Exploring sustainable tourism entrepreneurship in Australia

This spring, I was on a six-week research visit to the Australian states of Victoria and Tasmania. The research objective of the visit was to learn about the sustainability practices of small tourism companies for an international benchmarking study. I interviewed company representatives to identify and compare responsible business management practices and sustainability actions in tourism companies in different peripheral environments. I discussed with owners or managers of 18 locally based tourism businesses in both urban and rural areas.
Kuvassa on kaksi rantaa, joiden välissä on metsää ja autotie. Metsä ja tie yhdistyvät horisontissa näkyviin vuoriin.

The Australian interviews will complement data collection already started in Norway and soon to be continued in Finland and Sweden on the responsible management practices and strategic choices of micro and small tourism entrepreneurs. In interviews, the entrepreneurs themselves could reflect over the phenomenon, and through their first-hand accounts, we as researchers will gain a better understanding of which aspects of sustainability are perceived as important in companies, which actions have the most direct impact on the sustainable profitability of companies, and where more guidance or, for example, clarification of concepts is needed. Making visible the values underpinning responsible management, practices and strategic choices in tourism businesses helps identify the most appropriate approaches for small businesses and develop better education and business advice. The Nordic data collection is still ongoing, but in this article, I will highlight the background to the need for the present study and the research questions that I will explore further during the data analysis phase.

Making accountability measures visible

Corporate social responsibility (CSR) reporting is currently a legal obligation for large companies in Finland, but the normative expectations towards more transparency of small companies' corporate responsibility activities are increasing too. The sustainability of small tourism businesses is of interest to tourists, local residents, business financiers and investors, as well as national tourism export promoters. In Finland, for example, participation in the Sustainable Travel Finland programme is a prerequisite for access to the Visit Finland's tourism promotion activities.

Responsibility is a broad concept and its practices in small businesses require more up-to-date knowledge. In our interviews and discussions with entrepreneurs attending our responsibility training programme, we see that many small companies do not recognize their existing responsibility actions, do not assess or develop their activities systematically and therefore do not communicate them to their customers or partners. There is also some fear of being branded as highly responsible, as worrying examples of greenwashing and misconduct in supply chains have undermined consumers’ confidence in marketing claims. Responsibility actions are taken either in a self-directed way based on one's own values, because one wants to make the world a better place, or in a customer-driven way, which means reacting either to expectations from customers, financiers or legislators, primarily to ensure business continuity or to exploit an identified niche (Simunaniemi et al, 2023).

Can tourism ever be sustainable?

The first issue to consider is very fundamental, even existential for the whole tourism industry: can tourism ever be fully sustainable and how do the owners or managers of small tourism businesses see their role as part of the international tourism infrastructure? Sustainable tourism is defined by the UN Environment Programme as tourism that takes full account of both current and future economic, environmental and social impacts, including the needs of visitors, industry, environment and host communities. Responsible businesses create sustainable tourism while strengthening the region's ability to cope with change and crises in the most flexible way possible. Almost all of my interviewees had the impression that Europe and Scandinavia are much further ahead in terms of responsible business practices, for example in waste recycling or the possibility of using electric cars. In Australia, decisions are made more at the individual and company level, with differences within the industry in the sustainability performance of individual companies being more pronounced.

How to combine environmental, economic and social responsibility?

Another interesting research question is how tourism businesses reconcile the different aspects of sustainability, i.e., how they in practice combine economic viability, non-conflicting interaction with local landowners and residents (social sustainability) and maintaining or even renewing the natural values that are essential for nature tourism. It seems that local ownership contributes to the company's motivation to keep the local environment as intact as possible and to create conditions for other local residents. A very large number of interviewees stressed the importance of localism and Australian businesses are very good at branding their tourism product. Talking about profitability, growth targets or exit strategies was also a natural part of the discussion. In my experience, these are less common topics of discussion for many Finnish micro and small entrepreneurs.

The international data also provides an opportunity to examine companies' attitudes towards sustainability reporting and sustainability certification. Most of the companies I interviewed in Australia were not involved in any sustainability programme. The initial reason for voluntary participation seems to be above all the desire to develop internal company activities more in line with management's own values and to provide information, for example on how to reduce emissions from operations. My own impression is that in Finland, the demonstration of responsibility is considered to have primarily marketing value, as customers are believed to prefer responsible tourism service providers.

The peripheral perspective

Sustainable development and climate change are transnational phenomena, involving international agreements, political guidance and nationally applicable practices. Legislation and also market-based expectations of sustainability actions by tourism businesses are very different in Australia.

In our research, we can therefore bring the perspective of the northern, southern and rural peripheries of the world to the scientific debate on tourism entrepreneurship, micro and small enterprises and business management.

International good practices in the tourism sector can also serve as a model for Finnish corporate responsibility training and advisory services. Research into the sustainability practices of micro and small enterprises helps to identify training and advisory needs, for which the University of Oulu and its partners can offer solutions. Corporate responsibility is a broad and difficult-to-understand entity, the related guidelines should use the language and examples used by companies themselves.

The research visit was funded by the University of Oulu's profiling project GenZ (Profi4) - a profiling project to strengthen people's capabilities, anticipate future changes and increase people's resilience through internationally high quality multidisciplinary researchThe study visit was hosted by the La Trobe University School of Economics. During the trip I also visited the University of Tasmania and participated in a seminar on Antarctic tourism.

Anna-Mari Simunaniemi, PhD, Micro-Entrepreneurship Research Director, University of Oulu Kerttu Saalasti Institute

Picture: Anna-Mari Simunaniemi

Article reference:
Simunaniemi, A., Valkjärvi, M., Franzen, R., Liikala, S., Tähtinen, J., Suomi, K., & Jeminen, J. (2023). Microentrepreneurs as socially responsible leaders. South Asian Journal of Business and Management Cases. 12(1), 7–13.