibility For All Tax Payments to Employee • Tip Reporting for Tax Purposes by Staff Questionable • Immigration BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

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11. T&T CSR Hard Issue • Does a wage system based on tipping exhibit corporate social responsibility? BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

12. T&T CSR Opportunities for Academia • How can operations shift from a tip based compensation system to one based on comparable wages for staff and what are the effects of doing this? • Are there case studies and analysis of operations that have shifted from a tip based payroll system to a base salary system & what can they tell us? BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

13. T&T CSR-Economic Dimensions • Wages • Tipping • Immigration • Current Hot Topic in US (and elsewhere) • US has large number of illegal immigrants • US T&T Argues It Needs Immigrant Workers Because US Workers Don’t Want to Work in Hospitality • Estimates are that 10% of restaurant & hotel workers are illegal immigrants & 25% of housekeepers and dishwashers are illegal immigrants BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

14. T&T CSR Hard Issues • Does an industry that has 10% (25%?) of employees in an illegal immigrant status exhibit corporate social responsibility? • Do the poor pay and benefits (and often poor working conditions) of T&T contribute to creating the “need” to hire immigrant workers? (“we need immigrants because US citizens won’t work in T&T jobs”) BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

15. T&T CSR Opportunities for Academia • What research opportunities exist regarding the economic aspects of the employment of legal and illegal immigrants in T&T? • What will the economic implications be for US T&T of the various proposed immigration bills? BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

16. T&T CSR-Social Dimensions • US Franchisors Requiring Hotel Franchisees to Sell Pornography • Negative Nationwide Media Over Porn Sales • Cable TV Services Required as Part of Franchise Agreements Will Not Unbundle Porn Sales & Franchisors Resist Efforts to Remove Porn • Hotel Housekeeping Staff Can Feel At Risk With Porn Playing in Rooms • Immigrant Employment in T&T and Impacts on Local Communities BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

17. T&T CSR Hard Issues • Does requiring franchisees to sell pornography exhibit corporate social responsibility? • (Does the sale of pornography exhibit corporate social responsibility?) BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

18. T&T CSR Hard Issues • Requiring Hotel Franchisees to Sell Pornography • Immigrant Employment in T&T and Impacts on Local Communities • T&T CSR expresses concern regarding impact of tourists on local communities • What about the impact of large numbers of immigrants employed in tourism on local communities? • How does the employment of large numbers of immigrants fit with the goals that T&T employ “local people”? • How much “leakage” of the revenue from T&T leaves the US as a result of immigrant employment? • What are the impacts on local community quality of life of the employment of large numbers of legal and illegal immigrants in T&T? BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

19. T&T CSR Opportunities for Academia • Hospitality researchers might find it useful to investigate issues such as employee satisfaction at operations that eliminate the sale of pornography and the effect (if any) on the profitability of these hotels as a result of this elimination. • With a focus on immigration & tourism, how many of the sustainability issues discussed relative to locations outside the US can or should be applied to US T&T within our own borders? (employment of local people, leakage, multiplier effect, etc.) BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

20. T&T CSR-Environmental Dimensions • Lack of “Green Design” in Newly Constructed US Lodging Facilities • Lack of true measurement of environmental impacts, prioritization of actions and meaningful benchmarks • The sustainability of an industry based on fossil fuel based travel BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

21. T&T CSR-Environmental Dimensions • Lack of “Green Design” in Newly Constructed US Lodging Facilities • 150,000 new rooms built in US this year • New rooms follow code (usually) but generally ignore dimensions of green design • New industry practices implemented without consideration of environmental (or employee) impacts • Lack of true measurement of environmental impacts, prioritization of actions and meaningful benchmarks • The sustainability of an industry based on fossil fuel fired travel BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

22. T&T CSR-Environmental Dimensions • Lack of “Green Design” in Newly Constructed Lodging Facilities • Lack of true measurement of environmental impacts, prioritization of actions and meaningful benchmarks • Lots of lists of “green” actions but little prioritization of these based on impacts & little measurement • US Lodging industry largely ignores US EPA hotel benchmarking, ISO 14001 and GG 21 • The sustainability of an industry based on fossil fuel fired travel BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

23. T&T CSR Hard Issues • Does largely ignoring green design practices in specifications and new construction illustrate environmental CSR? • Does non-participation in major global environmental certification programs such as ISO 14001 and GG 21 illustrate environmental CSR? BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

24. T&T CSR-Environmental Dimensions • Lack of “Green Design” in Newly Constructed Lodging Facilities • Lack of true measurement of environmental impacts, prioritization of actions and meaningful benchmarks • The sustainability of an industry based on fossil fuel fired travel • T&T industry growth requires large growth in air & other travel • Air travel is solely fossil fuel based • Fossil fuel for international airline travel does not fall under Kyoto type accounting or regulation • A very large portion of the energy related environmental impact of T&T is in travel yet much of the T&T environmental discussion deals with hotel & other land based environmental issues/impacts BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

25. T&T Hard Issues & Academic Opportunities • What is the future of an industry whose continued growth and expansion is heavily dependent on petroleum based international air travel for its future growth? • How can the environmental impacts of air travel be better integrated into research and analysis of T&T and issues of CSR? • Are various carbon offset and carbon trading programs potentially of real value to T&T and to the environmental dimension of CSR? • Can T&T researchers help shed light on these issues for the industry and for consumers? BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

26. Business Ethics Magazine Just Released Their List of 100 Best Corporate Citizens in the US (only publicly traded companies) • No Lodging Companies On This List • 3 Restaurant Companies Listed • Green Mountain Coffee (#1), Starbucks (#17), Darden (#66) • 1 Airline Listed • Southwest (#25) • No Other Firm From T&T Listed • http://www.business-ethics.com/media/Chart%20of%20100%20Best%20Corp%20Citizens%20for%202006.pdf BEST 2006-Girona Spain-CSR & T&T-Hard Issues & Academic Opportunities

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