Transformation or Retaining the Status Quo: Multinational Hospitality Companies and SME Collaboration on Sustainability in Emerging Countries

Introduction

A small hotel in Sri Lanka, the Kip, is fully decorated with ethnic furniture. No plastic is used, and the hotel offers cleaning products and engages in composting and donating food. This hotel is no exception among such sustainable small and medium-size enterprises (SMEs), which develop novel products and experiences influencing the awareness of customers, suppliers, and other organizations such as multinational hospitality companies (MHCs). Just a decade ago the term green hotels or green practices in the hospitality industry used to bring visions of fringe environmentalism and a high cost for minimal benefit however, nowadays hotel businesses realized that a strategy good for the world can also be good for the bottom line (Chan et al., 2014).

The hospitality industry is always associated with its negative impacts on the environment. Although it is not among the great polluters such as the metallurgical or chemical industry, however, its size, rapid growth, and reliance on natural resources make it clear that environmentally sustainable actions are necessary. Many sustainability challenges generate boundaryless settings and entail systemic transformations beyond the capacity of individual businesses and, therefore, collaboration is key at the intersection of local, national, and international organizations. The role of multinational enterprises in general, and multinational hospitality companies (MHCs) in particular, is critical in all these sustainability-related developments, anchored mostly in the United Nations (UN) Sustainable Development Goals (SDGs) (e.g., Biermann et al., 2017; Fukuda-Parr, 2016; Kolk et al., 2020; UNCTAD, 2015).

Sustainability has gained popularity in the tourism and hospitality industry recently (Iyer and Jarvis, 2019; Ertuna et al., 2019; Hatipoglu et al., 2019)However, the drivers for, and nature of, the collaboration between MHCs and SMEs is not fully investigated by the previous studies and academic research has not yet picked up this trend (Ertuna et al., 2019; Hatipoglu et al., 2019), particularly in relation to the MHC and SME relationship in an emerging country. Multinational enterprises, including MHCs, face increasing pressures to be sustainable and/or responsible from several stakeholders, such as customers, home and host governments, public authorities, and investors (European Commission, 2018; Schoenmaker, 2017, 2018; Schramade, 2016; 2017). Their role as ‘good corporate citizens’ has received growing attention (Kolk & Lenfant 2010).

This good citizenship is often associated with their ascribed role of changing and positively influencing the business environment in the host country, including their relationship with SMEs. More specifically, in the tourism and hospitality industry, MHCs’ role is particularly significant considering the industry’s complex stakeholder profile encompassing those at both international and national (home and host country) levels, and the industry’s additional sensitivity to local contexts (e.g., culture, tradition and nature) (Hatipoglu et al., 2019; Iyer & Jarvis, 2019; MacKenzie & Gannon, 2019) including SMEs. As mentioned earlier, taking a critical approach to problematize the collaboration between MHCs and SMEs, this work aims to understand the drivers for, and nature of, their collaboration in the domain of sustainability, and whether – and if so, how – this collaboration generates value for both parties.