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Tourism is a leading economic sector in some countries. The industry generates billions of dollars for most economies and causes millions of people to travel around the world (OECD 2008). In the past few years, the tourism industry has grown tremendously.
However, this growth has caused a significant strain on the environment. For example, the tremendous growth of tourism activities in Goa, India, has caused a significant strain on the region’s water resources (Alexander 2002). The same situation replicates in several other tourist destinations around the world (Alexander 2002).
The emergence of the above problem has led to the growth of eco-tourism and the development of “green” hotels (Black 2007). Since eco-tourism is nature-oriented and environmentally focused, hotels that thrive on this concept have received several environmental certifications (Black 2007).
Hotels receive these certifications after they demonstrate compliance with specific environmental standards (like energy use, water conservation, and the likes). While the cost of “going green” may be negligible for most big hotels, some hotel owners question the importance of working to receive environmental certifications.
Some hotel owners believe that “going green” is just a moral issue and not an economically justifiable strategy. Such hotel owners also believe that environmental certification standards do not necessarily increase hotel occupancy (which is their greatest concern). Other hotel owners believe that environmental certification is an important tool for increasing hotel occupancy.
This paper sides with the latter argument by demonstrating that environmental certification standards increase hotel occupancy. This paper further demonstrates that hotel guests appreciate the incorporation of “green” practices in hotel activities.
This way, hotel guests are more likely to prefer staying in hotels that adopt environmentally friendly practices. Finally, this paper demonstrates that the sheer size and growth of eco-tourism industry provides a strong indication that environmental certification increases hotel occupancy.
Growth of Eco-tourism
The growth of the eco-tourism industry is undisputed because most tourists today say hotels should be environmentally responsible (Honey 2008). Certainly, many tourists say that a hotel’s level of environmental responsibility is a key decisive factor in determining where they would like to stay (Honey 2008). A recent study showed that more than two-thirds of American and Australian tourists said they were attracted to hotels that demonstrated a strong commitment to protect the environment (Eco-Green Hotel 2013). About 90% of British tourists also shared the same opinion (Eco-Green Hotel 2013). According to the expectations of hotel patrons, eco-tourism sits at the centre of conservation and the protection of local interests in tourism. Hotels owners also enjoy increased profitability as shown below
Figure 1: Eco-tourism (Source: Mader 2013)
From the above diagram, eco-tourism stands as a pivotal and conscious formula for sustainable tourism. Its strategic importance has gained acceptance among most people. Eco-Green Hotel (2013) says, “96% of Condé Nast Traveller readers think hotels and resorts should be responsible for protecting the environment they operate in.
About 74.5% of the readers say a hotel’s environmental policy influences their decision to stay there” (p. 2). Eco-Green Hotel (2013) also says that eco-tourism grows by about 5% annually and about 12% of all tourism spending stems from eco-tourism.
The global growth of the eco-tourism industry demonstrates that environmental certification increases hotel occupancy. Indeed, as demonstrated in this paper, eco-tourists appreciate the adoption of “green” practices in hotels. They would therefore shun hotels that insist on undertaking environmentally unfriendly practices for hotels that adopt environmentally friendly practices.
The preference for “green” hotels stem from increased customer satisfaction through “green” initiatives (Matias 2009).
For example, J.D Power and associates (a research frim) did a study in 2008 to evaluate the level of guest satisfaction in North American hotels and found that the adoption of “green” practices at the hotel significantly increased guest satisfaction (about 66,000 guests participated in the study) (Eco-Green Hotel 2013).
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The size and growth of the eco-tourism industry shows eco-friendly hotels cashing-in on increased occupancy rates because eco-tourism forms a huge portion of the global tourist market (Matias 2009). In fact, the United Nations World Travel Organisation says that 7% of the world’s tourists are eco-tourists (Centre for Responsible Travel 2012).
According to several independent tourism agencies (like Travel Weekly), the proportion of eco-tourism may grow by up to 25% by the end of 2013. The value of the sector is equally expected to grow by close to $500 billion annually (Centre for Responsible Travel 2012). These figures translate to more hotel occupancies for environmentally certified hotels.
Support of Federal and State Businesses
The Centre for Responsible Travel (2012) reveals that state and federal governments are adding to the market for eco-certification in the hotel industry (thereby increasing hotel occupancies). A member of EcoRooms & EcoSuites’ Board of Advisors recently said that they have witnessed a new push among federal and state governments to demand that government employees stay in eco-certified hotels (Eco-Green Hotel 2013).
Usually, most of these governments adopt this strategy when they have a conference or a meeting at a hotel (Weaver 2001). For example, in 2007, the governor of Florida stated that all state meetings and conferences should occur in eco-certified hotels. Eco-Green Hotel (2013) says, from this requirement, “With the stroke of a pen, Governor Crist started a veritable stampede of hoteliers scrambling to earn “green” certification for their properties – and achieve a competitive advantage when jockeying for state business” (p. 10).
The commitment by federal and state governments to prefer eco-friendly hotels over other hotels also mirror the same preference as observed in many corporate organisations. This observation forced Entrekin (2011) to admit that attracting corporate clients may provide the right motivation for hotels to seek environmental certification.
This push emanates from the commitment by many managers to brand their organisations as “environmentally conscious” (Cheverton 2006). This phenomenon presents a win-win situation for hotels and companies alike because companies benefit from positive brand recognition, while hotels benefit from increased occupancy numbers (Cheverton 2006).
Many organisations therefore prefer their employees and business associates to hold meetings and conventions in eco-friendly hotels. In fact, Entrekin (2011) says “Organisations such as Meeting Professionals International, the Convention Industry Council, and the Green Meeting Industry Council all encourage their members to partner with eco-friendly hotels” (p. 7).
Some managers take an extra step of requiring their employees to have a sustainable event measurement tool to assess the environmental impact of their meetings. They are required to present their findings to their superiors. Comprehensively, these efforts contribute to the construction of a good public relation profile for companies that would want to brag about being environmentally sensitive.
The Vice President of Green Seal Organisation (an environmental certifying company) recently revealed that less than 30% of hotels have received an environmental certification (Entrekin 2011). Most of the hotels have a few environmentally friendly practices, but they lack environmental certification.
However, the few hotels that have received these certifications enjoy high occupancy rates. Indeed, managers that have received environmental certification in their hotels have used their new status to improve their sales and increase their occupancy rates, with a high degree of success (Honey 2002).
However, this success is “old” because past studies showed that there was improved business after hotels adopted environmentally friendly practices (Honey 2002). From this analogy, many hotels around the world have attested to the improvement of value addition services through environmental certification. One such hotel is the Rezidor Group of Hotels.
The Business Director of Rezidor Group of Hotels recently affirmed that the company would construct 50 environmentally certified hotels because they have witnessed an increased demand for services in their eco-certified hotels (Centre for Responsible Travel 2012). The company therefore believes that eco-certification is increasingly becoming a pivotal part of their responsible business program.
The same commitment reverberates across other international hotel groups such as the Hilton group of hotels, which aims to meet the growing demand for tourism services by adopting more environmentally sustainable ways. The President and CEO of Hilton Hotel Group recently said
“To meet the growing demand of increased travel around the world, we must be able to do so in a sustainable fashion, while still delivering unsurpassed levels of hospitality. Not only is it the right thing to do as responsible global citizens, it is the right thing to do for our business” (Centre for Responsible Travel 2012, p. 2).
Kimpton Hotel Group is also another example of a hotel group that has demonstrated the benefits associated with environmental certification. The manager of the hotel proudly references a past study, which showed that close to 30% of hotel customers said that a hotel’s environmental record was highly likely to influence their decision for choosing the right hotel to patron (Entrekin 2011).
The manager’s reference premises on the philosophy that sustainable environmental changes only make sense when hotels benefit from the change. Through the increased sales and increased numbers of hotel occupancy, the managers of Kimpton Hotel say that adopting environmentally friendly service is important for hotels, now more than ever (Entrekin 2011).
As the above trend demonstrates, Kimpton Hotel is one among many groups of hotels that have enjoyed increased profitability by receiving environmental certification.
The President of Green Hotel Association recently revealed that some of the hotels within their association have seen their occupancy rates rise by about 400% (Entrekin 2011). These positive results prevailed even as the 2008 global economic downturn had a negative impact on most economies.
Lastly, the strong relation that environmentally sensitive practices share with high occupancy rates manifest even in hotels that are not fully certified, but comply with environmentally friendly practices.
For example, Destination Hotel and Resort (a hotel group in the US) has not received environmental certification, but it still boasts of embracing environmentally friendly practices (most of its core practices are however geared towards environmental certification) (Entrekin 2011).
Even without the official environmental certifications, Destination Hotel and Resort has increased its occupancy rates by marketing itself as “Destination Earth” (an environmentally friendly brand). The company manager retorted, “We have had many group clients choose to stay at our properties because of our commitment to the environment” (Entrekin 2011, p. 4).
From the increased occupancy rates that “green” certification introduces in the hospitality industry, Eco-Green Hotel (2013) says,
“The hotels that achieve certification identify themselves as leaders in green practices, energy conservation, and a sustainable future. There is no question, then, that earning some type of green certification is imperative – not only for the health of the environment but also for a hotel’s future” (p. 11).
Conclusion and Recommendations
Environmental certification increases hotel occupancy. Certainly, besides the development of a positive brand image, environmental certification helps hotels to attract more guests. The growth and development of the eco-tourism industry is testament to the increased appreciation that many hotel customers have towards the adoption of environmentally friendly practices in hotels (White 2012).
Increased guest numbers provide just one advantage of environmental certification because the decision to adopt environmentally friendly practices aim to elevate the environment as the biggest winner.
Hotels only cash-in on the trend because more people and governments are becoming environmentally conscious. From this analysis, it is correct to say, environmental certification increases occupancy rates, and hotel owners should explore ways of receiving these certifications for increased sales and profitability.
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