Tourism and the Environment: Navigating the Path to Sustainable Growth

by Grant Webster, Chief Executive, Tourism Holdings Limited

The tourism industry was certainly severely impacted commercially during the COVID-19 related international border closures. Was that period better for the environment? Undoubtedly. Were we going to see travel return and a bunch of people resume normal operations, at least to some degree? Of course. 

The question which seems to be more consuming today is what does that return really look like, are we in growth mode, degrowth, regenerative, or “normalisation”? Is there an ideal relative to the past? Where do we fit in the global picture? Is tourism the poster child for climate impact in Aotearoa New Zealand? This shouldn’t be a binary choice, achieving both needs to be the overarching objective.

Tourism and the environment are intrinsically linked. Climate change continues to wreak havoc around the world. Extreme weather events such as floods, wildfires and heatwaves leave us in no doubt of the challenge we face.

I think we are fortunate in the industry at the moment that we have had the Aotearoa Circles’ Tourism Adaptation plan, the Government’s Industry Transformation Plan (ITP draft environmental plan) and further strategic roadmap work that is underway by Tourism Industry Aotearoa. An abundance of thought leadership, ideation, and passion. It proves to me we are in an industry where there is a strong coalition of the willing. Willing to adapt, share and challenge the way the industry should operate. The speed and manner of change is, however, the real challenge.

However, I also believe we have the opportunity for growth.  Growth to restore economic wellbeing to the industry, growth which can lead to more full-time jobs to improve societal outcomes, growth in flight capacity to increase primary industry export capacity, and growth to enable investment in better outcomes. But increasing carbon emissions from increased flights and transport and footprints on the conservation estate increases risk. We started COVID-19 with 3.6 million international visitors to New Zealand in the year ending March 2020. In March 2022 that annual number was 2.2M. What is the right number?

I’m idealistic about the answer. I really hope that visitor numbers can be more than in 2020, but with the right, positive outcomes. Positive in the environmental, economic, and social impacts. A dream? Of course, but lots of sustainability initiatives are full of hope. The ideal for me is that people travel to New Zealand from wherever, stay for a good period, engage deeply, and learn. Experiencing the way things could be, should be and they not only learn but change their world view, having experienced the best of our country. And of course, throughout that experience actually operating in a positive, hopefully, regenerative manner. Would that mean New Zealand is being too altruistic, enabling people to visit, increasing air miles, but for a possible greater good? We need to be careful that in the process of becoming regenerative we don’t become xenophobic. We need to be clear about what needs to change, take the right steps, and leverage that coalition of the willing, alongside smart legislative reform.

Recently, when I asked an industry leader what they thought about how to tackle the incongruencies and challenges regarding sustainability, the first response was that it is truly a “wicked problem”. As such we need many bets, of a suitable size, at pace. We don’t know what the final large investments need to be, but we need to keep trying. Hydrogen, electric, biofuel …?

At thl we recognise that business, society, and the environment are part of an interconnected system and depend on one another to thrive. Over the last three years we have focused on embedding a science-based, systems-focused sustainability framework throughout our business using the Future-Fit Business Benchmark. The beauty we have found is that this approach provides vision, driving a mindset for change, engaging people positively, but then also provides a methodology, a pathway based on science-based objectives and processes. Engaging the brain and heart simultaneously in every message and action.thl is the world’s largest commercial RV rental company. With that position comes a responsibility. thl has committed to absolute reduction of Scope 1 and 2 greenhouse gas emissions of 50.4% by FY32 from a restated FY20 baseline, consistent with the aim of limiting global heating to 1.5ºC.  We are careful about the promises for Scope 3 as the greatest proportion of our carbon footprint - over 90% - is our fleet of motorhomes. We know that significant progress on our sustainability journey starts in manufacturing and production, particularly to transition away from ICE vehicles - our own wicked problem.

In 2017 we launched what we understand was the first eRV in the world. At that time, I was convinced by 2023 we would only have EV vehicles in our fleet. Today we are not much further ahead! We have explored other options, we have invested, but we are still behind. The issue is we operate in the light commercial vehicle category. We have a customer need for a range of well over 300kms per day (the European manufacturers of RVs think it needs to be >500kms). Yet the category is dominated by the demand for last mile delivery, where closer to 150kms per day will often suffice.  So, we continue to look to lead and only promise what we know we can do.  This year we will launch another first, an Electric Ford Campervan with a better range. We will continue to invest. We feel a responsibility to act, one that is also clear as a publicly listed entity.

In addition to climate risks and opportunities, we have completed an initial assessment of our nature-based risks and opportunities using the draft TNFD framework. A key aim of future-fit is to protect the health of ecosystems and communities; in FY24 we will be incorporating a greater consideration of our nature-related dependencies and impacts into our enterprise risk management framework and global sustainability programmes. 

We have also had a major merger in the last 12 months and the opportunity to expand our lessons into new countries and entities, bringing more people into the future-fit journey. Pre-merger every branch of thl had a future-fit Branch Action Plan with goals around: energy efficiency, water conservation, waste reduction and recycling, lowering emissions and community contribution. Operational emissions had reduced by over 20% in each country prior to the merger. We are currently on-boarding our new branches who have enthusiastically joined our future-fit journey. Post-merger our increased manufacturing operations will increase our operational emissions in FY24 (excludes emissions from use of our products). We do a lot but will continue to do more.

And why do all this? I have been so fortunate to have some amazing, challenging people around me in thl. One of the very early insights was watching the journey of Ray Anderson. A very well-known story. The compelling poem one of his team, Glenn Thomas wrote, Tomorrows Child is so impactful. If you haven’t read it, please take the 90 seconds it takes to do so. The sad fact is that poem was written in 1996.

We have the benefit in NZ of being young enough to learn, to have the concept of Mauri to guide us, to be small enough to make a difference as a collective. I will remain hopeful we deliver to the future we desire, over time, and enable people to come to experience us and our place, with the clear objective of “good” growth, but knowing that those visitors deliver better outcomes for our world as a result of their time in New Zealand.