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Introduction
The Green Movement
The concept of going green is based on the process of altering approaches towards the consumption and utilization of resources to ensure a more environmentally friendly method of using and consuming resources (Boss, 2010). The basis behind this is the assumption that since the Earth is a closed off ecosystem with a finite amount of resources if nothing is done to conserve and ensure these resources stay replenishable in the long run there may come a time when the Earth will no longer be able to support human civilization (Boss, 2010).
Such an assumption is not without merit, as the human population continues to expand so too does the demand for resources increase. Unfortunately, resources that command the highest demand (wood, freshwater, and food) are only replenishable to a certain extent while others have a set amount (oil, gas, and certain chemicals) and cannot be replenished at all. Advocates of environmental conservation such as former U.S. vice president Al Gore continue to reiterate the need to change the current rate and method of consumption to better utilize resources to ensure that they will continue to remain there for future generations (Reynoso & Heusinger, 2010).
It must be noted though that the concept of going green is not a recent trend rather it has been going since the early 1970s through the creation of various recycling programs and centers (Griskevicius et al., 2010). Despite this, it has only been within the past decade that the concept of environmental conservation has entered into popular culture. Advocates such as Al Gore, Nichol Richie, Lance Bass, and various other pop culture icons were among the primary reasons why environmental conservation became popularized with younger generations today.
While going green through resource conservation is financially beneficial for most companies many attempts the change over to create an effective means of product positioning with the general public (Boss, 2010). Various studies have shown that due to the growing trend in environmental conservation many consumers would be willing to spend money on products that indicate that they were created through environmentally beneficial practices rather than products that do not have such a distinction (Beil, 2009).
This has given rise to the concept of corporate green washing where corporations indicate that their products were created through environmentally conservative methods but follow ordinary resource wasting procedures (Beil, 2009). Even with such disreputable practices currently being done enough industries do see the benefits that going green has for both their operational capacity and their ability to appeal to consumers and as a result, many choose to change their operational models to account for added environmentally beneficial practices (Cater and Lowman, 1994). It must be questioned though whether going green contributes to consumer patronage of a particular hotel chain or are customers influenced more by other factors about consumer behavior?
Literature Review
State of the hotel industry in Singapore
The 2008 financial crisis deeply affected various hotel chains around the world due to the sudden decline in consumer spending and international travel which was the primary source of revenue for various hotels since international guests made up the bulk of their clients. An examination of Singapores hotel industry at the time reveals that while the Singaporean economy suffered a significant financial blow due to its orientation as an exported oriented country its hotel industry did not suffer as significant a loss as compared to its other counterparts around the world.
It must be noted that the 2008/09 financial crisis primarily affected the U.S. and European markets due to the U.S. housing crisis and the subsequent sub-prime investment fallout however markets in South East Asia, primarily within the A.S.E.A.N (Association of South East Asian Nations) were not as deeply affected due to tight fiscal and monetary policies adopted by their central banks which did not invest heavily into U.S. sub-prime backed securities.
As it turns out the 2008/09 recession did not have as large an impact on arriving visitors into Singapore because Americans and Europeans only made up 18% of the visitor arrivals coming into the country. Visitors from ASEAN member countries make up almost half of Singapores visitor source markets as well as various South and southeast Asian nations.
As can be seen in the graph there was a definite drop in the number of visitors from countries deeply tied into the state of the U.S. economy. Countries such as China, Taiwan, South Korea, and India are locations for various outsourced U.S. production facilities; a sudden decline in U.S. consumer spending would have a definite backlash on their economies as well since the U.S. is their biggest customer.
On the other hand, there is a significant increase in the number of visitors from various ASEAN countries which shows how the financial crisis did not deeply affect the various economies in the region. While this graph does not represent the entirety of Singapores visitor base that their hotel industry relies upon, it is an accurate enough representation of the type of visitors that enter the country on a daily basis.
Research into the records of the Singapore department of statistics has resulted in the following graph on the 2009 market share of visitors going into the country. As can be seen, visitors from the U.S. and U.K. make up only 8.7% of the total amount of visitors going into the country with the lions share of visitors coming mostly from ASEAN countries, China, Hong Kong, India, and Australia. This might be due to the fact that Singapore acts as a financial center within the Asian region and deals primarily with Asian business interests.
This will prove to be an important factor to consider since the current environmental conservation movement has different impacts depending on the country in question. For example, the green movement is more prevalent in regions such as the U.S. and Europe as compared to countries in Asia such as India and China. While there is a benefit to going green the fact remains that guests from countries where the concept is fairly new and underused might result in survey results for this study showing a possibly negative outlook towards hotels going green due to the origins of the various consumers.
The situation of Hotels in Singapore
Every hotel has a different guest demographic that they are targeting, various hotel chains cater to different kinds of guest demographics, with some catering to guests seeking affordability while others cater to guests seeking luxury. The main difference lies in what the hotel in question is actually capable of doing, in terms of available resources, operational capacity, and type of services available. Hotel chains such as the Marriott, Hilton, and Shangri-la obviously have higher operational capacities and types of services available as such they cater to a higher class of consumers.
Other smaller hotel chains do not have the same level of operational capacity and types of service available as such they usually cater to consumer demographics that desire affordability and convenience over services and luxury. Such distinctions are important to take note of since how hotels attract customers is directly related to what their level of operations and services are capable of doing. In the case of Singapore, due to its relatively small total land area of 710.2 km2 and its highly developed market-based economy, the city district is more compact as compared to other countries which resulted in various hotel chains being located relatively close to one another.
Due to its distinction as a leading financial center, logistics hub, and port various major hotel chains such as Ascott International, Four Seasons, Hilton and Hyatt International have all set up various hotels within or near the central business district. This presents a rather unique competitive setup due to the fact that each hotel chain can be stated as offering roughly the same level of services, having the same level of operational capacity, and also having the same level of international distinction.
While such a setup is advantageous for consumers it is quite the opposite for the hotel chains present since attempts at price reductions, special offers or extra services can also be done by competitors with the same level of operational capacity and financial resources (Briassoulis and Straaten, 2000). It would be another matter if it was a major international hotel chain competing against smaller locally based hotels but in this situation, it is a case of international hotel chains competing against each other within a small confined location.
What must be understood is that, as a business, hotels try to achieve a certain level of profit in order to stay operational, as such in a situation where competition is high hotel chains concentrated within a certain area must find a way to distinguish themselves from their competition in a manner that is both profitable and results in a greater degree of guest patronage (Briassoulis and Straaten, 2000).
When examining the hotel industry in Singapore another factor that must be taken into consideration is the lasting effects the recent financial crisis will have on how hotels will continue to operate within the country. Even though the number of visitors coming into Singapore was not as heavily affected as compared to other regions the fact remains that there was a significant decrease in the number of people that visited the country which severely reduced the amount of income garnered by hotels from 2008 to 2009. An examination of the business expectations survey from the Singapore Department of Statistics reveals that during the height of the financial crisis the hotel industry was expected to sustain losses of up to -100% due to the lack of sustained international visitors into the country.
While this view may conflict with earlier statements indicating that the number of visitors coming into Singapore was not as heavily affected compared to other countries, this discrepancy can be explained by examining the earlier graph on the changes in the number of visitors coming into the country. As can be seen visitors from China, South Korea Taiwan, Japan, the U.S., U.K., India, and Hong Kong all displayed negative growth rates while visitors from Malaysia, Vietnam, the Philippines, Germany, and Australia all experienced positive growth.
What must be taken into consideration is the fact that many hotels within Singapore position themselves to target particular consumer groups; this is reflected in the type of services offered, operational capacities, type of guest relations, etc. Among the counties listed are China, Taiwan, Hong Kong, and South Korean, all of whom possess the type of clientele the various hotels in Singapore target (i.e. business men and rich tourists).
While there is nothing wrong with the type of service positioning that various hotels in the country are using the fact remains that the financial crisis has revealed an inherent weakness in this type of consumer positioning in that should another financial recession occur, hotels within Singapore will inevitably bear the brunt of this sudden lack of clientele. It must be noted that periods of growth and recession are actually cyclical and that while there may currently be a period of growth occurring there will inevitably be another recession on the way due to the nature of the financial system. Another factor that must be taken into consideration is the fact that the methods of operation of various hotel chains are considered wasteful and actually contribute to operational costs.
While this varies from hotel to hotel wasteful costs such as excessive water and electricity use as well as continuously replacing soap, shampoo, and sheets despite no inherent need actually drives up the cost of operations. Facility maintenance is actually one of the highest operational costs in the balance sheets of most hotels due to an apparent need to please guests which actually facilitates and even encourages wasteful practices that drive up the cost of operations.
Based on this wastefulness and the inevitability of a future recession affecting the number of visitors into Singapore, there is a definite need for various hotel chains within the country to shift to a more sustainable means of staying in business that will help reduce the cost of operations while at the saying time creating an effective means of product positioning that will help them a achieve a more diverse consumer base.
Wastefulness in the Hospitality Industry
Despite differences in their business culture, prices, and methods of operation all of the major international hotel chains within Singapore possess one thing in common and that is the ostentatious use of resources which results in wasteful spending. The reason behind this is simple, hotels want to attract guests through the feeling of luxury they perceive when they use the hotels facilities. This apparent luxury takes the form of resource wastefulness such as the overindulgent use of lighting, water, electricity as well as different types of food being shipped in through various international sources as well with items not meeting specific quality standards being thrown out.
While there is nothing wrong with maintaining high-quality standards at specific establishments there is a problem when such high standards promote an operational culture that encourages wastefulness. As indicated through interviews with various hotel staff members in randomly selected hotels in Singapore (who wish to remain anonymous due to the nature of their comments), wastefulness is actually an inherent part of a hotels S.O.P (standard operating procedure) wherein in order to maintain a certain level of facility quality areas are often times cleaned more than what is actually necessary.
While cleanliness is important to all living environments, cleaning a specific area that does not have a high concentration of guests several times within a given week using various cleansers, dusters and electronic washers make little sense for the hotel staff. Not only that lights are kept on nearly 24 hours a day 7 days a week in various hotel areas that do not have hotel guests or staff at all. Staff members have also observed that the hotel rarely puts up signs informing guests to conserve electricity or water and as a result, this culture of wastefulness has resulted in air conditioning units being left on despite no one using the room, water is allowed to run freely from faucets despite no apparent need to do so and bathroom products such as soaps, shampoos and conditioners are often replaced daily despite them not being used at all.
Other interviews conducted with staff from the hotel kitchen areas indicate a degree of wastefulness when it comes to the food being used in the hotel. It is often seen by the employees that the hotel administration often imports various ingredients rather than rely on locally produced products. While it may be true that certain types of ingredients can only be obtained through imports the fact is such products do not have an as long shelf life as compared to locally procured products that do not have to undergo lengthy shipping arrangements.
Another factor to consider is that in between the time of shipment and the arrival of the products in question there is the potential for the ingredients to inevitably expire on the way to the hotel. Since the policy of most hotels is to only use the highest quality ingredients this results in wastefully short shelf life for various hotel products. Not only are these practices a waste of resources but add to the costs of operations. If hotels in Singapore were to change their operational practices by going green not only would this reduce operational costs but it also has the chance of attracting environmentally consumers who prefer utilizing products and services that do not impact the environment negatively.
What does going green mean for a hotel?
For a hotel to adopt methods of environmental stewardship this means a radical change in the way it utilizes resources namely:
The reduction of hazardous products used in hotel maintenance
The heavy-duty cleansers hotel janitorial departments use are full of hazardous chemicals that, when released into the environment, cause various types of environmental pollution. This is further exacerbated by the fact that on average a single hotel uses thousands of gallons of cleansers within a single year (Gram-Hanssen, 2010). This problem is worsened by the fact that in areas where there is a greater concentration of hotels this means that the environmental impact is that much worse due to the possibility of greater concentrations of chemicals from the various hotels making their way into the surrounding environment (Cummings, 2009).
While there have been no conclusive studies on the possible environmental impact of the concentration of hotels in Singapore it can be assumed that with each of them utilizing thousands of gallons of heavy-duty cleansers the possibility of environmental contamination is pretty high. Another factor to consider is that at times the use of such cleaners is actually detrimental to the health of the janitorial staff that uses them on a daily basis.
Studies investigating the toxicity of chemical cleansers and solvents have shown that long term and continuous exposure to the chemicals found in todays cleansers can actually cause various respiratory ailments to surface as a result of the degree of exposure. Not only that, informal interviews with various international guests in various hotels reveal that some of them are actually mildly allergic to certain types of industrial cleansers and as such, they rarely go back to hotels that use such products on a daily basis.
An environmentally friendly alternative in such a case is to utilize biodegradable cleansers that are non-allergenic and do not cause respiratory ailments. Not only are such cleansers cheaper but they do not cause harm to the environment due to their chemical composition which becomes easily biodegradable (Cummings, 2009). They also contribute to the well-being of guests that stay at the hotel since the harsh chemicals used in industrial grade cleansers are not present in the environmentally friendly biodegradable types.
The use of more energy-efficient equipment such as lights, heating, air conditioning, and construction materials
Hotels, in general, can have rather large and expensive energy requirements; this can range from using a central cooling system as is the case in most hotels or individual air conditioning units in each room. No matter what the case may be, the fact of the matter is the constant use of such units over an extended period of time without some method of conservation can result in high operating costs due to the excessive use of electricity. In fact, interviews with various hotel guests in Singapore reveal that they consider the excessive use of electricity in various parts of the hotel as wasteful and unnecessary expenditure on the part of the hotel.
One recommended method in order to resolve such an issue has been the implementation of energy saving bulbs and air conditioning units that use a relatively lower level of electricity as compared to other similar unit types. Not only does this result in better long-term costs for the hotel but it also contributes to the concept of environmental stewardship. It must be noted though that the primary actor in hotels that causes wasteful energy expenditure is not the devices themselves but the operating style and procedure of the staff and upper management divisions of the hotel.
The standard operating procedure of most hotel chains directly contributes to the inherent wastefulness of electricity in most hotel chains. An examination of various S.O.Ps in the hospitality industry shows that at most, a large percentage of hotels fail to indicate in their S.O.Ps the need to conserve electricity and various other resources. This has resulted in a business culture of wastefulness where lights are left on, cooling units are left running despite it already being cold and Laundromats are run under inefficient operating conditions which increase the cost of operation.
Recycling of various waste products that come as a result of daily hotel operations
The inherent problem with waste disposal in most hotels is that they fail to consider the usefulness of recycling. An interview with the waste disposal staff of several hotels near the Singapore central business district indicates that on average the upper management of various hotel chains concentrates more on where to dispose of accumulated waste rather than how should waste be properly disposed of. Not only that, food accumulated from hotel buffets is regularly thrown away along with other types of products that fail to meet quality standards.
While it is understandable that hotels wish to have a certain degree of quality in their services the disposal of perfectly good food along with the indiscriminate disposal of perfectly recyclable materials shows a failure on the part of the Singaporean hotel industry to properly show a certain level of environmental stewardship. An examination of various waste disposal techniques utilized by other hotels around their world that have gone green shows that on average food that is still perfectly fine yet is about to be thrown away is regularly donated to various charitable institutions to be distributed among the needy.
Not only that these hotels implement certain levels of trash assortment bins for guests in their hotel rooms where guests can throw away their trash according to the designated labels on the garbage bins; recyclable material is often sent to recycling centers which result in less trash being thrown away by the hotel which winds up in landfills. As a result of these practices hotels that have gone green have been able to show that they care about the environment through positive environmental stewardship through proper waste disposal. This shows guests that they care about the environment and as such leave a positive image of the hotel in the mind of the guest which could result in future hotel patronage.
The use of energy-efficient vehicles in hotel operations
On occasion it is seen that various hotels often times employ vehicles in order to pick up important customers at the airport, such use of hotel resources is usually reserved for various wealthy clients and stars alike however most of them are gasoline or diesel-fueled cars. One of the latest innovations in the car industry has been the creation of hybrid cars that utilize both electricity and gasoline (Harris et al., 2002).
Such cars are far from fuel-efficient and utilize fewer resources as compared to various gas-guzzling vehicles (Deal, 2010). A simple switch to a fleet of hybrid cars would save hotels hundreds of thousands of dollars in fuel costs over the course of the cars operation. Other fuel-efficient cars that do not contribute to environmental waste have been the various cars developed that utilize unleaded gasoline (Deal, 2010).
Compared to regular gasoline powered or diesel powered cars unleaded cars actually last longer due to the corrosion from unleaded gasoline having less an effect on fuel lines compared to regular gasoline. Not only that pollution from engines that utilize unleaded gas is far less compared to that of regular gasoline power cars which as a result helps it to be more environmentally friendly as compared to other forms of transportation (Harris et al., 2002).
Conservation of water and other natural resources
On average a single hotel in Singapore can utilize 66,000 gallons of water or more within a single year. This does not include the resources wasted on throwing away less than ideal produce, fruits, and meats that do not adhere to a strict quality standard. An examination of hotel operations reveals that it is not unusual for hotel staff to note guests leaving taps running or seeing a cooling unit being left on even though there is no one in the room to use it (Kind, 2010).
The problem with the environment of luxury in most hotels lies with the fact that it results in a certain degree of resource carelessness on the part of hotel guests which causes them to adopt certain types of wasteful behaviors that they normally would not exhibit. Various studies examining the behavior of guests within hotels show a distinctive pattern of wastefulness, which, when asked about why they did such actions, the guests regularly responded by stating that they were merely getting what their money was worth by staying at the hotel in that they had a right to waste resources as need be (Kind, 2010).
The inherent problem with this situation is that it stems from the very culture of luxury and wastefulness that hotels are trying to portray to clients (Green & Devita, 1975). While there is nothing wrong with luxury itself the fact remains that the sheer amount of wastefulness of hotel guests when combined into a single year, results in a staggering amount of energy and water costs which results in increased operational costs for the hotel (Hall and Lew, 1998).
Some hotels have actually come with ingenious solutions to this dilemma, automatic water and electrical shut off sensors installed in hotel rooms help to decrease the overall level of wasted consumption (Green & Devita, 1975). Once a guest leaves a room these sensors trigger to turn off any non-essential electronic equipment in the room and the water sensors help to conserve water when no one is directly using it. As a result of such practices hotels that implemented the sensor system has been able to save themselves roughly $46,000 a year on operational expenses alone.
The goal of environmental stewardship is to minimize the overall impact that a businesss daily operations have on the natural environment (Griskevicius et al., 2010). On a daily basis, the hospitality industry in Singapore consumes thousands of gallons of water and hundreds of kilowatt-hours more so than any business outside of the manufacturing industry (Griskevicius et al., 2010).
Unfortunately, unlike the manufacturing industry, most of this expenditure is wasted on aspects of hotel operations (lighting, cooling, heating, etc.) that do not directly contribute to beneficial practices but rather are there so as to continue to create the image of luxury most major international hotel chains attempt to show. Under environmental stewardship, hotels attempt to improve how they utilize resources on a daily basis that minimize wastefulness and promote environmentally beneficial practices (Griskevicius et al., 2010). For a hotel to go green means a certain investment cost towards changing operational practices however such changes usually reap benefits beyond the initial cost that they entail (Hall and Lew, 1998).
Understanding Consumer Behavior
The process of segmentation, targeting, and positioning is a three-stage process used to determine what kind of consumers exist, what type of consumer the business is best off catering to, and finally optimizing the method of operations/services of the business in order to take advantage of that chosen segment and distinguish the business from its various competitors. As can be seen in the provided graph the process begins by identifying the different groups of consumers within a particular population set and identifying their various needs or preferences. In the case of this study, this takes the form of identifying the various groups of hotel patrons that come to Singapore on a daily basis (Herremans,2006).
The reason behind this is rather simple, just as consumers in the auto market have varied tastes i.e. some preferring speed to luxuries or roominess and safety over external appearance the hospitality industry also has various consumer segments that desire different things out of the various hotels i.e. comfort and luxury over price and affordability and vice versa (Herremans,2006). It must be understood that a business cannot be all things to all people since only a limited number of operational procedures can be implemented at any one time. As such businesses tend to specialize in meeting the needs of specific consumer groups due to the higher rate of profitability rather than a generalized approach towards company operations.
In the Singapore hospitality industry, for instance, prices vary between hotels and motels due to the fact that they cater to different kinds of consumer bases. Basically, marketing approaches utilizing market segmentation follow 3 distinct concepts namely: the undifferentiated strategy, the differentiated strategy, and the concentrated strategy. Under the concept of the undifferentiated strategy hotel guests (the consumers in question for this particular study) are categorized under a single demographic by the hotel industry (which is the company not attempting to satisfy any particular group but rather all groups in general).
For the hospitality industry, this can be seen in cases where hotels in a particular area are pretty standard with all competitors having the same methods of operation, prices, and offerings. With the concentrated strategy, hotels can be seen focusing on a particular guest demographic within the greater populace of visitors arriving into Singapore, this results in other potential consumers being allowed to be taken up by other hotels/competitors. This can be seen in cases where various airlines (i.e. Southwest Airlines) focus on consumers looking for cheaper ticket prices and are willing to go on flights without the customary in-flight meal and various other amenities.
In the case of the hospitality industry, this can be seen in the operational strategies of various motels who forego the segment of consumers looking for long term stays in favor of consumers that are looking to stay for either a few hours or one day (Henderson, 2004). Lastly, the differentiated strategy focuses on flexibility in the companys methods of operations employing both the undifferentiated and differentiated strategies.
This can be seen in operational strategies employed by various hotels today where rooms are priced differently according to the needs of the customer and their budget (i.e. budget rooms compared to luxury suites). In the case of hotels going green segmentation and targeting can be seen as playing an important role in identifying consumers within a given market and targeting which consumer to focus on (environmentally conscious travelers).
Concept of Product Positioning
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