The price of hotel sustainability: willing-to-stay and willing-to-pay?
— 20 experts shared their view
A recently published large-scale survey points out that the vast majority of travelers are keen on staying at hotel properties that engage in sustainability (1). Willingness-to-stay (WTS) is important to the extent in which hotels can capitalize on their sustainability endeavors through transparent communication. However, the same travelers seem to have difficulty in finding hotels committed to sustainability or simply are not aware that those hotels even exist (2); a topic discussed by the World Panel on Sustainability in Hospitality earlier this year (3). Beyond WTS, hoteliers are particularly interested in the willingness-to-pay (WTP). Findings from academic research are mixed, but recent studies point out that the willingness to pay a price premium to stay in hotels that have implemented sustainability practices is linked to the level of environmental concerns showed by individuals (4). Because ultimately, the price guests pay to stay at the property remains a major driver or barrier for travel decisions.
How should the industry communicate the added value of sustainability (rather than added cost) that resonates with guests that espouse similar values? How should the industry communicate to other segments which do not share the same values? How do we transform the perception that sustainability measures are simply a cost-reduction strategy rather than valuable and essential practices in this day and age?
Professor of Hospitality Management at the IU International University of Applied Sciences, Germany
Zero years to act.
When climate scientists were recently asked(1) how many years we have left to act on the climate emergency, the answers were unequivocal: zero. That's right, zero years because critical tipping points are being reached as reported in a recent study published in BioScience(2). You can take a few minutes to browse the outcome and dozens of graphs providing insights on ocean acidification, ice mass, carbon emissions and other critical tipping elements. Why should travelers care about any of this and in which way is this related to willingness-to-pay you may wonder? For one, the hospitality industry does not operate in a bubble. We depend heavily on a healthy planet (COVID-19 aside) for our own products and services in the form of equitable and low impact supply chains, as well as natural and cultural attractions at destinations. Guests also require a healthy planet to travel. Interestingly, many important decisions in the hospitality sector are left to or based on 'what the consumers want, what they are willing to accept, what they are willing to pay'. But I would argue that hoteliers are in the driver's seat here and must take actions to support and persuade sustainable consumption. And the time is now: a series of recent industry reports and surveys are pointing out that a majority of travelers wish to tread lightly when on holidays, supported by a desire to make responsible decisions. Academics have published dozens of studies on the topic of willingness-to-pay for sustainable hotels (3) with mixed results, however, most are pre-COVID-19. Much learning has been accomplished in regards to aligning intentions ("I am willing to pay a premium") to behaviour ("I actually pay a premium"). An article in the Harvard Business Review(4) summarizes five actions a business can take to nudge consumers. These include using the power of social norms, supporting positive habits, supporting the individual sustainability journey, making careful decisions between emotional and rational communication and focusing on the experience. Perhaps the most prominent recommendation is simply making sustainability the default, and not the option.
(1) Francis, J., Mann, M., Buck, J.B., & Kalmus, P. (July 28, 2021). How many years until we must act on climate? Zero, say these climate thinkers. The Guardian. https://www.theguardian.com/commentisfree/2021/jul/28/climate-crisis-zero-fossil-fuels-environment
(2) Ripple, W.J., Wolf, C., Newsome, T.M., Gregg, J.W., Lenton, T.M., Palomo, I., Eikelboom, J.A.J., Law, B.E., Huq, S., Duffy, P.B., Rockström, J. (2021). World Scientists' Warning of a Climate Emergency 2021. BioScience, biab079, https://doi.org/10.1093/biosci/biab079
(3) Kang, S., & Nicholls, S. (2021). Determinants of willingness to pay to stay at a green lodging facility. International Journal of Hospitality Management, 94. 102834. https://doi.org/10.1016/j.ijhm.2020.102834
(4) White, K., Hardisty, D.J., & Habib, R. (2019). The Elusive Green Consumer. Harvard Business Review, July-August, 124-133. https://hbr.org/2019/07/the-elusive-green-consumer