Predictors of willingness to pay a price premium for hotels’ water-saving initiatives

Abstract

This study examines customers' willingness to pay a premium to support hotels' water-saving initiatives and the effect of different explanatory variables: attitude toward water conservation, water problem awareness, willingness to sacrifice, reported water-saving behavior, and frugality. A Heckit model is applied to a sample of 681 tourists. Results show that 44.3% of tourists would pay a premium to stay in a hotel that had installed water-saving devices in rooms.The average price premium they would pay is 4.29 euros. These findings offer interesting insights for hotel managers to identify tourists who could contribute to reducing the costs of going green.

What drives the adoption and consumption of green hotel products and services? A systematic literature review of past achievement and future promises

“…They further estimated that consumers expected a discount of $11 to accept the green practices related to water usage. On the other hand, Casado-Díaz et al (2020) found that consumers were willing to pay a premium of 4.69 Euros at hotels that had water-saving devices installed in the rooms. Similar results were also observed in the United States, where Kuminoff et al (2010) observed that hotels charge $9-$26 of premiums at green hotels.…”

“…To address this, some recent studies have now started deconstructing the green hotel ‘black box’ to study the role of initiative‐specific attitudes. Attitude towards water conservation (Casado‐Díaz et al, 2020) and green purchase (L. Wang, Wong, & Narayanan, 2020) are two noteworthy ones to mention. However, these studies are relatively few and do not cover several other such green initiatives that exist.…”

“…While implementing green initiatives can save costs, it can also become a serious capital expense on the other end in terms of new technology and labour. Thus, green hotels often end up charging price premiums from their consumers (Casado‐Díaz et al, 2020). However, they also provide the value of a reduced environmental impact to the environmentally‐conscious consumer (S. Wang, Wang, Wang, et al, 2018).…”

“…Consequently, a large body of literature on consumer behaviour in green hotels has evolved to understand the consumers' adoption intentions (Nimri et al, 2020; Yarimoglu & Gunay, 2020), particularly their willingness to pay a premium (Casado‐Díaz et al, 2020; G. Choi et al, 2009) and their word‐of‐mouth intentions (Tanford et al, 2020). This research stream has continued to grow considerably.…”

Exploring Cruise Tourists’ Preferences and Satisfaction: The Case of Taiwan

“…Willingness to pay (WTP) is the amount that consumers think is most appropriate and are willing to pay for a product [17,18]. Casado-Díaz et al (2020) [19] pointed out in their study that 44.3% of travelers would pay extra to stay in hotels with water saving devices installed, with an average WTP of EUR 4. 29.…”