Key Hospitality Policy and Regulatory Changes
United Nations
In April, the United Nations General Assembly held a second thematic event focused on tourism and the sector’s critical role in advancing sustainable development goals.
World Economic Forum
In May, the World Economic Forum published its Travel & Tourism Development Index 2024. The highest-ranked economies are the United States, Spain, Japan, France, Australia, Germany, the United Kingdom, China, Italy, and Switzerland.
Fighting over-tourism
Over-tourism has become a prevalent issue worldwide. In June, Greek Prime Pinister Kyriakos Mitsotakis called for restrictions to be put in place in 2025 for cruise lines on the number of ship calls, particularly for islands Mykonos and Santorini. Additionally, Amsterdam has banned the construction of new hotels. Under the new rules, there will be no more than 20 million hotel overnight stays by tourists per year, and building a new hotel in Amsterdam will only be allowed when another hotel closes.
Many locations are also introducing a tourist tax. In March, Seville’s mayor announced plans to close the Plaza de España and charge tourists to finance its conservation. Additionally, the Icelandic government reinstated an accommodation tax for visitors that applies to hotel rooms, campsites, mobile homes, and cruise ships. In April, a pilot programme for taxing day-trippers was put in place in Venice, and Barcelona’s tourist tax was also increased. This comes after a drought emergency was declared in Barcelona in February, which stoked resentment against tourists.
The EU elections took place in June. The new Parliament will meet for the first time on 16 July. Ursula von der Leyen has been endorsed by heads of state for a second mandate as President of the European Commission. Her re-election depends on the EU Parliament's vote. The new Commission will be in place after the summer and a new policy agenda will be decided in the autumn.
Green Claims Directive
In March 2023, the European Commission published a proposal for a Directive to address misleading and false voluntary environmental labels and claims made by companies about their products and services (greenwashing). The Directive complements the proposal for a Directive on empowering consumers for the green transition.
Why it is important
The proposal aims to ban unsupported claims to protect consumers when buying suitability-oriented products and services. As a result, businesses wanting to publish explicit environmental claims will be required to conduct extensive assessments (third-party verification) and provide documentation to support the claims. Businesses outside the EU that operate and sell products to EU customers must comply with the Directives.
Businesses that fail to comply are exposed to civil and criminal liability. In light of this, your company should consider:
Reviewing ESG and communication strategy
Addressing potential gaps
Preparing for implementation
Next step
After the EU Parliament voted on the proposal in March, the EU Council adopted its proposal in June. The Council will now start the negotiations with the EU Parliament on the final version of the Directive. Negotiations will begin with the new Parliament in July. Once the Directive becomes law, Member States have 24 months to incorporate it into national legislation.
For an analysis of green claims and the travel sector, you can read here.
Corporate Sustainability Due Diligence Directive (CS3D)
In February 2022, the European Commission published its proposal for a Directive on corporate sustainability due diligence, setting into law obligations for large companies with significant activities in the EU to conduct human rights and environmental due diligence in their operations and across their chains of activities inside and outside Europe. Companies within the Directive’s scope:
Large EU limited liability companies & partnerships: +/- 6,000 companies - >1000 employees and >EUR 450 million turnover (net) worldwide.
Large non–EU companies: +/- 900 companies - > EUR 450 million turnover (net) in EU.
Micro companies and SMEs are not covered by the rules. However, the Directive provides supporting and protective measures for SMEs, which could be indirectly affected as business partners in value chains.
The final proposal was approved by the Council in March 2024, and adopted by the EU Parliament in April.
Why it is important
This complex legislation requires in-scope companies to undertake risk-based human rights and environmental due diligence to identify and assess actual and potential adverse impacts, and prevent, mitigate, and bring them to an end in their operations and “chain of activities”.
Next step
Member States have two years to incorporate the CS3D into national legislation and comply with the Directive. The largest in-scope companies will be required to comply with the Directive within three years, with obligations for smaller companies taking effect in later years.
For an overview of the key elements of the agreed directive and the compliance obligations for businesses, you can read here.
Energy Performance of Buildings Directive
The revised Energy Performance of Buildings Directive (EU/2024/1275) aims to reduce greenhouse gas emissions and energy consumption in buildings by introducing harmonised renovation targets, more stringent rules on energy performance certificates and voluntary renovation passports, and promoting renewable energy, sustainable mobility and smart buildings.
Why it is important
The new standards will have an impact on the construction and renovation of new and existing buildings. The Directive identifies what types of materials and heating systems are used in buildings, what type of energy is used to power them, and how their energy efficiency and greenhouse gas emissions are assessed via energy performance certificates (EPCs). EPCs must be determined based on either calculated or metered energy use (set as primary energy use in kWh/(m2/y)) and take into account the building typology. Details are left to the Member States. Hotels are one of the nine building categories identified by the Directive.
Next step
The EPBD entered into force in May 2024. Member States will have to embed these measures in national building renovation plans by May 2026 which must also include financial incentives and advisory support to building owners and users.
Forced Labour Regulation
In September 2022, the EU Commission proposed new rules to prohibit the placing and making available on the EU market, or the export from the EU market, of any product made using forced labour. In April 2024, the European Parliament voted in favour of the Regulation.
Why it is important
The Forced Labour Regulation is intended to operate alongside other existing or future due diligence obligations, such as the CS3D (see above), so it does not impose additional due diligence obligations on businesses in relation to forced and child labour. However, businesses will need to have in place clear policies and processes to identify, monitor and (where necessary) address any instances of forced or child labour in their operations and value chains.
Next step
The Regulation is awaiting to receive final formal approval from the EU Council, which is expected to happen in the autumn. The Regulation will then be published in the Official Journal. The Regulation will take effect three years after it enters into force, in 2027.
Biodiversity Net Gain - UK
In February 2023, the government published the Biodiversity Net Gain (BNG) guidance, which requires that habitats for wildlife are left in a measurably better state than they were before the development. Under the Environment Act 2021, BNG makes a 10% biodiversity net gain mandatory for all but exemptions and small sites from 12 February 2024, and for small sites from 2 April 2024. BNG solutions will have to be part of planning applications. After planning is granted any new development must have a Biodiversity Gain Plan. These new requirements are likely impact budgets for any new developments.
Climate litigation on the rise
In June, the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science published Global trends in climate change litigation: 2024 snapshot, a report showing an increase in litigation cases for climate change, greenwashing, supply chain, and ESG.
Parliamentary inquiry into hospitality recruitment and retention
Before the announcement of a general election on 4 July, the All-Party Parliamentary Group (APPG) for Hospitality and Tourism launched an inquiry into ‘recruitment and retention of staff in hospitality’. The APPG is likely to revamp this inquiry once the new Parliament has been elected and new MPs appointed as members of the APPG.
Labour policies
The newly elected Labour government will look into implementing its manifesto pledges about replacing business rates and reforming the Apprenticeship Levy.
Canada’s new greenwashing legislation
By amending the Competition Act, the Canadian government has recently introduced a series of new laws (Bill C-59 amendments) aimed at tackling greenwashing, or unsupported claims by companies about the environmental benefits of their products or business activities. Similarly to the Green Claims Directive, the Canadian law creates new legal liability for companies and businesses in breach of the new rules that could result in fines.
Fighting Against Forced Labour and Child Labour in Supply Chains Act (Canada)
The Act came into force on 1 January 2024 and aims to prevent forced and child labour in supply chains by having businesses submit an annual report regarding the measures they have taken to combat them. It also includes new penalties for companies that fail to make these reports, or if the reports include misleading statements.
No Hidden FEES Act (US)
In June, the US House of Representatives passed the No Hidden FEES Act, supported by the American Hotel & Lodging Association, to ensure transparent lodging fee displays. This new law would create a uniform requirement for clear and obligatory display of fees across various accommodation services including short-term rental platforms, online travel agencies, metasearch websites, and hotels.
Tourist visa launch
The members of the Gulf Cooperation Council (GCC) have unveiled plans for a common tourist visa set to launch by late 2024. This visa will enable seamless travel across its six member states: Saudi Arabia, Kuwait, Qatar, the UAE, Oman, and Bahrain. The initiative aims to bolster the tourism sector across the region.
Nigeria reviewing tourism policies
The Federal Government of Nigeria is reviewing tourism policies to standardise hotels to attract tourists and investors into the country. In May, the Minister of Tourism, Lola Ade-John spoke at the seventh Annual Master Lecture Series 2024 organised by the National Institute for Hospitality and Tourism (NIHOTOUR), and said the efforts are part of President Bola Tinubu’s Renewed Hope Agenda to create job opportunities, improve practices, and increase revenue in the tourism industry.
China’s attempt to boost international tourism
Chinese authorities have ordered hotels to stop turning away foreign travellers. Over the past few months, China has also introduced six new measures to improve visa policies and five new measures to facilitate visits to China by foreigners. The China Hospitality Association released a proposal, urging the country's accommodation sector to align more closely with global standards, including expanding overseas booking options and simplifying payment processes via international credit cards.
Indian interim budget
In February, Indian finance minister, Nirmala Sitharaman, announced long-term interest-free loans to states for developing iconic tourist centres. The Interim budget 2024-2025 includes policies that will support the demonstrated resilience of the sector and foster the expansion of hotels to bridge the huge gap between the supply of rooms and their corresponding demand.
Assam Tourism Bill
In February, the Assam government introduced the Assam Tourism (Development and Registration) Bill to revitalise and promote the tourism industry of the state. The bill proposes regulation of certain tourism businesses, as well as penalties for various offences. It also seeks to address several critical aspects of tourist management and infrastructure development.
Maharashtra Tourism launched
In February, the Department of Tourism of the Government of Maharashtra, announced its ambitious plan to enhance travel and trade opportunities in Maharashtra. Maharashtra Tourism aims to leverage its unique cultural, historical, and natural assets to attract domestic and international visitors while promoting business and trade collaborations within the state.
Rajasthan’s Tourism Unit Policy delayed
In May, Rajasthan’s Tourism Unit Policy 2024 was delayed again, having been in the works for two years. The policy aims to liberalise the tourism sector by allotting industrial plots for tourism units, allowing farmhouses to operate as homestays, and recognising restaurants as manufacturing companies.
