Preferences and Willingness to Pay for Green Hotel Attributes in ...

Journal of Travel & Tourism Marketing, 31:937–957, 2014 © 2014 Taylor & Francis ISSN: 1054-8408 print / 1540-7306 online DOI: 10.1080/10548408.2014.895479

PREFERENCES AND WILLINGNESS TO PAY FOR GREEN HOTEL ATTRIBUTES IN TOURIST CHOICE BEHAVIOR: THE CASE OF TAIWAN Chou Chia-Jung Chen Pei-Chun

ABSTRACT. Although many companies in the hotel industry aim to pursue more sustainable and socially responsible practices, the present literature shows mixed results with regard to tourist reactions to such moves, especially for the service quality perception impacted by implemented green practices and the willingness to pay more for such actions. Unlike previous research examining tourists’ preferences for separate green hotel attributes, this study identifies the determinants of tourists’ choice of green hotel attributes. Additionally, the study measures the willingness to pay (WTP) for such services, in the context of the Taiwanese market, using the stated preference of combined green hotel attribute scenarios. A multinomial logit (MNL) model is employed to estimate the relative influence of behavioral and facility attributes on choice behavior. Furthermore, the study examines determinants influencing respondents’ choice of green hotel attributes. A latent variable class model (LVCM) approach is applied in the estimation of the unobserved heterogeneity, and a total of 390 valid respondents were used in the analysis. The empirical MNL results indicate that while tourists prefer luxury rooms and the provision of personal toiletries, they are also willing to accept reduced service quality. Additionally, sex, income, and age have significant influences on tourist choice behavior. The results of the LVCM model demonstrate that respondents with high levels of the green consumption trait are more likely to choose hotels that have a greater number of environmentally friendly attributes. The implicit amount that tourists are willing to pay for room quality is around US$13, for the provision of personal toiletries is about US$22, and for service quality is US$12, but they also require a discount of approximately US$11 in order to accept the common practices of green hotels. This study is useful in providing the hotel industry and government with quantitative information that can be used to develop and implement better green hotel policies.

KEYWORDS. Choice experiment, environmental hotel, green consumer behaviors, green marketing, stated preference

INTRODUCTION In recent years the hotel industry has paid increasing attention to environmental issues,

and a number of studies lately examined related initiatives and practices in hotels in Austria (Bastič & Gojčič, 2012) and the USA

Chou Chia-Jung is Associate Professor, Department of Hospitality Management, Tajen University, 20, Weixin Rd., Yanpu Township, Pingtung County, Taiwan (E‑mail: [email protected].) Chen Pei-Chun is Assistant Professor, Department of Tourism and Leisure Management, Vanung University, NO.1 Van-Nung Rd., Chung-Li, Tao-Yuan, Taiwan (E‑mail: [email protected]). Address correspondence to: Chen Pei-Chun, Department of Tourism and Leisure Management, Vanung University, NO.1 Van-Nung Rd., Chung-Li, Tao-Yuan, Taiwan (E‑mail: [email protected]). The article is supported by the research grant from the National Science Council in Taiwan (NSC 101 - 2410 H - 127 - 002 -). 937

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(Rahman, Reynolds, & Svaren, 2012; Zhang, Joglekar, & Verma, 2012). Moreover, this greening trend is becoming more widely embraced, with environmentally friendly attributes now deemed to be a basic part of a hotel’s services (Robinot & Giannelloni, 2010). Such practices are also evident in Taiwan. For example, the central government, local governments, and many hotels have begun to call for the implementation of green practices, encouraging guests to bring their own personal toiletries. Due to a long history of hotels – from the most basic budget type to the most luxurious – providing personal toiletries to guests in Taiwan, personal toiletries have symbolized the hotel’s standard service provision. According to the Environmental Protection Agency, Taiwanese hotels provide more than 4.2 million sets of personal toiletry items (mainly disposable toothbrushes and toothpastes) to hotel guests each year at a cost of approximately NT$ 2 billion (US$ 6.7 million). This figure represents abundant resources and the production of ample waste. Although only a small number of hotels in Taiwan demonstrate environmentally friendly practices (while there is a lack of official estimates, only about 300 of 2700 hotels have ever participated in the government’s promotion programs), these have become an industry trend, demonstrated in hotels’ online booking websites and promotion messages. However, the success of such initiatives depends on how willing guests are to accept the related changes to hotel services (Kasim, 2004; Zhang et al., 2012). Ayala (1995) states that the tourism and hotel industries need to adopt an ecological orientation and expand the definition of the quality of the services they provide to include their environmental impacts. Similarly, Batstič and Gojčič (2012) take an environmental view of “the ecocomponent of hotel service quality”. However, this presents some unique challenges for service industries, like hotels (Foster, Sampson, Sampson, & Dunn, 2000; Kassinis & Soteriou, 2008), because customers are present in the “production scenes” of service delivery and production, and this has effects on the design of the environmental measures adopted by such

facilities (Foster et al., 2000), as well as on how easily they will be accepted by customers (Chase, 1981; Foster et al., 2000; Kassinis & Soteriou, 2008). Green hotels should thus aim to satisfy customer needs without compromising service quality (Bastič & Gojčič, 2012; Foster et al., 2000; Goodman, 2000; Schendler, 2001). Since guests play an important role as co-producers of a hotel’s green actions (Kassinis & Soteriou, 2008; Zhang et al., 2012), consumer attitudes, along with expectation of service quality and other variables, may all influence tourist preferences with regard to green hotels, as well as their intention to stay in such places. Previous studies indicate that tourists usually hold positive attitudes toward green hotels (Bohdanowicz, 2006; Chen & Peng, 2012; Han, Hsu, & Lee, 2009, 2010; Kasim, 2004; Manaktola & Jauhari, 2007; Millar & Baloglu, 2011; Tsai & Tsai, 2008). For example, over half the respondents in Dalton, Lockington, and Baldock’s (2008) survey stated that they had positive attitudes toward hotels adopting renewable energy sources in their operations. Nonetheless, in practice the actual behaviors of consumers when faced with green hotels is more complex (Kasim, 2004; Kim & Han, 2010), and the empirical results on the relationship between tourist attitudes toward green hotels and their purchase intentions are mixed and inconclusive (Chen & Peng, 2012; Han et al., 2009; Kasim, 2004; Lee, Hsu, Han, & Kim, 2010; Tsai & Tsai, 2008; Yeh, Tsai, & Huan, 2003). It has been argued that tourists look for enjoyment when they stay at a hotel, rather than an opportunity to participate in actions that further environmental protection efforts (Baker & Davis, 2010), and they are unwilling to face inconveniences, such as garages recycling, water saving, etc, as they adopt similar practices at home. Studies have also explored other factors which influence the intention to stay at green hotels, such as consumers’ environmental attitudes, concerns, and awareness, as well as subjective norms, perceived behavioral control, green consumption, daily environmental behavior, overall self image, and past

Chou Chia-Jung and Chen Pei-Chun

experiences in green hotels (Han et al., 2009, 2010; Han, Hsu, Lee, & Sheu, 2011; Kasim, 2004; Kim & Han, 2010; Kung & Tseng, 2004; Lee et al., 2010; Tsai & Tsai, 2008; Yeh et al., 2003). The empirical findings of such works reveal that environmental concern and green consumption behavior are good predictors of green hotel choices. As for the acceptance of the green attributes of hotels, the literature shows different degrees of acceptance for various practices (Kasim, 2004; Kim & Han, 2010; Millar & Baloglu, 2011; Robinot & Giannelloni, 2010), with, for example, a mixed level of acceptance with regard to guests bringing their own towels (cf. Kasim, 2004; Millar & Baloglu, 2011). With regard to the context of this study, tourists in Taiwan have been shown to have diverse responses to the green measures implemented at local hotels, ranging from acceptance to indifference, or even rejection (Fan, Lin, & Wang, 2012; Kung & Lee, 2002; Tsai & Tsai, 2008; Wang & Fan, 2007), with the latter often expressed along with the concern that such measures will lead to poorer service. With regard to hotel selection, environmental measures rarely play an important role, and tourists usually prioritize price, facilities, and enjoyment when choosing where to stay (Chen, 2002; Kasim, 2004; Manaktola & Jauhari, 2007; Yeh et al., 2003). In addition, several studies investigate the association between price rate and choosing green hotels, and especially whether guests should pay a premium to stay at such hotels (Han & Kim, 2010; Han et al., 2009; Han et al., 2011; Lee et al., 2010; Manaktola & Jauhari, 2007), pay the standard price while experiencing some inconveniences (Kim & Han, 2010), or get a concession on the standard room rate for accepting the hotels’ environmental practices (Wang & Fan, 2007). However, the empirical findings are inconsistent (Kang, Stein, Heo, & Lee, 2012; Kasim, 2004; Yeh et al., 2003), and the willingness to pay a premium may be influenced by a consumer’s level of environmental concern (Kang et al., 2012; Khan, 2003).

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The previous studies outlined above separately consider the factors related to consumers’ preferences with regard to willingness to pay, green measures, personal toiletries, and service quality. In other words, previous research does not clarify the relative weight, importance, or trade-offs among these factors within juxtaposed choice situations when people make purchase decisions. Also, previous studies only examine factors influencing the selection or intention of staying at a green hotel, not the green hotel attribute (Han et al., 2009; Kang et al., 2012; Kim & Han, 2010; Lee et al., 2010; Tsai & Tsai, 2008).While Millar and Baloglu (2011) used conjoint analysis and asked a sample of tourists to evaluate bundles of seven hotel room attributes, they only focused on specific room attributes instead of the overall experience afforded by a green hotel. For tourists in Taiwan, a combination of attributes such as room class, service quality, personal toiletries, and green measures, impact the decision of where to stay. In order to fill the research gap, this study aims to explore consumer preferences, assessments, and relative weight among these attributes, as well as the economic valuation of green hotel service attributes –WTP – in green hotel selection to better understand and promote more sustainable practices in the hotel industry. Despite several studies on green hotel attributes (Wang & Fan, 2007; Yeh et al., 2003), none consider the latent variables (i.e., environmental attitude and green consumer behavior) in the discrete choices model. Thus, another aim of this study is to estimate the extent to which the LVCM contributes to understanding the determinants of respondents’ environmental attitude and green consumer behavior in green hotel attributes choice behavior. Thus, this study adopts the choice experiments (CE) approach, a stated preference and discrete choice evaluation method, to construct and analyze the relative importance or weight tourists attach to green hotel attributes. In the absence of market prices, CE has been used to estimate the value of non-real market

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goods (Verma, Plaschka, & Louviere 2002; Verma, 2010). The adoption of CE in this work allows us to explore the relevant attributes and influencing factors that elicit economic values (WTP) from people who do not directly experience the changes resulting from green hotels in an attributes-integrated way. This differs from earlier studies that mostly adopted structural equation modeling (SEM) approaches. CE is similar to the contingent value method (CVM) or conjoint analysis. However, whereas CVM examines preferences with regard to a single option, CE investigates preferences when multiple options are combined, and thus provides more information that can be used to analyze the trade-offs that occur among attributes (Adamowicz, Boxall, Williams, & Louviere, 1998). Conjoint analysis asks the subjects to rank or indicate their degree of preference for one option, while CE asks them to choose one among two or more competing options. It is suggested, when trade-offs exist, that CE is more appropriate than CVM (Hanley, Wright, & Adamowicz, 1998). For example, Albaladejo-Pina and Díaz-Delfa (2009) use CE to examine accommodation choices in rural areas, and find that it can effectively reveal tourist preferences and thus be used to segment the market for further analysis. In addition, Crouch, Devinney, Louviere, and Islam (2009) adopted CE to model consumer space tourism choices, while this approach is now widely used in market research regarding tourism, hotel products, and restaurant product mixes (Verma, 2010; Brau & Cao, 2008). CE has also been applied to assess marginal willingness to pay (MWTP) (Albaladejo-Pina & Díaz-Delfa, 2009; Grutters et al., 2008; Hearne & Salinast, 2002) in order to better understand the relative value of the attributes considered in choices. Based on the work outlined above, the study examines the relevant attributes of green hotels, and undertakes a CE in order to explore tourist preferences with regard to these. It also analyzes the MWTP of each attribute of green hotels, and examines the influence of tourists’ backgrounds, environmental attitudes, and green consumption with regard to their green hotel choices.

LITERATURE REVIEW Green Hotel Services/Attributes Kim and Han (2010) described green hotels as being “environmentally responsible hotels that actively follow environmentally friendly guidelines, practice environmental management, implement diverse eco-friendly practices, institute sound green programs and commit themselves to achieving environmental improvement by displaying eco-labels or a green globe logo”. Regarding the practices of such hotels, Batstič and Gojčič (2012) delineate the following four aspects: environmentally friendly and healthy equipment, eco-behavior of hotel staff, efficient use of energy and water, and bio-food. In addition, Rahman et al. (2012) see the process of hotels going green as focused on five areas: energy management, waste reduction, recylcling practices, staff education, and green business (purchasing pracrices), in a work that analyzes the extent of such practices among North American hotels. Based on the service process concept of “line of visibility” presented in Grönroos (2007), the green service environment provided by green hotels (Chou & Pan, 2011) can be divided into two parts: the staff––guests interaction area, which includes service and production, service delivery, and servicescapes; as well as the invisible service-supporting area – what takes place behind the scenes. In this view, it is important that in addition to the hotel rooms, the backand front-office operations should also adopt environmentally sustainable practices (Zhang et al., 2012). For example, some actions are not easily perceived by hotel guests, such as the enactment of environmental policies, environmental management programs, employee environmental training, energy saving measures, green purchasing practices, waste control, better water usage, less chemical use, waste water treatment, and so on. Most of these measures are unseen by guests, although hotels may publicize them in order to create a better image (Manaktola & Jauhari, 2007). In this study, a “green hotel” is defined as “a hotel that takes responsibility to minimize environmental impacts and adopts an environmentally oriented


approach toward land, resource use, purchasing, operations, and management”. Regarding the green practices of hotels in Taiwan, with the expectation of compulsory air/noise/water pollution control, these are voluntarily implemented. The officially certified environmental hotels in Taiwan are regulated by the Environmental Protection Agency based on seven measures: corporate environmental management, energy saving, water saving, green purchasing, reduction in the use of disposable products, waste reduction, and control of harmful materials. In practice, however, environmentally friendly hotels in Taiwan carry out actions that can be grouped into four dimensions as follows (Chou & Pan, 2011): (1) Encouraging guests’ environmental behaviors by announcing environmental programs and offering educational pamphlets. (2) Adopting environmentally friendly equipment and facilities, such as energy-efficient light bulbs or lighting systems, energy efficient air conditioners, recycling air conditioning waste air for heating water, waste recycling, and so on. (3) Green marketing programs, for example, discounts for arriving at the hotel by mass transportation, carrying personal toiletries, and so forth. (4) Environmental education and training for employees.

Tourists’ Response to Green Attributes of Hotels A better understanding of tourist responses to green services/attributes would be helpful in promoting environmentally friendly hotels. Manaktola and Jauhari (2007) find that consumers in India expect the service quality to be kept at a high level, even when hotels adopt green measures. In addition, guests who have a high level of environmental awareness may pressure hotels to take green actions (Foster et al., 2000). The experimental results of Kassinis and Soteriou (2008) show there is an interaction between service quality and environmental measures, and that this has an effect on customer satisfaction. Specifically, if hotels only adopt green measures then this has no impact on customer

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satisfaction, but if these measures lead to lower service quality then this leads to dissatisfaction. Tourist assessments of the importance of green attributes at hotels are rather varied. Batstič and Gojčič (2012) find that tourist perceptions of the eco-behavior of staff at green hotels is the most important factor in such assessments, followed by energy saving, environmental measures, and bio-food. They also find that income level, nationality, and hotel certification influence tourist expectations regarding the level of environmental performance that a hotel can achieve. Conversely, Kasim (2004) finds that the key green attributes that tourists place most importance on are, in order, fire-safety, energy saving, water saving, providing eco-tourism information, and finally, the use of recycling bins. Using the attribute mix method, Millar and Baloglu (2011) find that the relative weight of green attributes of hotel rooms is leading by green certification, and followed by linen policy, shampoo supply, energy-efficient light bulbs, recycling policy, and controlled lighting. In the case of Taiwan, although most tourists have stated that they accept green measures in hotels, inconsistent results have been found in several studies, particularly with regard to the need for guests to bring their own personal toiletry items (Fan et al., 2012; Kung & Lee, 2002; Tsai & Tsai, 2008; Wang & Fan, 2007). Fan et al. (2012) find that some green practices are “quality indifferent” to tourists, such as “refillable shampoo or body cleanser”, “all recycled paper used in room”, and “refillable sugar/cream in restaurant”. On the other hand, they find that several specific measures can be taken to raise tourist satisfaction, such as the use of recycling bins, recycled paper used for pamphlets, washable/recycled slippers, water saving facilities, energy-efficient light bulbs, and sensor-activated key cards. Moreover, Amendah and Park (2008) point out that the actual implementation of green practices can communicate positive messages to guests, and thus increase their acceptance of such actions and satisfaction with the hotel. However, if a hotel claims to be implementing environmentally friendly measures but does not in fact seem

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to be doing so, then this will increase consumer dissatisfaction with it.

Selection Attributes of Green Hotels Based on an extensive review of the literature on the attributes that consumers see as important when choosing a hotel, Chu and Choi (2000) conclude that the key items are cleanliness, location, room rate, security, service quality, and the overall reputation of the hotel. More specifically, business travelers perceive room quality and front desk service as the most important, while leisure travelers prioritize security. Based on the two works of the authors, Chu and Choi (2000) and Lockyer (2005), list the five major attributes that consumers consider when choosing a hotel as room quality, location, price, service quality, and facilities, while two studies carried out in a Taiwanese context highlight the importance of price and cleanliness (Chen, 2002; Yeh et al., 2003). Consequently, when tourists look to choose a green hotel, they may also consider whether the quality of the rooms or the rates have been affected due to implementing environmentally sound practices, and this can influence the perceived service quality. Comparing the markets for different sustainable product sectors, McDonald, Oates, Thyne, Alevizou, and McMorland (2009) demonstrate that while sustainability can be a determinant of purchase intention, there are often other, more decisive factors, such as price and convenience. Kasim (2004) examines tourists in a developing country, namely Malaysia, and finds that price, service quality, and a hotel’s physical attractiveness rather than certain environmental or social criteria, are the main reasons why people select specific hotels. In addition, many tourists prefer non-environmentally friendly services, such as individual soap cakes, fresh towels, and so on, while paying little attention to attributes such as environmental certification, conservation efforts, and the use of local food. Similarly, the results for studies carried out in Taiwan show that tourists rarely consider green issues when choosing a hotel (Chen, 2002; Kasim, 2004; Yeh et al., 2003), with price being the

first priority. Manaktola and Jauhari (2007) demonstrate that only 22% of tourists seek information about green hotels prior to making a booking, and although about 55% notice a hotel’s environmental actions, 23% stated that they paid no attention to such things.

The Factors Influencing Tourist Selection of Green Hotels Most previous studies positively conclude that the personal environmental attitude of consumers can have a favorable influence on the decision to stay in a green hotel (Han et al., 2009; Kang et al., 2012; Kim & Han, 2010; Lee et al., 2010; Wang & Fan, 2007; Yeh et al., 2003), except Tsai and Tsai (2008). Likewise, Chen and Peng (2012) find that knowledge about green hotels is a significant moderator of tourist intentions to stay at such hotels. Tourists with more knowledge would be more confident in choosing a green hotel, while those with less would be more hesitant to do so. Lee et al. (2010) claim that the decision to select a green hotel might be due to some “emotional benefits” from this action, such as the feeling of altruism. Moreover, tourists with a stronger environmental attitude are more likely to accept a lower level of convenience. Moreover, environmental concern is one of the factors that affects the willingness of guests to behave in an environmentally friendly manner when staying at vacation hotels (Mehmetoglu, 2010). Another view shared by many studies is that environmental awareness plays a key role in influencing green consumption or eco-friendly behavior (Do Paço, Raposo, & Filho, 2009; Mostafa, 2006; D’Souza, Taghian, & Khosla, 2007). The Roper organization’s (1990) survey indicates that green consumers are more likely to purchase environmentally friendly products, and environmentally conscious behavior is found to be associated with the selection of green hotels (Kim & Han, 2010; Yeh et al., 2003). Hotels that adopt green practices will have a better image and lower costs, which can both encourage tourists to stay at such places (Lee, 2006; Yeh et al., 2003).


Tourist Willingness to Pay for Green Hotels While the literature broadly explores the relationship between price and green hotels (Han et al., 2009; Kang et al., 2012; Kasim, 2004; Khan, 2003; Kim & Han, 2010; Lee et al., 2010; Manaktola & Jauhari, 2007), the results are inconsistent. On the one hand, a survey by Guadalupe-Fajardo (2002) finds that most Americans prefer, and are willing to pay premiums for, environmentally friendly hotels. In addition, two-thirds of the respondents in Fairweather, Maslin, and Simmons’s survey (2005), based in New Zealand, stated that they would be willing to pay more for green hotels. Likewise, Lee and Gan (2007) find that tourists in Taiwan are willing to pay more to stay at a green hotel in one of the country’s national parks; moreover, the most environmentally conscious group in their study stated that they would be willing to pay an extra 18% of the room rate in order to stay at a green hotel. What is more, hotel guests with higher levels of environmental concern are willing to pay more to support a hotel’s green practices (Kang et al., 2012; Khan, 2003). In addition, Kang et al. (2012) find that guests staying in luxury and mid-priced hotels have a greater willingness to pay premiums for green practices than those staying in economy hotels. Adopting a different perspective, Kim and Han (2010) find that tourists are willing to pay regular-hotel prices for a green hotel, in spite of the potential inconveniences associated with such places. Conversely, Kasim (2004) shows that tourists are not willing to pay more for a hotel with environmentally responsible actions. Similarly, Millar and Baloglu (2011) show that only 18% of their respondents are willing to pay more to stay in a green hotel, although 77.5% of them would stay in such hotels if the price were the same as that for a normal hotel. Furthermore, Manaktola and Jauhari (2007) report that consumers react differently to the cost liability of hotels taking green measures, with 33% of them stating that the cost of such measures should be borne by

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both the guests and the hotel, 52% state it should only be borne by the hotel, and 15% that it should be borne by the guest. Consumers thus generally see the cost of environmental measures as an investment by the hotel, one that will eventually lead to financial benefits for the business. In additon, it has been argued that a good environmental image will positively influence guests’ green behaviors when staying at hotels, as well as their intention to stay at such places, and willingness to give positive word-of-mouth and pay premiums (Han et al., 2009; Lee et al., 2010). In Taiwan, hotels often offer a price discount when guests are willing to participate in environmental actions, such as bring their own personal toiletries. In a study of several green hotel promotion alternatives, Wang and Fan (2007) find that guests preferred a “room rate discount” to “same room rate but breakfast provided”, “room package with local tour” or “same room rate but revisit discounted”. Nonetheless, the relationship between the promotional offers and tourist willingness to cooperate with green action remains unclear.

The CE Method Random utility theory is the theoretical basis of discrete choice models (McFadden, 1974), and is used in this research. The utility function is estimated using a MNL model based on the premise that choices are consistent with an independence from the irrelevant alternatives (IIA) property. IIA indicates that the ratio of choice probabilities for any two alternatives for any individual is entirely unaffected by the systematic utilities of either of the alternatives. Assuming utility-maximizing behavior by the decision maker, the indirect utility function U ij for each individual i who chooses alternative j in the choice set Ci can be expressed as: Uij ¼ Vij Xij ; Zi þ εij ¼ βX þ δZ þ εij

(1)

The utility function Uij can be decomposed into the determinant part Vij, which is typically

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specified as a function of deterministic components, including a vector of service attributes (X) and individual characteristics (Z). In addition, the error term εij, which represents the unobservable individual characteristics, can influence choices (Louviere, Hensher, & Swait, 2000). Furthermore, in this study, β represents a vector of coefficients estimated for individual preferences on green hotel attributes, and δ represents a vector of coefficients estimated for individual characteristics. The dependent variable of Equation (1) represents individual choice behavior and is a discrete variable. If Uij>Uik for all j ≠ k in the choice set Ci, then the probability that individual i will select alternative j over k is given by: PðjjCi Þ ¼ P Vij þ εij > Vik þ εik ¼ P Vij Vik > εik εij

(2)

The probability above depends on the hypotheses formulated about the distribution of the random vector of error terms. If the error term εij is independently and identically distributed (IID), Gumbell distributions will occur across the population (Ben-Akiva & Lerman, 1985), and thus a standard logit model, or MNL model, is applicable. With the MNL model, the probability P(j |Ci) can be expressed as:

expðVij Þ Pij ¼ P expðVik Þ k2Ci

LVCM Discrete choice models have traditionally presented an individual’s choice process as a black box, in which the inputs are the observed attributes of available alternatives and individual characteristics, and the output is the observed choice. The resulting models directly link the observed inputs to the observed output, thereby assuming that the inner workings of the black box are implicitly captured by the model (Walker & Ben-Akiva, 2002). However, the psychological factors affecting decisionmaking are generally not included in the utility function, which results in poor explanatory power (Ben-Akiva et al., 1999). To address such issues, researchers have worked to enrich choice models by modeling the cognitive workings inside the black box, including the explicit incorporation of factors such as attitudes and perceptions. Ben-Akiva et al. (1999) propose the LVCM, which integrates the choice model and latent variable models, as shown in Figure 1. Each part consists of one or more structural equations and one or more measurement equations. The LVCM explicitly models the latent variables that influence the

FIGURE 1. Integrated Choice Modelling Framework (Walker & Ben-Akiva, 2002) Explanatory Variables X

Utilities U

Choice Indicators Y Choice model

Latent Variables X*

(3)

Latent Variable Indicators I

Latent Variable Model


choice process. Structural equations relating the observable explanatory variables X to the latent variables X* model the behavioral process by which the latter are formed. While the latent constructs are not observable, their effects on indicators are. The measurement equation model is used to link the latent variables X* to indicators I.

MWTP MWTP is the amount of money that individuals are prepared to pay to retain their original utility levels prior to a change in one of the product attributes (Boxall and Adamowicz 1999). The MWTP, or implicit price, can be calculated by the ratio of individual coefficients, which is represented by the level of the attribute over the price coefficient (Rolfe, Bennett, & Louviere, 2000), as in Equation (4). For each attribute, the MWTP represents the marginal rate of substitution between the price and that attribute. Since the MWTP is expressed for all attributes in monetary terms, this allows for certain indications of their relative importance, as perceived by the respondents, when making decisions. MWTP ¼

@V =@x β ¼ attribute βprice @V =@p

(4)

METHODS

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Wang & Fan, 2007), willingness to implement environmentally friendly practices (Chou & Pan, 2011), and green measures (Amendah & Park, 2008; Kasim, 2004) were added to the CE design. Table 1 summarizes the attribute-level specifications for the CE. The stated preference survey conducted in this research was designed to obtain information on tourist preferences using a series of hypothetical green hotel facility choice questions. The following scenario was formulated for respondents: “When you travel for leisure, you can select your preferred hotel. Please select your best choice for a one-night double-bed stay from each hotel attribute scenario.” Based on the number of attributes and their corresponding levels, a full factorial design produces a total of 160 (i.e.,25 51 ) possible combinations of alternatives. A full factorial design producing all possible combinations of attributes and levels would allow all the main and interaction effects to be estimated. However, in practice it is impractical to evaluate the full range of combinations. An orthogonal fractional factorial design was thus constructed using the SPSS® Statistics 18.0 software that contained only a small subset of all possible combinations of attributes and levels. Due to the removal of some unreasonable or dominant combinations, the number of choice sets were reduced to 12 (see Figure 2 for an example choice set). These 12 choice alternatives were grouped into four combinations (choice sets). Each respondent evaluated four choice sets and within each one choice set, and selected one preferred choice composed of various levels of service attributes.

Design of the CE For the CE design, the most relevant attributes for green hotel facilities are identified based on the above review of the literature and a pilot survey. For hotel selection in general, when hotels are located close by, then room quality, price, service quality, and physical attractiveness are the most important determinants (Chu & Choi, 2000; Kasim, 2004; Lockyer, 2005), which can be represented in attributes set by room class (room quality and physical attractiveness), price, and service quality. Furthermore, hotels’ green attributes relevant to customer perceptions of their environmental practices such as personal toiletries (Fan et al., 2012; Kung & Lee, 2002; Tsai & Tsai, 2008;

Survey Instrument A self-administered questionnaire with three major parts was developed for this study. The first section contained the scenario and choices set design described above. The second part of the study examined the factors influencing tourists’ selection of green hotels. Two factors were chosen for their prominence in previous research, namely environmental attitudes (Han et al., 2009; Kang et al., 2012; Kim & Han, 2010; Lee et al., 2010; Wang & Fan, 2007; Yeh et al., 2003) and green consumer behaviors (Kim & Han,

Whether the hotels will automatically provide personal toiletries, such as toothpaste, toothbrush, soap, or shampoo, etc. The degree to which guest participation in environmental behavior is suggested or requested.

Whether the service delivery and product quality will be influenced by environmental practices and management. The implementation degree of environmental practices, facilities, and equipment in the hotel.

The rate for a double-bed room per night. With a reference price as NT$ 2500.

Personal toiletries (PTOI)

Service quality(SQ)

Green measures (GM)

Price level (PRICE)

Level

Discount 500 Discount 250 Listed price Pay more 250 Pay more 500

More

Not impacted Less

Impacted

Non-cooperating

Cooperating

Non-provision Provision

Luxury

Economy

Note: The exchange rate of US$ to NT$ (New Taiwan Dollar) was about 1:30 in 2012.

Environmentally cooperating behaviors (ECB)

The size of hotel rooms, the degree of cleanliness and comfort

Descriptions

Room class (ROOM)

Attributes

Please cooperate with water and electricity conservation. The room temperature should be fixed at 26–27°C. It is suggested that the towel is not changed daily. No water or electricity conservation measures. Room temperature not fixed. The towel to be changed daily and automatically. Hotels use sensor-activated lights, less packaging, water usage control, recycled paper, big bottles, continued use of toilet rolls, no endangered species as food, such as shark fin. No change to all the services and products. Only waste classification, traditional light bulbs, few energy-saving appliances, no door key card, no complete waste water treatment Full waste recycling, using energy-saving light bulbs/appliances/air conditioners, water saving equipment, electricity control key card, waste water treatment procedure. Discounted by 20% Discounted by10% Listed price Premium charged by10% Premium charged by 20%

Double-bed room 15 m2, with only a shower and without a bath. Ordinary comfort but clean. Double-bed room 21 m2, with shower and bath. Extremely clean and comfortable, well maintained rooms Personal toiletries will not be provided. Full set of personal toiletries will be provided automatically.

Level contents

TABLE 1. Attributes and Levels in the Green Hotel Choice Experiments

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FIGURE 2. An Example Choice Set Attributes Hotel A Standard Room quality Provision Personal toiletries Not impacted Service quality Environmentally Cooperating cooperating behavior More Green measures Discounted 250 Price level Which Hotel Would You Prefer? A

2010; Yeh et al., 2003). The items for environmental attitudes were based on Stone, Barnes, and Montgomery (1995) and Mostafa (2006). Seven items were assessed, such as “Excess packaging is one source of pollution that could be avoided if manufacturers were more environmentally aware”, and “My involvement in environmental activities today will help save the environment for future generations”. The six items used to examine the respondents’ green consumer behavior were adapted from Mostafa (2006) and Lee and Gan (2007). Example items include “I will take care not to buy products that might pollute the environment”, and “When I go to the supermarket I will take shopping bags with me”. All the items were assessed on a 7-point Likert scale, ranging from “strongly disagree” (1) to “strongly agree” (7). The final part gathered the respondents’ demographic characteristics, such as gender, age, and education, as well as items on the amount usually paid for hotels, who should pay for environmental practices, and experiences of traveling and staying at hotels. This section included questions such as “How much are you willing to pay for a double-bed room for one night?”, “How many days do you usually spend for a vacation within Taiwan?”, “Who should pay the cost of the environmental practices and measures in hotels – the hotel or the customer?”, and “Have you ever stayed at an environmentally-friendly hotel?”.

Hotel B Standard Non-provision Impacted

Hotel C Luxury Non-provision Impacted

Non-cooperating

Non-cooperating

More Pay more 500

Less Discounted 250

B

C

Data Collection A pilot test involving 35 persons, including staff, graduates, and college students at the university, uncovered some difficulties in the experimental choice set, so these were modified to make them clearer and simpler. While the sampling frame should cover all potential tourists within Taiwan, it was limited to subjects conveniencesampled in five metropolitan areas of Taiwan, namely Taipei, New Taipei, Taichung, Tainan, and Kaohsiung. The questionnaire was distributed to respondents willing to participate in the survey in places including supermarkets, offices, parks, and scenic areas. To add an incentive for responding, small gifts were included. Prior to distributing the questionnaire, surveyors attended a training session on how to conduct face-to-face interviews and were briefed on procedures for explaining the concept of a green hotel, showing the respondent the choice attribute description card, and instructing them how to complete the survey, especially the choice scenario and choice set. A total of 420 questionnaires were distributed between April and May 2012, and the proportions of the questionnaires collected from different surveyed areas were as follows: Taipei (10%), New Taipei (15%), Taichung (20%), Tainan (25%), and Kaohsiung (30%), where the residents would have more access to green hotel information. Finally, a total of 420 questionnaires were distributed between April and May of 2012, and 390 valid responses were analyzed after deleting those that were incomplete, yielding a response rate of

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TABLE 2. Estimates of the Measurement Equations of the Latent Variable Model

92.8%. With three options and four choices set per respondent, this resulted in a total of 4680 observations.

Environmental attitude

ANALYSIS AND RESULTS Green consumer behavior

Respondent Profiles The general backgrounds of the survey respondents are as follows. Females accounted for 58.7% of the respondents, and the average age was 34.2 years old, with most being between 20 and 30 years of age (48.5%). The majority of the respondents (63.3%) had an education level above college (72.3%). The respondents’ monthly income fell into two main categories: below NT$ 30,000 (64.6%) and NT$ 30,000– 60,000 (29.8%). With regard to how much they were willing to pay for a double-bed room for one night, the largest group chose NT$ 2000–3500 (47.4%), followed by less than NT$ 2000 (24.6%) and NT$ 3500–5,000 (21.0%). The most popular response for the length of vacation within Taiwan was two days (46.2%), followed by three or four days (37.2%). Regarding who should pay for the environmental practices in hotels, almost half the respondents (48.4%) felt that the hotel should pay, 36.2% had “no opinion”, and only 5.4% thought that the guests should pay. Finally, 41.3% of the respondents stated that they had stayed at an environmentally friendly hotel, about a third said that they had not, and 27.4% replied “did not noticed/do not know”.

Variable

Estimate

t-Value

EA2 EA4 EA5 GB1 GB2 GB4 GB5 GB6

0.52 0.64 0.69 0.66 0.77 0.62 0.80 0.55

8.62 9.91 10.27 13.41 16.30 12.34 17.15 10.68

Results of the CE Prior to the estimations of the MNL model and LVCM, measurement equations and structural equations for the latter were examined first. Measurement equations are used in the estimation to identify the latent constructs and estimates for the structural equations. To identify the latent constructs of environmental attitude and green consumer behavior, confirmatory factor analysis was conducted to analyze their validity and reliability. Estimates of the measurement equations are presented in Table 2. The t-values for all the estimates of items were found to be significant (p < 0.05), and all the estimates were larger than 0.5, indicating item reliability and validity. In terms of the structural equations, sociodemographic characteristics were used as explanatory variables for the latent variables of environment attitude and green consumer behavior. As shown in Table 3, respondents who

TABLE 3. Estimates of the Structural Equations of the Latent Variable Model Variablea

Constant Gender (male) Age (> 41 years) Education (college) Day (>3 days) Spend (>NT$ 3500) Income (>NT$ 30,000)

Environment attitude

Green consumer behaviors

Estimate

t-Value

Estimate

t-Value

5.08 −0.06 −0.12 0.08 −0.08 −0.08 -

94.47** −3.88** −7.74** 5.24** −5.06** −5.10** -

5.34 −0.20 0.22 −0.04 0.05 0.06

139.87** −14.16** 13.49** −2.85** 3.39** 3.88**

Notes: *p 3 days = 1, > NT$ 3500 = 1, > NT$ 30000 = 1.


were male, older than 41 years of age, traveled in Taiwan for more than three days, or spent over NT$ 3500 on a hotel, reported a lower environment attitude. In contrast, having obtained a college degree was related to a higher environment attitude. In addition, being older, having a higher income, or spending over NT$ 3500 on a hotel were all related to higher green consumer behavior, while being male and having a higher level of education were associated with less green consumer behavior.

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Estimates of the choice models were analyzed using Nlogit 4.0, and the results are presented in Table 4. The first model (MNL1) is the base model, assuming constant coefficients across individuals, as it is a homogeneous preferences logit specification without including the effects of the interaction terms. The second model (MNL2) is the model with interaction terms, which was used to capture the systematic heterogeneity. The LVCM model contains both the interaction terms and latent variables in the

TABLE 4. Estimation Results of Logit Models Attributesab

MNL1 Co-efficient

ROOM PTOI ECB SQ GM PRICE Age*ROOM Age* PTOI Age*ECB Age*SQ Age*GM Gender*ROOM Gender * PTOI Gender *ECB Gender *SQ Gender *GM Income* ROOM Income* PTOI Income* ECB Income*SQ Income*GM EA*ROOM EA * PTOI EA * ECB EA *SQ EA *GM GCB*ROOM GCB * PTOI GCB * ECB GCB *SQ GCB *GM LL(β) LL(0) Likelihood ratio indexρ2

0.383 0.643 −0.021 0.359 0.083 −0.001

−1522.179 −1702.116 0.107

MNL2 t-Value 6.041** 7.654** −0.297 3.712** 0.739 −6.837*

Co-efficient 0.472 0.715 −0.337 0.184 0.262 −0.001 −0.376 −0.274 0.245 0.492 −0.171 −0.239 0.281 0.440 −0.015 −0.227 0.350 −0.334 0.206 0.208 −0.072

−1488.881 −1702.116 0.125

LVCM t-value 4.826** 6.402** −3.181** 1.465 1.545 −6.609** −2.628** −1.942 1.453 2.703** −0.698 −1.856 2.261** 2.980** −0.098 −1.027 2.491** −2.443* 1.297 1.220 −0.303

Co-efficient

t-Value

0.387 0.635 −0.031 0.360 0.092 −0.001

6.061** 7.527** −0.439 3.702** 0.820 −6.791**

0.176 0.000 −0.289 −0.138 0.216 0.078 −0.246 −0.140 0.150 0.088 −1497.793 −1702.116 0.120

2.405** 0.006 −3.455** −1.532 1.736 1.068 −3.467** −1.692 1.661 0.706

Notes: *p < 0.05, **p < 0.01. a Room class (ROOM), Personal toiletries (PTOI), Environmentally cooperating behavior (ECB), Service quality (SQ), Green measures (GM), Price level (PRICE), Environmental attitude (EA), and Green consumer behaviors (GCB). b Coding used for the selection attributes of green hotel: Room (luxury) = 1, PTOI (toiletries provided) = 1, ECB (need cooperating) = 1, SQ (impacted) = 1,GM (more measures) = 1.

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choice model. Overall, each model was significant and demonstrated a good fit with the data when compared with the log likelihood values at zero and at convergence. In the analysis, the coefficients describe the influence of the attributes on choice probabilities, that is, positive coefficients denote an increase in the choice probability while negative ones signify a decrease. Most of the results from the three models were similar, those representing the parameters of room class and personal toiletries were significant and had positive signs, suggesting that the respondents preferred staying in green hotels with luxurious rooms and personal toiletries. As expected, price had significant negative coefficients, implying that the respondents prefer green hotels that are less costly. There were significantly positive effects on service quality for both MNL1 and LVCM. However, willingness to cooperate with environmentally friendly behaviors had significantly negative signs in MNL2, indicating that these respondents were unlikely to participate in such behaviors when staying at a hotel. MNL2 included the interaction terms between the sociodemographic items and attributes. The coefficient of Age*Room was significant and negative, suggesting that respondents over 40 years old were less likely to prefer a luxurious room. The coefficient of Age*SQ was significant and positive, implying that respondents over 40 years of age were more likely to accept lower service quality due to green practices. The coefficients of Gender*PTOI and Gender*GCB were significant and positive, implying that male respondents were more likely to prefer that green

hotels provide personal toiletry items and were willing to cooperate in environmentally friendly behavior. The coefficient of Income*ROOM were significant and positive, implying that respondents with higher monthly income (over NT$ 30,000) were more likely to prefer green hotels with luxurious rooms. In addition, the coefficient of Income*PTOI was significant and negative, reflecting that respondents with a higher monthly income (over NT$ 30,000) were more likely to prefer green hotels that do not provide personal toiletry items. Regarding the LVCM, the parameter estimates of the interaction terms between the latent variables (i.e., environment attitude and green consumer behavior) and attributes suggest that the respondents with high levels of green consumer behavior were less likely to choose a green hotel that provides personal toiletry items. The respondents with high levels of environment attitude were less likely to choose a hotel which needed them to cooperate in environmentally friendly behavior. Moreover, the respondents with high levels of environment attitude preferred green hotels with luxurious rooms.

Results for WTP In order to evaluate the impact of the various attributes on green hotel choice, we calculated the respondents’ WTP for these using the coefficient estimates of the MNL model and the LVCM. The marginal WTP estimates of each attribute were estimated using Equation (4), as shown in Table 5. All else being equal, respondents would pay between NT$ 383 and NT$

TABLE 5. Willingness-to-Pay for Green Hotel Attributes Variable Room class Personal toiletries Environmentally cooperative behavior Service quality Green measures

MNLa1

MNL2

LVCMb

383 (12.7) 643 (21.4) ― 359 (12.0) ―

472 (15.7) 715 (23.8) −337 (–11.2) ― ―

387 (12.9) 635 (21.2) ― 360 (12.0) ―

Notes: The number of the willingness-to-pay is valued in NT dollars, with US dollars in parentheses. a Multinomial logit b Latent variable class model


472 to upgrade their rooms. Regarding the attribute of personal toiletries being provided, the respondents were willing to pay between NT$ 635 and NT$ 715, the highest amount found in this part of the questionnaire, thus indicating that the respondents were willing to pay more for better service and greater convenience. The WTP estimates for the attribute of cooperating with environmentally friendly behavior was minus NT$ 337, and this negative WTT implies that the respondents would cooperate with such behavior for a compensation of NT$ 337. On the other hand, they would be willing to pay between NT$ 359 and NT$ 360, indicating the respondents would like to accept reduced service quality although they are willing to pay a positive amount.

DISCUSSION AND CONCLUSIONS Green Hotel Attributes Choice Preferences This study examined the relative importance of attributes when tourists make decisions with regard to selecting green hotels, as well as the effects of their socio-economic characteristics, environmental attitude, and green consumer behaviors on such choices. It also examined tourists’ willingness to pay for each attribute of a green hotel. Our study makes the following contributions to the literature. Firstly, it simulates consumers’ choice-making situations by avoiding the use of disconnected attribute selection, as seen in previous research, and clarifies the relative importance of green hotel attributes by means of CE, which is a relatively new technique in this field of study. Secondly, our study enhances understanding of end-users’ behavioral choices for green hotel attributes. The results indicated that, in the case of Taiwan, when tourists select a green hotel, the most important attribute is the provision of personal toiletry items, followed by room and service quality. However, willingness to comply with environmentally friendly behavior and green measures was not a significant determinant in selecting green hotels. Thirdly, using the LVCM, this study increases understanding of determinants of respondents’ environmental

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attitude and green consumer behavior in green hotel attributes choice behavior, which has not yet been tested. As such, the study provides information that can assist hotel managers in preparing a green hotel marketing strategy. One interesting finding is that the subjects responded that impacted service quality from green hotels would be accepted, which is different from the finding of Manaktola and Jauhari (2007), although similar to that of Dalton et al. (2008). However, some studies argue that service quality in green hotels should be at the same level as in regular ones (e.g., Han & Kim, 2010). In addition, the green measures attributes did not have any significant influence on hotel selection, similar to some of the findings of other studies based in Taiwan (Chen, 2002; Yeh et al., 2003) and Malaysia (Kasim, 2004). We examined the heterogeneous preferences of tourists by adding the interaction of socioeconomic characteristics in MNL2. The findings showed that age, gender, and income had a significant influence on the respondents’ selection of green attributes. The older respondents were less likely to prefer luxurious rooms and more likely to accept impacted service quality. The male respondents preferred personal toiletries being provided, although they also stated that they were more likely to act in an environmentally friendly manner. However, it should be noted that most of the related literature finds that women have higher levels of environmental consumption intention (Han et al., 2011), even in the context of hotels (Han et al., 2009). Nevertheless, Kang et al. (2012) find that men are more willing than women to pay a premium for green hotels, and they proposed that the reason for this is that the former are more inclined to take direct environmental action, such as engaging in protests, than the latter, who focus more on green purchases. In addition, the higher income respondents preferred luxurious rooms, but were also more willing to accept that personal toiletries were not provided, and this willingness to follow environmental norms might be an effective mitigation of the pleasure or guilt associated with staying in high quality room (Kang et al., 2012). Similarly, Batstič and Gojčič (2012) also find

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that respondents with a higher income have higher expectations of the environmentally friendly aspects of hotel service. In this study, the LVCM was applied to identify consumers’ environmental attitude and green consumer behavior in the preferred green hotel attribute choice. Regarding the influence of tourists’ environmental attitudes and green consumer behaviors on the selection of green attributes, the LVCM found that respondents displaying higher levels of green consumer behavior were less likely to prefer the provision of personal toiletries, as anticipated (Lee, 2006; Yeh et al., 2003), indicating the higher “probability” that respondents with higher levels of green consumer behavior were more likely to have personal toiletries in the simulated context of personal toiletries under consideration. This result implies that daily green consumer behavior demonstrates some predictive power with regard to segmenting the willingness to bring personal toiletry items. Dolnicar (2010) and Dolnicar and Grün (2009) find that tourists tend to adopt more environmentally oriented behaviors at home rather than in hotels. However, daily environmental behaviors are related to those in hotels if an appropriate infrastructure is provided. The results also indicate a positive relationship between environmental attitude and luxury rooms, but a negative relationship with environmentally complying behaviors in hotels. Thus, it is argued that a gap exists between environmental attitude and actual behavior, due to barriers such as lack of social norms, practicality (Kollmuss & Agyeman, 2002), or convenient infrastructure (Dolnicar, 2010). By adopting a CE, the implicit prices (MWTP) of green attributes were derived from the MNL1 model and the LVCM, thus overcoming the weakness of Millar and Baloglu’s (2011) approach, which used conjoint analysis to evaluate the green attributes of hotel rooms without specifying the price estimation. The marginal WTP for green hotel attributes indicates that respondents would pay for (or accept) changes in the utility, i.e., a change in a green hotel attribute, rather than pay for green attributes. The results here demonstrated that the respondents were willing to pay for the

following attributes for a utility change: better quality room, the provision of personal toiletries, and some reduction in service quality, while they wanted to be compensated for cooperating with environmental behaviors. Unexpectedly, the provision of personal toiletries was a very important factor in the selection of a green hotel, and the average amount that people were willing to pay for this, NT$ 664 (US$ 22.1), accounts for almost one third of the average room rate in Taiwanese hotels. Because the provision of personal toiletry items is seen as a standard part of hotel accommodation, the decision not to do this is seen negatively, as simply a way for the hotel to save money (Yeh et al., 2003). Therefore, according to the China Times newspaper (April 18, 2012), some hotels that undertake green initiatives compensate customers by offering a discount when personal toiletries are not provided, and these can be as high as 40%. On the other hand, when the respondents were asked to cooperate in certain environmental behaviors in hotels, then they wanted compensation of NT$ 337 (US$ 11.2), which means that this attribute was significant in determining the selection of a green hotel, and that the need to participate in such actions was seen as inconvenient. While the results of the positive MWTPs for the impacted service quality may seem unreasonable, these figures are in agreement with the significant coefficients of MNL1 and LVCM, indicating that impacted service quality has a considerable influence when selecting a green hotel, and is more important than the other attributes. The degree to which a hotel implemented green measures and whether or not the respondents were expected to act in an environmentally friendly manner were not key determinants of hotel choice, but service quality was. The answer to the question “pay premiums” for hotels’ green practices (e.g., Fairweather et al., 2005; Guadalupe-Fajardo, 2002; Lee & Gan, 2007) was hidden in the “impacted service quality” in the context of Taiwan. Pay premiums were not directly indicated when paying for green measures or practices, but rather for the recognition of what green hotels might offer guests – compromised service quality. Kang et al. (2012) argue that the reason most hotel


owners hesitate with regard to undertaking green measures is that the returns associated with these are uncertain. Therefore, if guests are willing to pay in the context of impacted service quality, then hotels are expected to implement more environmentally friendly operations. The results of this study also showed that almost half the respondents (48.4%) thought the hotels should take the responsibility for the cost of environmental practices and measures.

Implications for Green Hotel Development and Marketing This study can aid strategy formulation for the development of green hotels in Taiwan. Firstly, the provision of personal toiletries was a more highly preferred attribute in the selection of green hotels than expected, perhaps because the practice has a long history in Taiwan. Guests are therefore less likely to accept that they will need to bring their own toiletry items, which creates a customer-switching inertia from conventional hotels to green hotels. The Taiwan government and laws do not regulate the provision of personal toiletries. Therefore it is suggested that hotels provide an “environmental room” without personal toiletries at a discounted rate. Additionally, the hotel may try to encourage people to bring their own toiletries and provide such items only if requested. At the same time, hotels might offer complimentary discount coupons for the next stay. To change consumer behavior, the hotel industry is encouraged to form a green hotel consortium and issue guests with an “environmentally friendly card” that enables them to collect “green points” that they can exchange for accommodation coupons or gifts. Such incentives would increase the acceptance of green initiatives by both hotels and guests. Subsequently, if all the measures suggested cannot alter consumer behavior, then regulations ensuring that hotels do not provide personal toiletries should be considered. Secondly, results indicate that daily green consumer behavior can be a significant factor in green hotel market segmentation. As Dolnicar (2010) suggests, hotels use a demand

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approach in providing greener infrastructure for habitual green behavior tourists. Green hotels may introduce innovative green services, like offering organic food, green products, and simpler rooms and facilities. Hotels could also target and market green consumers in other fields such as green electricity, green diets, green cleansers, and waste recycling, by posting green hotel advertisements on relevant blogs, Facebook, Twitter, mobile apps, and so on. Similarly, a “green card” or social network of green consumers could take off. If the green hotel is included, then green consumers may promote their identity and share common green experiences. Thirdly, the results indicated that respondents would like to be compensated for complying with environmental behaviors in hotels. Therefore it is suggested that hotels explain why compliance was sought in implementing environmentally friendly behaviors, for example, not changing towels daily conserves water, controlling the air conditioning temperature conserves energy. Additionally, customers should receive feedback with regard to the outcomes of cooperation in saving water or energy. In this way, customers staying in hotels may feel better. We also suggest rewarding their cooperation with complimentary drinks coupons to increase their level of comfort. Finally, based on the results, a perception gap is evident between green hotel attributes and customer choices. Customers would not consider or pay more for green measures, but they might be prepared to compromise when service quality is impacted because it is “green”. Robinot and Giannelloni (2010) state that the green attributes of a hotel should be seen as part of its “basic” service quality, although they suggest that managers should not inform guests of the green measures being taken, as this may impact their perceptions of service quality. However, our results suggest the contrary, as this would increase the level of acceptance. Accordingly, hotels should still adopt green measures and inform guests of their green practices. They could even create an “experience spot” to deliver and educate customers on how green issues are addressed and implemented in hotels.

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Limitations and Future Research In employing a CE approach, we first simulated a scenario for tourists’ decision-making behavior when selecting green hotels. However, the specifics of the current study, with its focus on the provision of personal toiletry items and the respondents all drawn from a Taiwanese sample, means that the results cannot be generalized to other contexts. Also, sampling could be improved on by employing a more systematic sampling design. However, this study shows that CEs can be a useful tool in examining how people weigh various general and environmentally relevant attributes when choosing a hotel. In addition, the green hotel attributes examined in this work were also incomplete due to the need to make the survey as easy as possible for the respondents to complete. It is suggested that future studies deploy different attributes, such as hotel employees’ environmental behaviors, and various levels of these attributes, in order to carry out a more detailed exploration of these issues. Additionally, the CE design may be limited by potential errors, which could undermine the results. In addition, the hotel price level was set in accordance with Taiwan’s situation, thus the MWTP found in this work cannot be generalized to other countries. Since hotel prices vary with country, hotel type, travel type, and so forth, more research is needed to uncover the effects of price on tourist selection of green hotels. A research limitation is the response bias that hypothetical WTP may overestimate real WTP. To improve estimation, other types of WTP measurements could be incorporated. In addition, since this research was the first to employ CEs using demographic characteristics to explore the acceptance of various attributes of green hotels, it was difficult to compare the results of this work with those of previous research. However, a review of the literature on tourist preferences, acceptance, or willingness to pay for green hotels reveals inconsistent and inconclusive results. In studies carried out in developed countries, such as the United States and Austria, the respondents generally expressed greater acceptance of green hotels,

while the findings from developing countries, such as Malaysia, India, and, in this work, Taiwan, showed less enthusiasm. Therefore, future work could gather respondents from different countries and carry out the same CE used in this work as this would help in clarifying behavioral intentions and attitudes toward green hotels from a cultural perspective. Finally, this study contributes to the literature by showing how CEs can be integrated with latent variables into models that can then be used to better understand the effects of people’s personal attitudes on their decision-making behavior, as well as their preferences with regard to certain attributes. Future studies could adopt other latent variables, such as daily environmental behavior, past experiences in green hotels, social norms, and self efficacy, as this would enrich the literature on tourist responses to hotels’ green initiatives.

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SUBMITTED: July 9, 2013 FINAL REVISION SUBMITTED: November 11, 2013 ACCEPTED: November 13, 2013 REFEREED ANONYMOUSLY