Eco-Conscious Choices Investigating Consumer Willingness to Pay Premiums for Green Hotels

1. Introduction

Sustainability concerns and growing environmental consciousness have caused a major shift in the hotel sector in recent years. In response, the idea of “green hotels” has come to light as a viable way to lessen the negative effects that travel and housing have on the environment. Green hotels, sometimes referred to as eco-friendly or sustainable hotels, use a variety of strategies to cut down on waste production, encourage environmental preservation, and use fewer resources (Font et al., 2016). These practices cover a broad variety of activities, such as waste management, the use of renewable resources, the use of eco-friendly technologies, and the saving of energy and water (Han, Hsu, & Sheu, 2010). Green efforts in the hospitality industry are adopted and successful in large part due to the attitudes and behaviors of consumers (Lee & Hsieh, 2013). Sustainability, social responsibility, and ethical considerations are some of the variables that impact customers' preferences and purchasing decisions as they grow more environmentally conscious (Acharya & Meena, 2019). As a result, understanding customer willingness to pay premiums for eco-friendly goods and services, including green hotels, is of increasing interest to researchers, practitioners, and policymakers (Laroche et al., 2001).

The maximum price that people are prepared to pay for products or services that have social or environmental advantages above and beyond those offered by traditional alternatives is known as consumer willingness to pay (WTP) (Menon & Menon, 1997). The degree to which customers are prepared to pay more for green hotels' environmental features is still up for discussion and empirical research, even with their increasing appeal (Han, Hsu, & Sheu, 2010). While some research indicates that travelers are prepared to pay more for eco-friendly lodging (Berezan & Raab, 2015), other studies demonstrate that this readiness is restricted, particularly when faced with greater costs or conflicting objectives (Font et al., 2016). There are many different individual, sociodemographic, and situational factors that affect consumers' willingness to pay for green hotels (Chen & Tung, 2014). These variables could be beliefs about the advantages of eco-friendly activities, income levels, attitudes and knowledge about the environment, and travel motivations (Kim et al., 2018). Promoting sustainable tourism and accommodation practices requires hoteliers, legislators, and sustainability advocates to have a thorough understanding of customer readiness to pay premiums for green hotels (Lee & Hsieh, 2013).

Stakeholders can boost the market competitiveness and profitability of green hotels while promoting environmental conservation goals by developing focused strategies based on the identification of consumer WTP factors and barriers (Han, Hsu, & Sheu, 2010). Furthermore, the design and promotion of eco-friendly efforts can be informed by consumer preferences and behaviors, allowing hotels to successfully convey the value proposition of their green offers to environmentally concerned customers (Berezan & Raab, 2015). Given the significance of consumers' willingness to pay more for environmentally friendly hotels, the goal of this book chapter is to present a thorough assessment and analysis of the body of research on the subject. This chapter aims to clarify the factors, incentives, and difficulties related to consumer WTP for eco-friendly lodging accommodations by utilizing empirical research, theoretical frameworks, and real-world observations. The chapter aims to contribute to a deeper understanding of consumer behavior in the context of sustainable tourism and hospitality through a synthesis of research findings and critical discussions. It offers useful implications for industry practitioners, researchers, and policymakers alike (Chen & Tung, 2014).