Factors influencing willingness of customers of environmentally friendly hotels to pay a price premium

Abstract

Purpose

The purpose of this paper is to investigate the influence of customers’ environmental concerns, customers’ perceptions of a hotel’s environmental practices and of the hotels’ environmentally friendly images, on customers’ willingness to pay a price premium to stay at environmentally friendly hotels.

Design/methodology/approach

The theoretical framework comprises both social identity theory and value-belief-norm theory. The data were collected through a survey of 454 customers staying at eco-friendly hotels in Spain. The research model is tested by using a structural equation modelling approach.

Findings

The findings illustrate that customers’ environmental concerns have a greater explanatory value on their willingness to pay a price premium than do their perceptions of the hotels’ environmental practices. Furthermore, these causal relationships are similar in magnitude when considering the mediating effects of the hotels’ eco-friendly image and the environmental practices.

Research limitations/implications

The empirical findings provide managers with a better understanding of how customers’ environmental concerns and their own sense of identification with environmentally friendly hotels influence customers’ behavioural intentions towards willingness to pay a premium.

Originality/value

The paper contributes to the literature by highlighting those cognitive processes that influence the customers’ willingness to pay a price premium to stay at environmentally friendly hotels. Hence, the study provides valuable information to hotel managers.

Citation

González-Rodríguez, M.R., Díaz-Fernández, M.C. and Font, X. (2020), "Factors influencing willingness of customers of environmentally friendly hotels to pay a price premium", International Journal of Contemporary Hospitality Management, Vol. 32 No. 1, pp. 60-80. https://doi.org/10.1108/IJCHM-02-2019-0147