Do customers really care about “green”?

As more hoteliers get on board the sustainable operations movement, their efforts are not only improving the environment, but cutting their electricity costs and other expenses. But do customers really care? Do green programs actually affect hotel selection or the price a guest is willing to pay?

Based on new questions added to the Market Metrix Hospitality Index survey, we analyzed the importance of green initiatives to hotel guests and which brands, according to guests, have the best green programs.

“Eco-friendly” or "green" initiatives are most compelling to Luxury hotel guests with 20% of these travelers claiming these programs are “Very Important” when selecting a hotel. Least affected by these program are guests in the Midscale w/o F&B segment (9% consider these programs “Very Important”). Therefore, it appears that customers who can afford to care about green are more willing to change their behavior. Across all hotel segments 12% of guests rate these programs “Very Important” when picking a hotel. This level of general market acceptance signals an opportunity for brand differentiation, especially among lower priced hotels.

Which hotel brands have the best green programs?

In addition to measuring the importance of green initiatives to their choice of hotel, guests were also asked to rate the hotel’s green initiatives. Green programs were rated highest for luxury hotel brands (74.7) and lowest for economy brands (69.6). Among hotel brands, Kimpton was the clear winner (89.7), far outscoring the next highest brand (Walt Disney World Resorts 81.4). With its Earthcare program, every Kimpton hotel adopts standard eco-friendly products and practices – from eco-friendly cleaning products to recycling of coat hangers and paperless check-ins/outs.

Overall, guests who rank a hotel’s green program highly are willing to pay at least 7% more for their room compared to other guests. These same guests also stay longer, are happier with their stay and are more likely to consider the loyalty program as “very important” in selecting a hotel. Hotels with highly ranked green programs also experience half as many guest reported problems.

There were some surprises. Some lower priced hotels (e.g., Jameson Inns) were evaluated favorably for their green initiatives, demonstrating that cost does not have to be a barrier to implementing a guest-friendly green program. Conversely, despite the importance luxury guests place on eco-friendly programs, several higher priced hotels received low ratings (e.g., Ritz Carlton ranked 58th with a score of 72.5). Among the large hotel chains (e.g., Marriott, Hilton), green programs were rated near the industry average (73), meeting guest expectations.

While green programs offer significant cost savings, the guest response to these programs (impact on loyalty, price sensitivity, etc.) can also provide significant market opportunity.

Establishing eco-friendly programs can be a cost-effective marketing tool and simply raising awareness of environmentally friendly programs among customers will help many properties increase participation and get credit for their efforts.

Jonathan Barsky and Lenny Nash are principles with Market Metrix LLC (MarketMetrix.com), a firm that provides multi-channel survey, analysis and service improvement tools and benchmarking data for the hospitality industry. For more information, call (800) 239-7515.

Market Metrix helps hospitality companies around the world foster loyal customers and engaged employees. Based on award-winning research and breakthrough concepts, our products deliver instant survey results, analysis and management tools for increasing revenue and reducing staff turnover. Our benchmarking database, MMHI, is the most comprehensive, independent comparison of consumer brand satisfaction in the industry. Our annual MMHI Awards are coveted by lodging and travel enterprises around the world. With clients that include more than 120 brands across 70 countries, Market Metrix has been helping leading hospitality companies turn feedback into performance since 1996. Please contact us for more information.