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Copyright 1999-2007
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HARNESSING TRAVEL AND TOURISM
AS A LEADING FORCE FOR POVERTY REDUCTION

Plenary

Richard North
Six Continents Hotels

Panel Remarks

Your Royal Highness
Excellencies
Ladies and Gentlemen

The performance of Balinese dance last night in the centre of Europe is a rare event. It would be unknown without tourism and the growth in travel that has taken place in the last half century. InterContinental Hotels were established just over 55 years ago. We operate more than 3,300 hotels across almost 100 countries. Travel & Tourism today forms one of the key economic sectors in the world, and the fastest growing with 4.5 per cent growth forecast per annum for the next ten years.

Travel & Tourism activity also generates over 10% of total global GDP.

The world Travel & Tourism economy generates more than 200 million jobs, and it is the potential of the tourism industry to create jobs that gives it strategic significance in any policy drive to engage local people in economic development and the reduction of poverty.

Although we have experienced a spectacular growth in travel and tourism in the last half-century, poverty, hunger, disease and illiteracy are still prevalent in many parts of the world. I believe passionately that in this day and age no one should suffer from these most basic deprivations in any country - and speaking on behalf of my colleagues in Travel and Tourism, I believe that we have a unique opportunity to help encourage prosperity and peace.

Travel & Tourism as a sector has certain inherent characteristics which mean that when peace and security permit the operation of stable economic markets, then it can help reduce global poverty by unlocking opportunities for the people directly affected. We need to remember that in some countries with high levels of poverty, (like Namibia for example) tourism is significant or growing.

The Travel & Tourism industry welcomes this growth but it must also be keenly aware of the pitfalls that can threaten this progress. Tourism products and services that demonstrate greater sensitivity to the environment, traditional culture and local people at the destinations can enhance the experience.

On the other hand, tourism in a context of uncontrolled growth puts increasing pressure on the natural, cultural and socio-economic environment and risks diminishing both the visitor's and the host country's experience. In short, increased market demand for experiences can contribute to social, economic and environmental sustainability only if the resulting pressures from growth are properly planned and managed.

Enjoyment of culture and the arts are only some of the positive attractions of tourism. Our hotels attract many business as well as leisure travellers, and it is our experience that when catering for business travellers, it often makes economic sense to add some enjoyment.

There is a world of diverse interests and pursuits to enjoy - the appreciation of a proud history and heritage, the discovery of the natural environment, the flora, fauna and wildlife, shopping in a colourful market or the spectacle of an exciting sporting event or community festival. These are important elements that go to make up the tourism experience. They all offer scope to develop employment opportunities to provide visitor services that will be sought after by the discriminating guest.

This can be particularly important for rural areas, where often there may be only limited opportunities for other economic developments. These services can help to provide jobs and unlock opportunities for the poor that might not otherwise be available, and flourishing local entrepreneurial businesses can help ensure that some of the revenues from tourism deliver back benefits to the host communities.

In the international hotel business we serve a varied range of customers from many different cultures and backgrounds. Every part of the cycle of human life and the bewildering array of emotions that each entails are experienced in hotels - marriage, conception, birth, death, the celebrations of joy and success, and also the difficult times of failures, sorrow and conflict. We experience the full gamut of human emotion. The skilful hotelier learns to be sensitive to the customers' different needs, and is able to share the moment with discretion, sympathy, trust and integrity. To make the happiest moments unforgettable; to give help, understanding and comfort; to make life's low points less difficult to bear.

What this powerful service ethic of our industry means is that to be a successful business we must be constantly in tune not only with the international and multi-cultural needs of our guests, but also with all of the local communities where our hotels are located. We need to be able to provide the little things that make the stay of the international traveller comfortable, for example in InterContinental we offer our guests a small pack of change in the local currency, to make things that little bit easier. We also need to be in a position to give expert insider advice on what they are to expect during their stay - whether for business or recreation - and offer outstanding service to them which will help enrich their whole stay and their experience of the destination.

This means that we must be able to engage with the local communities, and the many societies from which our employees come. Otherwise, how can our staff have pride in what we as a business are doing? We pride ourselves on being a preferred company, and one in which employees can develop their careers.

We employ local people at all levels in the organisation. We are keen supporters of the Investors in People standard, and it is a strategic priority for us to develop our people through a commitment to training. These policies of recruiting, training and empowering local people help to contribute to an area's confidence and prosperity.

It also means having in place an effective supply chain policy at each hotel that can deliver not only the international products and services demanded by a discerning business guest, but also quality local materials and supplies that can enable the delivery of outstanding local services and products of an international standard. Good local sourcing of quality materials and services helps to differentiate a hotel's product offering. In addition it helps to define and improve the guest's perception of what the host country has to offer. Importantly, it can also help to contribute to local business development, employment and the transfer of skills that will more closely integrate the hotel into the local economy and the community.

At Six Continents, we take a complete approach to the way we do business. Our business touches tens of millions of people every year, the guests who enjoy our hospitality, our investors, our employees and their families, our suppliers and business partners and the broader general public. Our company depends on all of these people, and we recognise that we have to be responsive and adaptable to their changing needs and their expectations for our corporate, social, environmental and ethical behaviour.

Our primary mission as a public company is to make profits to be able to pay our employees and shareholders. But we also believe that modern companies need to be more than purely financial in their mission. So at Six Continents we seek to embed good environmental, ethical and social practice into our business strategies and operations. We value the building of strong and co-operative partnerships with governments, national tourism authorities, trade associations and others and seek to accommodate the needs of all our key stakeholders.

As a world player Six Continents can be a very positive force for regional and local development - in strong contrast to the negative impacts that are sometimes attributed to globalisation and the operations of some multinational companies that rely mainly on imported skills, personnel and equipment.

Let me give you an example of what I mean by "engaging with our local communities". In Eritrea, the InterContinental Asmara is working with the Seawater Forests Initiative to help develop sustainable mangrove forests on the Red Sea coast. The goal of the Seawater Forests Initiative is to reforest the desert coast of Eritrea and other countries with similarly denuded coastline. The trees involved are mangroves, the only trees in the world that can be irrigated with 100% salt water, and Eritrea has given up most of its mangroves to over-grazing by camels and goats and by harvesting for charcoal, which is the preferred fuel for cooking. The planting of new mangrove forests is creating new wealth for local citizens. It has made a significant difference during the current drought in that region - by enabling the people to sell sustainable harvested animal fodder to local farmers to feed their livestock.

Six Continents is proud to be supporting the Seawater Forests Initiative with this visionary project that is both helping to build a better environment and contribute to reducing poverty by creating valuable and sustainable jobs in one of the world's least wealthy countries. Of course, we are delighted to be one of a number of small corporate investors in the project. It may just be a small project, but the difference it makes to that area is enormous. Even a small pebble cast in a lake can make ripples. By these and other projects, we are helping to create waves and to raise awareness, and in this way build up a pro-active anti-poverty strategy that can have positive and measurable impacts.

Another example of a community initiative that we are undertaking in another part of the world is a multi-grade school in Poyopoy in the northern province of Benguet on the main island of Luzon in the Philippines. This project has been developed as part of an ongoing global charitable partnership that we have with UNICEF. Both of our organisations share the belief that one of the effective deterrents to protect against poverty is to give as many young children as possible a decent education.

Our international business operates in nearly 100 countries and territories, and corporate and social responsibility underpins this business at every level. We encourage sensitivity to the different cultures of our colleagues and customers, and seek to embrace diversity. It is a core value that we respect all of the many different environments in which we operate.

This means that where there is a secure commercial opportunity for our sector to operate our businesses, travel and tourism and the hotel business can have important contributions to make to the process of rebuilding economic development. This can only happen after conflicts have been resolved.

More than half of the world's poorest countries are still involved in, or recovering from, violent conflict. Impoverished and vulnerable people are the worst affected by such emergencies. When peace and security have been restored, and there is incentive to invest in tourism and travel again, then this sector has the potential to help lift people out of poverty, and contribute to strong economic recovery. Wherever we can, then we will play our part in this, always respecting our core values and the primary business case for investment - namely return on capital employed, and delivery of value to the shareholder.

This can be a dramatic process, delivering powerful results. To illustrate what I mean, let us take the example of Vietnam. When the American trade embargo in Vietnam was lifted in 1995, foreign capital investment inflows increased, and tourism in Vietnam has flourished. Between 2001 - 2002 there was a 110 per cent increase in tourism arrivals to over 1 million visitors. Remarkable. Now I have deliberately chosen Vietnam as my example, because this is a country where Six Continents has no presence. It gives me the opportunity to pay tribute to my colleagues from other companies in travel and tourism and I say unreservedly to them: Congratulations, your efforts are clearly benefiting the people of Vietnam hugely.

Corporate and Social Responsibility requires the voluntary commitment by business to manage its activities in a responsible way. Our experience is that companies like Six Continents that value this ethic and understand the business argument for community investment, can use their presence at the grass roots levels to make a contribution to tackling social problems. This is not philanthropy - it is finding a new commercial way to tackle serious social issues that can have a positive impact on the reputation and the development of a business and its customer base.

It is becoming increasingly important for the private sector to communicate its commitment to Corporate and Social Responsibility. I therefore welcome the work of the WTTC in this area and commend it to you. The WTTC has recently published a Corporate Social Leadership report, which looks at the challenges facing the world, and it shows in a very positive light how The Travel & Tourism industry can be part of the solution to those challenges. Thank you for giving me the opportunity to share these thoughts with you.


International Institute for Peace Through Tourism