“A Natural Experiment in the Caribbean” – Corporate environmental & social responsibility practices by hotels in Cuba & Dominican Republic

Excerpts from “SUN, SAND, AND SUSTAINABILITY: Corporate Environmental and Social Practice in Caribbean Coastal Tourism” (2006) by Emma Stewart, Ph.D., Research Manager at Business for Social Responsibility

…Together, the island nations of the Caribbean constitute the region most heavily affected by tourism in the world*. As islands, they are especially vulnerable to environmental impacts, such as coastal erosion, fresh water shortages, marine pollution and habitat loss**. And as developing countries, they have become increasingly reliant on international tourism to bring much needed hard currency.

…the Caribbean is an important region in which to examine the patterns of corporate environmental and social practice in the tourism sector. And in fact, it also provides a sort of ‘natural experiment’, comparing two Caribbean island nations, Cuba and the Dominican Republic, that have similar tourism markets but greatly different approaches towards managing them. Both countries’ tourism markets are quite similar in terms of arrival numbers, target markets, prices, and revenue. And in both of these countries, the growth and success of tourism has been a significant story throughout the region.

…The similarity of these two countries’ tourism sectors is in contrast to their strikingly different approaches to its development. While the Cuban government has welcomed foreign investors to build and manage many of its resorts, it continues to play an active role, owning, running, and regulating much of the tourism industry, including resort hotels. A number of laws also protect the Cuban economy from the economic “leakage”*** so common in neighboring tourist destinations, and retain tight control over the process of tourism development.

…The study selected two comparable regions in both Cuba and the Dominican Republic, all of which are dominated by four- and five-star all-inclusive resorts: Varadero, Cayos Coco & Guillermo, Puerto Plata and Punta Cana. Six months of fieldwork permitted site visits to a randomized sample of 60 such resorts, including tours of the property and facilities, and extensive interviews with managers at multiple levels.

…Each resort was assessed based upon 50 indicators relating to different categories of environmental and social management: energy, water, land use, transport, materials, awareness raising, environmental policy and systems, relations with guests and employees, and the input of local populations.

Findings at the National Level

Prediction: High environmental and social performance will be associated with each of the following characteristics: location, cost of utilities, and siting and land use.

Of these characteristics predicted to be related to environmental and social performance, two proved to be particularly significant: the cost of utilities, and siting and land use. Predictably, in both countries, when water prices were higher, wasteful consumption was lower. High costs of water tended to be associated with more sustainable land use management practices, such as using native plantings and drip irrigation. Interestingly, this was not the case for another utility, electricity, whose price was not related to the level of wasteful consumption. This implies that water, at least in the Caribbean, is a more important motivator when it comes to choices about how to manage resort properties.

Findings at the Local Operations Level

Prediction: High environmental and social performance will be associated with each of the following characteristics: the resort’s star category, its age, and the General Manager’s experience.

Interestingly, a resort’s star category (in this study, either 4 or 5), did not show any significant relationship with environmental and social performance. It was predicted that five-star resorts would be more likely than four-star resorts to exhibit high environmental and social performance, possibly due to stronger management capacity, better-educated clientele demanding high performance in all areas, or more financial flexibility. However, there were only two very slight differences: five-star hotels have marginally better water management, perhaps due to stronger management capacity, while four-star hotels were slightly better on transport, probably because they are more likely to offer more efficient communal transport options, as compared to the exclusive options at five-star resorts.


* World Travel & Tourism Commission (2004) “Cuba; Travel and Tourism Forging Ahead” and “Dominican Republic; Travel and Tourism Forging Ahead”, The 2004 Travel and Tourism Economic Research, London; World Travel and Tourism Council

**Mieczkowski, Z. (1995) Environmental Issues of Tourism and Recreation, University Press of America

***Lindeman, K. C., Tripp, J. T. B., Whittle, D.J., Moulaert-Quiros, A. & E. Stewart (2003) “Sustainable Coastal Tourism in Cuba: Roles of Environmental Assessments, Certification Programs, and Protection Fees”, Tulane Environmental Law Journal, 16:591-618

About this report:

This report summarizes research conducted by Emma Stewart while at Stanford University, with the support of Environmental Defense and The International Ecotourism Society (TIES).