STAKEHOLDERS AND

SUSTAINABLE TOURISM

DESTINATION REPORT

Lecturer: ​Erwin Losekoot

Course Name: ​Ecotourism & Sustainable Hospitality Management

Course Code: ​BUSM4567

Member:

Nguyen Ngoc Khanh Tran: ​s3732391

Nguyen Gia Bao Ngoc: ​s3678772

Nguyen Thi Thanh Tuyen: ​s3607835

Nguyen Hien Thao: s3740854

Wordcount :​ 3131

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 TABLE OF CONTENT

1. Introduction 2

2. Key elements of stakeholder Theory 3

3. Key elements of Triple Bottom Line 5

4. Governance Interest & TBL 7

5. Service Provider Interest & TBL 9

6. Visitor Interest & TBL 10

7. Host Community Interest & TBL 12

8. Conclusion 13

9. Reference 14

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1. Introduction

Any travel destination in the world is hoped to develop sustainably over a long term.

Therefore, to reach a goal of sustainable development, there is a core of balance the

three social-economic-environment pillars (known as the Triple Bottom Line) and the

importance of people factor (described as Stakeholder Theory). Based on these twin

concepts, Da Nang will be introduced to apply and emphasize their influence on

tourism industry. Located in the middle of Central Vietnam, Da Nang faces to the sea

and backs up to the mountains. This is an outstanding feature of its geographical

position. Combining with social, economic and human factors, Da Nang becomes

one of the most potential travel destination in Vietnam which has been voted as one

of the top 10 worth-living cities in the world in 2018 (Vietnam Tourism, 2018).

Moreover, the “mother nature” has granted Da Nang with many pristine picturesque

beaches. According to VietnamNet, Forbes voted My Khe beach in Da Nang as one

of the six most attractive beaches on the planet. This report will discuss key

elements of Stakeholder and Triple Bottom Line theory, then analyze the feasibility of

Da Nang’s sustainable tourism development under the perspective of government,

service provider, visitor and host community interests based on Triple Bottom Line

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theory. Finally, there is a short conclusion and some recommendations will be made

to solve the problem.

2. Key Elements of Stakeholder Theory

“Stakeholders include those individuals, groups, and other organizations who have

an interest in the actions of an organization and who have the ability to influence it.”

According to Savage, Nix, Whitehead and Blair (1991, p.61), ​stakeholders are

defined as people who have direct or indirect interest in the activities of the business

and they can be any party in the organization’s internal and external environment.

There are many types of stakeholder such as government, supplier, customer and

competitor. To be more specific, we can enumerate the primary stakeholders in

tourism industry are tourists, local community in Da Nang, government,

non-governmental organizations and tourism service providers. Also, Savage, Nix,

Whitehead and Blaire (1991) classified stakeholders into four main different

categories: Supportive, Marginal, Non-supportive and Mixed Blessing :

- The first type is called Supportive which means they are either low potential

to threaten or high potential to cooperate with such as suppliers, managers,

NGOs and service providers.

- Marginal Stakeholders can be government, stockholders, who are people

whose possibility for both threat and cooperation is low. They can make many

important decisions that affect the organization but not really interested in

most issues.

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 - Stakeholders have low possibility on cooperation and high potential on

threatening are called Non-supportive. They usually caused distress for the

business and they can be federal government, competitors, the media.

- The last type plays an important role because they are equally high on

possibility to threat and cooperate such as clients or customers.

Since the term “Sustainability Tourism” had been widely known, in order to evaluate

potential for long-term development of tourism industry, there are some

stakeholders’ view that we need to take into consideration to ensure that we can

make a good decision:

- From the government’s point of view, the most important thing is tourism

industry needs to build up stronger economy. They also want their people to

have a better quality life and maintain the ecological profile.

- From service provider ’s perspective, there is an equal consideration among

operating profit, nice local people and natural resources accessibility.

- With tourist, it is easy to know that they would choose the one that value for

the money they spent or not and there will be a comparison between many

options. For example, when tourist decide to go on a vacation, they will

compare the money they spent for a service among Singapore, Vietnam,

Thailand which suits them best. Besides, attractive surrounding could be an

essential elements. Many tourists may enjoy the crowded in Vietnam but

trash,rubbish makes them do not want to come back here again and to add

insult to injury, they will rate on tripadvisor, facebook, social media website

and tell their friends. That action would worsen Vietnam ‘s reputation.

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 - Lastly, the resident would consider economic, societal, environmental are

equally essential. First, they need to gain personal benefit from selling things,

accomodation for rent to tourists. Moreover, the money tourists spent in our

country should help residents to have better road, airport and even lower

taxes. Next, they will feel really annoyed if their lifestyle is disturbed as well as

backpackers, travellers damage the natural environment.

Freeman, Wicks and Parmar (2014, p.364) stated that “Whereas all these firms

value their shareholders and profitability, none of them make profitability the

fundamental driver of what they do.” It means if a business starts with making

money, it is only for short term. Then they continue said :“Stakeholder theory begins

with the assumption that values are necessarily and explicitly a part of doing

business. It asks managers to articulate the shared sense of the value they create,

and what brings its core stakeholders together.” (Freeman, Wicks and Parmar, 2014,

p.364). The phrase “value” here represent for money, profit and once again they had

emphasized that things will not last long if it does not develop in a sustainable way.

Triple Bottom Line theory will define more clearly about three aspects of sustainable

development.

3. Key Elements of Triple Bottom Line (TBL) Performance

Evaluations

Joining with stakeholders theory in the twin concepts contributing to sustainable

development is the Triple Bottom Line (TBL) created by John Elkington in 1994. It is

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well known as a core accounting framework catalyzing to almost business

operations. This concept shows that the value of the company is not only measured

on the economic side but also from the performance in societal and environmental

perspectives. These areas could be respectively considered as the three P’s: profit,

people, planet. In tourism, the TBL approach contributes to the long-term sustainable

development because each of them plays their own role and shares the same

precise value. To make the clarification of this counting framework, bellowing parts

would identify accurately three key components in TBL domains.

The economy is a significant factor in business success, it needs to be synthesized

with social and environmental aspects. That is why its responsibility in TBL is not

basically like the traditional measurement which term the finance is the only one

evaluated aspect. According to Sustainability Reporting Guidelines in 1999 from The

Global Reporting Initiative, investments in human capital, labor productivity levels,

and nature and location of outsourced operations are main economic indicators. In

tourism, economic perspectives are obtained under the calculation on a number of

employment opportunities, nonresident visitors, tourism promotion budget, labor

income and a percentage of labor force (McCool, Moisey & Nickerson 2001).

According to Viet Nam National Administration Of Tourism (2017), 186,770 jobs are

created and approximately 854 million USD in revenues is thrown in by the Da Nang

tourism industry.

In order to maintain the sustainability in the organization, in TBL theory, besides their

own benefit from economic benefits, each company also concentrates on further

aspect: social responsibility. Particularly, in the journal article “Quantifying the Social

Dimension of Triple Bottom Line” published in 2007, the results showed that related

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directly to stakeholders, at least, there are two levels of social impact maintaining

both individual and community wellbeing which are internal (employees and

suppliers) and external (customers and communities). In the tourism industry, social

indicators show under the data on the condition of working environment, the level of

satisfaction of tourism employees, the quality of welfare and the fairness in paying

wages which are an application of business to their employees. In Danang

Fantasticity (2015), the strong relationship between tourists and host Da Nang is

presented when Da Nang is in the top 10 Asia holiday destination on online tourism

magazine Smart Travel Asia in 2014 based on many criteria such as travelers

feedback, cultural diversity and the quality of tourism services.

Together with economic and social, environmental earning is an essential assessed

component in achieving sustainability which is consistent with TBL. Environmental

measures of yield in tourism are the concern about the ecological footprints, waste

production, greenhouse gases, the exploitation of natural resources and regional

heritage conservation. In the other case, Sustainability Reporting Guidelines (1999)

pointed out that measurement concentrating on environmental indicators are total

energy use, the use of recycled materials, water sources significantly affected by the

organization’s use of water. On the first achieving step, some eco-friendly

accommodations in Da Nang, typically, Eco Green Boutique Hotel, were built with

sustainable and environmentally-friendly materials and run by solar energy.

4. Governance Interest & TBL

According to Dinica, "Governance for sustainable tourism starts with the definition of

what is to be influenced and how to prevent negative resource impacts." ​(Dinica,

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2011). In general, government involvements in tourism development provides

opportunities and benefits for economic growth. With the interdisciplinary and

diversified nature of tourism, investment in infrastructure, real estate, and related

industries not only promotes regional economic development but also creates a solid

foundation for the enhancement of tourism industry. In detailed, Da Nang city

attracted 461 foreign direct investment (FDI) projects in 2017, and more than 60

percent of new projects are tourism and real estate. Besides strengthening the

tourism attraction, the use of foreign direct investment provides employment

opportunities for local people, as well as enabling local businesses to learn and

cooperate sustainably. Another great benefit of the local government's call for foreign

direct investment in the process of transferring and acquiring science and technology

from abroad. This action does not only save a budget but is also a foundation for

sustainable development in different industries, so that the development and

enhancement of the tourism industry will be more proactive and convenient.

According to Halleux,” "Tourism can put pressure on and greatly affect the

development of the environment. Potential adverse effects of tourism development

relate to three main areas: exhausted natural resource; air and water pollution; and

physical impacts, often associated with the degradation of ecosystems". Predictably

the threats from the consequences, the local government has made decisive moves

to protect and maintain the environmental development. After nearly ten years of

implementing the project "Building Da Nang - environmental city," Da Nang has

made significant changes in the environment, solving many hot spots of pollution.

The project follows three primary goals to 2020: improve and meet the requirements

of water and air quality, quality of life of local people và domestic and foreign visitors;

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prevent pollution and environmental degradation and finally, ensuring all citizens,

organizations, and individuals from domestic or abroad to do business and live in Da

Nang city is conscious of environmental protection. Visitors usually evaluate the

ecological issues at the destination; therefore, building and maintaining a clean

environment takes a vital role to make the goal more attractive.

5. Service Provider Interest & TBL

In the current society in general and the tourism industry in particular, improving and

developing services are always the first concern of businesses. According to Badler,

services are an essential factor determining the existence of that business in the

present and future (Badler 2004). Thus, the critical perspective that most service

providers are focusing on is how to satisfy and meet the needs of the customer;

however, the condition of achievement is the customer needs are known in detailed

(Țîțua, Răuleaa & Țîțu 2016). In fact, this is the problem in Da Nang city - one of the

cities with the robust tourism industry development in Vietnam. As reported by Da

Nang Today, although this city has taken several practical solutions to diversify the

local tourism, lacking tourism support services causing the shortage of staying in

both domestic and international tourists. ​("More tourism support services needed",

2018) ​Many sources have noted that in recent years the number of visitors to the city

has increased, and their purpose is increasingly diversified such as seeking

investment opportunities and healthcare services. Specifically, the city carries out the

necessary and essential functions of tourism such as transportation; it is not enough

to make the tourism sector sustainable development when services support

professional tourism on accommodations and in the local area are not yet taken into

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consideration. Tourism is a highly interdisciplinary industry, and sustainable tourism

development requires an understanding of the interrelationships and interactions

among multidisciplinary forces to achieve excellent service quality because providing

high-quality services is the opportunity to build customer loyalty - one of the critical

elements of sustainable tourism.

In short, tourism service providers have strong interrelationships and interactions

with the social development. Once the necessary and professional services are

provided on a regular basis, it not only boost the attraction of the destination but

life-condition of both visitors and local residents are improved and upgraded

significantly and more likely, the region's ability to attract foreign investment will be

more effective. Therefore, couple of practical actions that Da Nang needs to do is to

build links among different service providers and improve the service quality of each

sector to achieve the best results.

6. Visitor Interests and TBL

Among four primary stakeholders, tourists are considered as the main catalyst being

able to change the whole tourism system due to their travel taste over the time.

Visitor interests refer to the whole set of the economic, social and environmental

performance of organizations that is displayed in the TBL concept. A synthesis of

each aspect creates the complete image of tourists over the specific destination, in

this case, it is a central coastal city of Da Nang.

From the perspective of tourists, all the things they need from the local economy is

the value of their money. Da Nang residents are undertaking quite well in providing a

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viable tourism industry which offers numerous price options of accommodations,

regional products, and local foods at the same time for visitors. Taking an overview

look on Tripadvisor, a reliable global tourism website, there is a rain of compliments

of tourists on the affordable price of goods and services they paid in Da Nang so

they willing to highly recommend for any tourists who are still hesitating about

making a plan to have a holiday trip in Da Nang.

The social aspect is definitely the most significant element in the TBL approach and

for some tourists, it is the only one concern whenever getting to their holiday

destination. That why fulfilled experience relies much on the relationship between

host and tourists. Traveling to Da Nang, people are provided many professional

tourism services by local lifeguards with the warm welcoming attitude of service

suppliers. A wide range of both traditional and international events held from the

beginning to the end is also contributed to strong growth in foreign visitors in Da

Nang. In 2018, Viet Nam News announced the launch of Danang FantastiCity, the

first chatbot app of Vietnam tourism, which allows the easy access of tourists to

almost key information related to Da Nang.

Ultimately, the view of tourists on the environment basically is the attractive natural

surroundings. In tourists eyes, Da Nang is a secure, clean and civilized destination

where the natural and man-made landscapes are well preserved. It is clearly

recognized that Da Nang has a well-organized and plan on beautifying some major

streets running along the coast with the environmentally friendly practices. However,

“Many foreign tourists have negative perceptions of Da Nang as a tourist destination.

Commonly-raised comments included the ‘dirty beach’; and the ‘industrial’ character

of the City” (Mitchell & Phuc 2007, p. 34).

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7. Host Community Interests and TBL:

The resident is one of four main stakeholders, playing a really important role in the

development sustainable of tourism industry. Although tourism is widely concluded

as a potential market, there are still distress that it would cause a negative effect on

local people’s quality of life ( Andereck, Valentine, Knopf and Vogt, 2005) . To be

more specific, from the host community in Da nang perspective, there can be both

opportunities and threats that tourism bring back in terms of economic, societal and

environmental aspect.

On the one hand, tourism had brought many personal benefits for people living

here. In Da Nang, according to a local tourism officials agency, it is estimated that

this year in the first nine month, over five million people visited and more surprisingly,

one-third of them were international guests (South China Morning Post, 2018).

Besides, there are more and more backpackers that need cheap accommodation

while traveling, so the appearance of airBnB not only helps the residents to increase

their revenue but tourists using this service can also save a lot of money. When Da

Nang became famous and attracted many foreigner tourists and investors, the

money came from tourism would help the resident to decrease tax burden as well as

improve infrastructure of the city such as road, airport.

Liu and Var (1986) had observe and concluded that the negative sides when a place

became a tourist attraction was the increase in cost of living. Dogan (1989) had

written that tourism industry had effect on some characteristics of residents such as

habits, daily routines, social lives, beliefs, and value. Besides, high levels of tourism

visited in Da Nang, according to Perdue, Long and Gustke (1991, p.1058), “there is

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often an increase in population as a result of new residents relocating from outside

areas”. “These factors may, in turn, lead to psychological tension” (Andereck,

Valentine, Knopf and Vogt, 2005, p.1059). Another bad impact of tourism is the

environmental damage would happen if there is poor management in Da Nang

government. For example, poor management would lead to increasing in air and

water pollution, wildlife hunting, trapping and fishing in any developing city.

To summarize, tourism development had bring more benefit to Da Nang than the

negative impacts.

8. Conclusion

To sum up, these four major stakeholders play important roles in contributing to Da

Nang’s sustainable tourism development. For government, they are pilots to steer

and make important decisions to enhance the regional economic development and

promote for the image of Da Nang. However, they need to be strict in protecting the

environment to reduce the damage of air, water and wildlife. To service provider,

they are the main factor to meet the needs of the customers about services,

healthcare. The more professionally they are, the more Da Nang will attract visitors

and investors. In terms of “host community”, they are not only the very significant

factors in contributing to the sustainable development of any destination, but also the

factor which represents for the image of Da Nang. However, they should be trained

to be more professional in behaving to visitors and having enough skills , knowledge

to develop their regional tourism industry. Each one has their own tasks and

influences. A tourism industry of any destination cannot be sustainable without those

stakeholders.

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Reference:

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364-369.

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