Assignment 1A Report Sapa PDF

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RMIT International University VietnamASSIGNMENT COVER PAGECourse Code:Course Name:Location where you study:Title of Assignment:Student name & Student number:Learning Facilitator in charge:Assignment due date:Date of submission:Number of pages including this one:Word Count:BUSMEco-Tourism & S...

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RMIT International University Vietnam ASSIGNMENT COVER PAGE

Course Code:

BUSM4567

Course Name:

Eco-Tourism & Sustainable Hospitality Management

Location where you study:

Saigon South

Title of Assignment:

Written Group Report

Student name & Student number:

Nguyen Yen Han (s3743951) Tran Quynh Mai (s3712382) Vuong Hue Man (s3741158) Ha Huynh Phuong Thao (s3740778) Luong Thuy Duong (s3740913)

Learning Facilitator in charge:

Nhan Nguyen

Assignment due date:

29 March 2019

Date of submission:

29 March 2019

Number of pages including this one:

19

Word Count:

3594 (excluding cover page, table of content, references)

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TABLE OF CONTENTS

Introduction

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Key Elements of Stakeholder Theory

4

Key Elements of Triple Bottom Line (TBL) Performance Evaluations

6

Governance Interests and TBL

8

Service Provider Interests and TBL

9

Visitor Interests and TBL

10

Host Community Interests and TBL

11

Recommendations

12

Conclusion

13

Supporting Materials/References

14

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INTRODUCTION ‘Sustainable development’ has always been a positive trend that all industries desire to follow. It is defined as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’ (IISD n.d). In tourism, to maintain and further enhance sustainable development, key concepts including 'stakeholder theory' and 'triple bottom line' must be prioritized and carried out appropriately. These two elements will be analyzed especially in the case of Sapa. Sapa is a town located to the west of Lao Cai Province, with the area of 24.02 sq. kilometers and the population of around 15,000 people. According to Lao Cai Department of Culture, Sports and Tourism (2017), every year Sapa attracts enormous numbers of visitors, which was up to 1.7 million people and generated a total revenue of over 2000 billion VND in 2017. In 2018, the town was placed at 6th among the top 10 destinations in Southeast Asia (VNAT 2018). However, in recent years, Sapa has witnessed some adverse changes regarding two mentioned concepts. In this report, research on the issues will be done from the perspectives of different stakeholders, before some possible recommendations are drawn. .

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KEY ELEMENTS OF STAKEHOLDER THEORY In the age of business competition, stakeholder theory should be understood well and applied to each operation area as well as each activity type of that area. Sapa is one of the places where the eco-tourism area is popular in Vietnam. Therefore, stakeholder theory for the eco-tourism in Sapa should be applied appropriately to maintain and develop their tourism industry. According to Freeman (1984), ‘stakeholder’ is defined as ‘any group or individual who can affect or is affected by the achievement of the organization objectives’, and ‘stakeholder theory states that the purpose of a business is to create value for stakeholders not just shareholders’ (Donaldson & Preston 1995) . This concept has two approaches: The first one is related to the profit-making companies who are supposed to pay attention to the needs and wants of all stakeholders not just the owners. However, the approach just focuses on sectors that ‘deserved to be more concentrated on’ due to the differentiation in the impacts of each stakeholder on the organization (Khazaei, Elliot & Joppe 2015). The second idea states that all tourism activities inevitably affect a wide range of individuals and groups, ‘each of whom has a legitimate interest in the process used to carry out that activity, and the outcomes that result from it’ (Freeman 1984). Hence, organizations should equally take care of anyone with interests in planning, delivery process or the outcomes of those procedures (Khazaei, Elliot & Joppe 2015). ‘Every stakeholder is not necessary to engage in the decision-making process but they all need recognizing and considered because failure to analyze one stakeholder’s needs could lead to the error in the process of planning and executing the service’ (Byrd 2007). In business activities at Sapa, the relationship among stakeholders needs to be differentiated so as to identify the exact stakeholders for every single project (Friedman 2006). Local communities, host area’s government and administrations, tourism service providers, and customers (tourists) are the four main groups of stakeholders that can be considered for tourism development in Sapa. Firstly, ‘local community’ are the ones who support the tourism industry in their area to attract tourists to come with services and specialties they provide. Specialties can be considered as ethnic minorities such as Black H’Mong, Red Dzao, Dzay (VTN 2015). They have maintained the cultural specialties throughout the long process and therefore, uphold their own values and bring more benefits to Sapa.

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Secondly, ‘tourism services providers’ offer the best services in all cases for tourists to enjoy their time in Sapa. They come up with service plans and strategies to satisfy what customers need and benefit themselves, yet still have to guarantee the common sense for all aspects. Thirdly, ‘host area’s government and administrations’ play an essential role in the tourism sector. They control and improve the economic, social and environmental dimensions of Sapa’s tourism on behalf of the host area. In addition, they have to make sure that there are no tourism activities that are conducted against the law. Lastly, ‘tourists’ are a segment that bring biggest profit for the tourism development of every destination. Sapa is not an exception. In 2018, the town ‘welcomed more than 2.1 million visitors and earned more than 3.2 trillion VND (136.6 million USD) in tourism revenue’ (VIR 2018). Obviously, visitors’ interest has a significant impact on the quality of local tourism, as they usually give feedbacks for their experience which may influence the decision of the others. Taking Sapa as an example, positive feedbacks regarding events, facilities, environment and attractiveness bring huge numbers of tourists and high annual income, but negative ones may cause adverse results.

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KEY ELEMENTS OF TRIPLE BOTTOM LINE (TBL) PERFORMANCE EVALUATIONS The Triple Bottom Line is a concept that embodies three dimensions of a business, namely profit (economic), people (social) and planet (environmental). It directly impacts on the goal of business maintenance and development, and work as a basis for measuring the level of corporate responsibility to the society and the impact on the environment (Adebowale 2002). Economic sustainability, referring to business performance, is assessed through investment, sales and profit taking. It supports economic growth, has the ability to solve cost problems and manage risks in long term without adversely affecting the remaining aspects of society and environment. Besides, economic sustainability can create social benefits, improve economic stability, social status, and create jobs for local people. In other words, all businesses can benefit from their operations, provided they comply with the law and can manage long-term risks, to ensure revenue for the entire region and support local people's life. To take Sapa as an example, if the government and investors cooperate and invest in appropriate projects, then more jobs are created for the local, the total income goes up and the life quality is improved. Also, this bridges the cultural exchange between ethnic groups in the northern mountainous areas, connects commercial points of the Northwest with the whole country, and further, the ASEAN region (TTXVN 2017). Social sustainability is 'a process for creating successful sustainable development that promotes wellbeing, by understanding what people need from places they live and work’. It ‘combines the design of the physical design with the social world - infrastructure to support social and cultural life, social amenities, systems for citizen engagement, and space for people and places to evolve’ (Lupinacci 2012). The government and investors have to be responsible for supporting the life quality in the area, and ensure that when service providers enter the area, the local will not be negatively affected and their traditional identity must be respected. Particularly, Sapa is one of the places where indigenous culture are ‘golden resources’ and therefore have created a foundation for Sapa to develop various types of tourism, especially cultural tours and community tours. This can be considered a solution to poverty and unemployment of the local (Tho 2018). No matter what, all activities must follow the law to form a secure environment for each stakeholder. Environmental sustainability is a term that assesses the legally responsible interaction with the environment to prevent exhausting natural resources, at the same time ensure the rate of exploitation of renewable resources and valuable resources for humans with long-term relevance. Environmental sustainability helps to assure that the needs of human civilization are met and that future generations can fulfill their needs without being hampered by 6

environmental sustainability (Moldan, Janouskova & Hak 2012). Not only tourism, but also other industries all have significant impacts on the environment. Therefore, each individual and business needs to hold responsible for their activities, which may do harm to natural resources. Besides, the growth of tourism development is remarkable nowadays, so all stakeholders need to comply with laws on environmental protection to ensure environmental sustainability, in order to attract more investments, increase the industry revenue and strengthen the local economic situation. In Sapa, the exploitation of natural resources, the lack of waste treatment plans and the lack of public awareness regarding environmental protection are significantly affecting people’s daily life, and also worsening the image of the destination (Hop 2018).

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GOVERNANCE INTERESTS AND TBL In the economic aspect, the governance consented to a long-term plan including the need for Sapa to improve its unique point as well as the service quality. The local government pays attention not only to the economic restructuring regarding workforce and the quality and quantity of service industry, but also to the rural economy development (VIR 2016 & Viet Nam News 2017). The Ministry of Transport has also allowed connecting Hanoi - Lao Cai Expressway to Sapa and constructed Lao Cai Airport with the capacity of 560,000 passengers to facilitate the travel route (Huyen 2016). However, despite the government’s big efforts, Lao Cai still faced many challenges in terms of economy. Particularly, the system of cargo yards at the border gates is narrow; the progress of some important transport projects is reportedly slow. Additionally, the infrastructure and human resource quality of the tourism industry are still weak and not sufficiently invested (The World & Vietnam Report 2017). Speaking of the social aspect, in recent years, Sapa has become a preferable destination for many domestic and international tourists thanks to a wide range of ethnic minorities who share distinct native cultures. Therefore, along with the economic development, the government also launched plans for social development. President Tran Dai Quang said that Sapa government should focus on developing human resources, healthcare system and education system for ethnic minorities. It is also important that ethnic cultures be well preserved and promoted (Viet Nam News 2017). Nonetheless, the local intellectual level is still low despite the attempt in improving local education. From the environmental perspective, Sapa District Commissioner has approved and implemented Project No.09 ‘Environmental protection, responding to climate change in the period of 2016 - 2020’ to solve the situation of environmental pollution. The project highlights the need of improving urban environment and promoting the development of local tourism industry (Duc 2016). Nonetheless, huge hydropower projects built at Lao Chai, Su Pan, Muong Hoa valley... have done harm to the local environment. To take an example, Lao Chai and Su Pan were some of the most well-known tourist attractions in Sapa, but there was a remarkable decrease in the number of visitors coming after the construction of hydropower dams. Natural landscapes are ruined; the excessive level of smoke, dust and the sound of rocks blasted have negatively affected not only tourists but also local residents. Other issues may also be occured, since local farming lands were occupied and water was depleted for the hydropower building process.

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SERVICE PROVIDER INTERESTS AND TBL From the economic side, few years ago, Sapa had 126 businesses which could only supply around 3,600 beds for tourists, according to Lao Cai Provincial Tourism Information Center, (VNS 2015). Obviously, Sapa cannot serve its visitors well with high-quality rooms due to the lack of accommodation, thus, investors were encouraged to come. Sun Group was one of the first investors who saw the tourism potential of Sapa, and invested about VND 4,400 billion in the construction of the world's most modern three-wire cable car which was first available in Asia - Fansipan Sapa (Quy 2016). Sun Group’s activities also drove investments from other investors to Sapa, such as Vin Group, Hoa Sen, Bitexco Group… In addition, the five-star hotel project started in 2015 by Constrexim Holdings was another big investment, which covered 7,000 sq. meters. Since then, other 30 investment projects were being involved, which led to the significant rise in the number of accomodation in Sapa. Particularly, the number of rooms went up from 2,500 in 2010 to 4,000 in 2015. However, doubtlessly when the local economy grows and is fully concentrated, the impacts on environment tend to be ignored. Notably, the cable car system which is used to deliver visitors to the summit of Fansipan can be a cause to destroying Sapa’s nature. Many ethnic people claimed: ‘If more and more building (happens), then one day we will lose Sapa, we won't have any more mountain’ (Christoff 2016). About the social aspect, as Sapa is home to various ethnic minorities like Hmong, Dzao and Tay, traditional cultural activities in Sapa are abundant and diverse. Festivals such as Gau Tau, Nhan Song, Tet Nhay... with a wide range of activities are organized every year, which was one of the most appealing factors of Sapa (Do 2015). Tourist companies, therefore, are to plan more tours at the same time as the festivals are held so as to attract more customers, to gain more sales and revenue. This can not only raise awareness for tourists about the regional culture, but also be used as an economic advertising tool for the destination. Speaking of the environment, Sapa has been for long well-known for its breathtaking natural sights such as Love Waterfall, Silver Falls, Sapa Lake and Muong Hoa Valley. However, while just focusing on investing in business projects, investors may not be aware that the natural environment and ethnic culture of Sapa are under threat due to tourism commercialization (Ha 2017). The forest and many trees are cut and destroyed to build the hotels, restaurants and stores. Besides that, big and small constructions being built or maintained in Sapa tend to damage its traditional peaceful atmosphere in tourists’ eyes due to dust and noises (Quynh, Tung & Tien 2017).

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VISITOR INTERESTS AND TBL Coming to Sapa, tourists are now having many choices of stay that meet their needs and financial conditions, with various price types such as 15-20 USD for hotels outside the town, or over 100 USD for luxurious accommodations. This is a positive point in terms of tourism services offered by Sapa, since service has never been considered a strength of Sapa’s tourism. However, the lack of investment in road repair is a huge problem for Sapa. Frequent roadworks and bad road conditions prove that the main roads at Sapa are not well maintained. This causes dust on dry days, slippery rocks and muddy hill slides on rainy days which are dangerous for travelers’ movement as the terrain of Sapa is mountainous (Hodophile, 2018). For the social area, there are chances for tourists to explore local customs and habits, for example, the traditional cuisine of ethnic minorities such as H’Mong, Dao, Tay, Giay, Hoa, and Xa Pho. In particular, tourists can try tasting different specialities like 'thang co', 'cap nach' pork, seven-color sticky rice… which they probably cannot be served in central cities. In addition, according to Asku (2015), as the local regularly deal with many international visitors, English can be considered a common language in this area, meaning that travelers do not face many difficulties in communicating with local residents in Sapa. Nonetheless, ‘tourism in Sapa marred by bad sales tactics’ proves that the image of hospitable local people are gradually disappearing. Instead, there are new phrases such as ‘no money, no photo’ or ‘no money, no talk’, and children claiming money for photos that tourists have taken or forcing them to buy souvenirs (Lao Dong 2012 & Vu 2017). It is noticeable that many local residents aim to take advantage of tourism, when they become street vendors and use children as a tool to earn money from tourists. These manners infuriate tourists, and also worsen the national image in the eyes of foreign friends. On the environmental side, cool fresh atmosphere is a unique feature of Sapa compared to other tourist cities. Sapa is also favored by the imposing scenery as well as wild village trails, which allows tourists to experience the simple beauty of nature thanks to pleasant natural conditions. However, in recent years, due to the continuous economic development, many forest trees have been chopped down to give way for modern buildings and resorts. As a result, Sapa is gradually losing its true beauty, which is the primary cause of tourists’ dissatisfaction when returning to the town (Amy, 2017).

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HOST COMMUNITY INTERESTS AND TBL H'Mong and Dzao are the two ethnic minorities that occupy the population majority in Sapa. There are several other ethnic groups and also people migrating from the delta who live and develop their business there. The strong tourism development has brought more benefits for the economy such as creating more career opportunities, contributing to local income, and improving the quality of life for villages. Since the number of tourists has remarkably increased in recent years, ethnic minorities have launched the homestay model in order to offer more practical experience to tourists, such as cultural life and daily routine of a native. This activity attracts a wide range of tourists, helps to generate higher revenue and reduce the number of poor households in the locality (Nhan Dan 2017). On the other hand, although Sapa is famous for its unique terraced fields, due to the excessive exploitation, the local gradually neglect the agricultural development which was the main industry of the locality. Specifically, the ethnic groups tend to follow the trend of using what they make, not purchasing from the outside, thus, if they made too much exploitation, farmlands might be exhausted which led to the drop in agricultural productivity, hence insufficient food (Aurik 2017). In the social aspect, tourism development is synonymous with local cultural features that are introduced, developed and preserved. For instance, Lao Cai Department of Culture, Sports and Tourism and Sapa district’s authorities proposed the plan named ‘turn heritage into assets’, which means preserving and promoting unique products of each local com...