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Oxford Business Group

Oxford Business Group

Oxford Business Group (OBG) is a global publishing, research and consultancy firm, which publishes economic intelligence on the markets of the Middle East, Africa, Asia…

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Can The Tourism Industry Achieve Net-Zero?

  • Tourism is a key contributor both to global GDP and global emissions.
  • There have been calls for a major reboot of the sector following Covid-19. 
  • Airlines are now able to offset emissions in an international carbon exchange. 
  • Air carrier organisations in both MENA and the EU have set net-zero targets.

A report published in November last year by the World Travel & Tourism Council (WTTC), in collaboration with the UN Environment Programme and Accenture, has highlighted some of the challenges facing the global tourism industry when it comes to decarbonisation.

In 2019 the sector saw its 10th consecutive year of growth; with 1.47bn international tourist arrivals worldwide, it contributed more than 10% of global GDP and accounted for one in 10 jobs.

However, the industry was also responsible for some 8% of global greenhouse gas emissions.

For a range of countries – many of them developing economies – tourism was a principal source of income prior to the pandemic. In this sense, the border closures and lockdowns of the past two years have been particularly deleterious, and many such countries are understandably keen to reboot their tourism industries as soon as possible.

However, some industry bodies are arguing that a precipitate return to “business as normal” would ultimately prove damaging and unsustainable. Instead, the industry must commit to net-zero emissions and the adoption of a more environmentally conscious mindset.

A leading voice in this is the Sustainable Tourism Global Centre, a new multinational coalition that aims to accelerate the tourism sector's transition to net-zero emissions.

Launched in Saudi Arabia in October 2021, the countries invited to join during the coalition’s first phase are the UK, the US, France, Japan, Germany, Kenya, Jamaica, Morocco, Spain and Saudi Arabia.

Harvard University will support the initiative with research and capacity-building, while the UN Framework Convention on Climate Change will help it to accelerate industry action.

The coalition has ambitious targets to achieve. Of the 250 businesses analysed in the WTTC report, 42% had defined a climate target, of which 20% were aligned with the Science-Based Target initiative (SBTi) guidance.

As OBG has explored, the SBTi is a global body that provides companies with a defined framework to reduce greenhouse gas emissions in line with the Paris Agreement. The significance of science-based targets is that they are universal, making it harder for companies to misjudge or misrepresent their sustainability performance.

Furthermore, the WTTC report observes that, at present, the tourism industry applies a range of approaches to target metrics, target dates, baselines and emissions reduction commitments, all of which makes comparability difficult.

Nevertheless, a range of individual institutions and multilateral initiatives are leading the way in the industry’s decarbonisation. As the hospitality and travel segments of the industry are responsible for the lion’s share of its emissions, they are being targeted for urgent reform.

Trailblazers in hospitality

Various resorts and hotels have already taken significant steps towards decarbonisation.

In 2018 the Bucuti & Tara Beach Resort in Aruba became the first resort in the Caribbean – and one of the first in the world – to go carbon neutral.

Other resorts have followed suit.

In Thailand, the Santiburi resort in Koh Samui was certified as carbon neutral in 2019 by the Thailand Greenhouse Gas Management Organisation and VGreen.

At the other end of the spectrum, in 2020 the Ischgl ski resort in the Austrian Alps was granted a Climate-Neutral Certificate by climate action solution provider ClimatePartner.

Going forwards, it is anticipated that resort projects will put carbon neutrality front and centre.

A good example of this is Saudi Arabia's flagship Red Sea tourism project, which last year secured $3.8bn through the first ever riyal-denominated green finance credit facility.

The project is being built on a 28,000-sq-km site; when it is fully operational in 2030, it will feature 50 hotels, a luxury marina, and a range of entertainment and leisure facilities. The site’s entire transport network, including a new airport, will be powered by renewable energy.

In a recognition of its commitment to sustainability, at the end of 2021 the Red Sea tourism project was named the ESG Initiative of the Year by the Chartered Governance Institute UK and Ireland.

Meanwhile, at the level of individual hotels, December 2021 saw the opening of what purports to be the world’s first net-zero hotel.

Run by hospitality brand Room2 in the London neighbourhood of Chiswick, the hotel features 86 rooms powered by solar panels and ground source heat pumps, alongside a host of other environmentally friendly features.

Airlines’ move towards net zero

When it comes to air travel, a range of initiatives are under way to help the industry transition to net zero.

In 2016 the UN launched its Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

The scheme is intended to empower carriers to purchase emissions reduction offsets from other sectors, thereby compensating for any increase in their own emissions.

CORSIA’s pilot phase launched on January 1, 2021, with 88 states participating. Its voluntary first phase begins in 2024, followed in 2027 by a mandatory second phase.


The International Air Transport Association’s Aviation Carbon Exchange (ACE) also launched at the start of last year.

ACE is a centralised marketplace for CORSIA-compliant emission units, enabling airlines and other aviation stakeholders to trade carbon emission reductions.

At the end of 2021 Qatar Airlines became the first carrier in the world to make a transaction on ACE.

Indeed, Gulf airlines are at the forefront of the industry’s drive to become carbon neutral.

At the 54th Annual General Meeting of Arab Air Carriers Organisation (AACO) – held in Doha in November last year – a resolution was signed to reach net zero by 2050. Headquartered in Lebanon, AACO’s membership comprises 32 airlines based out of 19 countries.

In this, AACO followed the example of the EU’s aviation industry, which in February last year unveiled a roadmap for carbon neutrality.

“Destination 2050 – A Route to Net Zero European Aviation” lays out how to reduce carbon emissions from all flights within and departing from the EU by 45% by 2030, before reaching net-zero emissions by 2050.

It remains to be seen when other, comparable bodies will follow suit.

By Oxford Business Group

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