=Paper=
{{Paper
|id=Vol-3293/paper13
|storemode=property
|title=Consumers' Willingness to Pay for Green Hotels: The Case of Millennials in Greece
|pdfUrl=https://ceur-ws.org/Vol-3293/paper13.pdf
|volume=Vol-3293
|authors=Michalis Skordoulis,Maria-Ioanna Andreopoulou,Dimitrios Drosos
|dblpUrl=https://dblp.org/rec/conf/haicta/SkordoulisAD22
}}
==Consumers' Willingness to Pay for Green Hotels: The Case of Millennials in Greece==
https://ceur-ws.org/Vol-3293/paper13.pdf
Consumers’ Willingness to Pay for Green Hotels: The Case of
Millennials in Greece
Michalis Skordoulis 1, Maria-Ioanna Andreopoulou 2 and Dimitrios Drosos 3
1
University of West Attica, Department of Tourism Management, Egaleo Park Campus – 28 Agiou Spyridonos
str., Egaleo, 12243, Greece
2
Mediterranean College, School of Tourism and Hospitality, 8 Pellinis str., Athens, 11251, Greece
3
University of West Attica, Department of Business Administration, Ancient Olive Grove Campus – 250 Thivon
and Petrou Ralli str., Egaleo, 12244, Greece
Abstract
As environmental awareness is increasing, the number of people interested in staying at green
hotels is also rising. This paper aims to investigate Greek millennial consumers’ willingness to
pay for green hotels. Participants’ environmental perceptions are measured and analyzed using
the NEP scale as well. The research was carried out during the period between 1 February 2022
and, 1 May 2022, while 425 valid questionnaires were analyzed. The main finding of this
research shows a positive correlation between respondents’ environmental perceptions and
their willingness to pay more in order to stay in a green hotel. This result can have significant
managerial and policy implications due to the importance of tourism for the Greek economy.
Keywords 1
Green hotels, eco-friendly hotels, green tourism, sustainable tourism, willingness to pay,
environmental awareness, New Environmental Paradigm.
1. Introduction
The growing interest in environmental sustainability has led several firms to adopt practices that are
environmentally friendly [1-2]. Environmental sustainability is in the spotlight of academic research
and it is linked with the concept of ecotourism [3]. The term “ecotourism”, also known as “green
tourism”, first appeared in the 1980s as a result of the global acknowledgement and response of tourism
industry to environmentally sustainable practices.
The growth of ecotourism can be primarily attributed to the growing environmental awareness. As
societies become more aware of the harm caused on the environment, customers are willing to purchase
products and engage in practices that appear to help to protect and preserve the environment, which are
labeled as either “green” or “eco-friendly” [4]. Thus, the rising awareness of human activities’ negative
impact on the environment has led firms, including hotels, to adopt environmentally friendly practices
and become environmentally responsible [5].
Various findings on willingness to pay for environmental friendly practices in hotels are reported in
the relevant literature. Previous studies show that guests’ environmental awareness can influence their
willingness to pay for green hotels [6]. As a result, over the last two decades, a large number of hotels
incorporate green practices [7]. According to a survey conducted for international green hotels, the
percentage of respondents who prefer to stay in green hotels is equal to 90% [8], while in another
research this percentage exceeds 92% [9].
However, concerning the issue of how much hotel guests are willing to pay for green hotels, Han
(2021) [10] found that guests are willing to pay for regular hotel prices. Similarly, Obgeide (2013) [11]
found that even though hotel guests are supportive of green practices, they are largely unwilling to pay
Proceedings of HAICTA 2022, September 22–25, 2022, Athens, Greece
EMAIL: mskordoulis@gmail.com (A. 1); m.i.-andreopoulou@mc-class.gr (A. 2); drososd@uniwa.gr (A. 3)
ORCID: 0000-0002-4621-507X (A. 1); 0000-0003-0059-9781 (A. 3)
©️ 2022 Copyright for this paper by its authors.
Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0).
CEUR Workshop Proceedings (CEUR-WS.org)
32
an extra amount of money to stay in them. Particularly, a 75% of hotel guests are willing to pay the
same amount of money or less. In their study, Millar and Mayer (2013) [12] found that the majority of
hotel guests are willing to pay up to 10% more. Manaktola and Jauhari (2007) [13] also found that a
40% of guests are willing to pay from 4% to 6% more in order to stay in a green hotel.
Tourism is one the major sectors of the Greek economy. More specifically, tourism accounts about
11% of the national Gross Domestic Product [14]. In Greece, green hotels are increasing every year.
Either already existing hotels proceed with significant environmental improvements, or new hotels are
built from scratch with environmental protection as their main focus. Based on the existing data, about
370 green hotels (hotels awarded with a Green Key eco-label) already operate in Greece. These data
mean that Greece is now ranked as the third country in the world based on the number of green hotels
[14]. Thus, green hotels seem to be an in important component of the Greek tourism industry.
Despite the extensive research conducted worldwide, studies regarding willingness to pay for green
hotels in the Greek area are limited [15]. Thus, the aim of the present research is to examine Greek
consumers’ willingness to pay for green hotels through the case of millennials.
The paper is organized as follows. In the second section the research methodology is presented. In
the third section the research results are presented and discussed. Last, the conclusions of the research
are presented in the fourth section.
2. Research Methodology
To measure respondents’ environmental perceptions and willingness to pay for green hotels an
empirical study was carried out. More specifically, a structured questionnaire was responded by
millennials living in Greece. The questionnaire was distributed electronically, while 425 valid responses
were collected during the period between 1 February 2022 and, 1 May 2022.
The sample consists exclusively of millennials. Millennials, also referred as Generation Y or Gen
Y, are the people born between and the early 1980s and the 2000s [16]. We have focused in this
generation because Millennials are considered as the most socially responsible consumers [17] and, at
the same time they will dominate the market for several years [18].
The first part of the questionnaire contained five questions about the environmentally responsible
behavior. The second part was dedicated to willingness to pay for green hotels, while the third part of
the questionnaire was dedicated to environmental perceptions. Last, the fourth part consisted of six
questions regarding the demographic profile of the respondents. The questionnaire consisted of
dichotomous questions, multiple choice questions and 5-point Likert type questions.
Environmental perceptions were measured using the New Ecological Paradigm (NEP) scale. The
scale’s items were coded from 1 referring to “strongly disagree” to 5 referring to “strongly agree”. A
high score in the NEP scale indicates an ecocentric orientation [19-20]. Furthermore, all the other
questions were obtained from the relevant literature [21-23].
Concerning the questionnaire’s internal consistency, Cronbach’s alpha is applied. The coefficient’s
results show high internal consistency, since its value for the first part of the questionnaire concerning
environmentally responsible behavior is 0.799, while for the second part concerning willingness to pay
for green hotels is 0.765 and, for the third part concerning the NEP scale is 0.832.
3. Research Results
3.1. Respondents’ Demographics
Initially, respondents’ demographics are measured. Concerning their gender, 65.6% of them are
females, while 34.4% are males. The majority of respondents belong in the 18-25 age group (49.1%)
followed by the 26-35 age group (32.1%) and the 36-45 age group (18.8%). Most of them (81.7%) hold
a bachelor’s degree, 10.2% of them hold a secondary education or an associate’s degree, while 8.1%
hold a master’s degree. Concerning the place of residence, most of the respondents reside in urban areas
(78.6%) and semi-urban areas (18.3%). 3.1% of respondents live in rural areas. Last, as far as the annual
income is concerned, most of the respondents (45.8%) reported between 5.001 and 10.000 Euros, 27.5%
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reported less than 5.000 Euros, 16% reported between 10,001 and 15,000 Euros, 6.9% reported between
15,001 and 20,000 Euros and, 3,8% reported an annual income higher than 20,001 Euros per year.
3.2. Environmentally Responsible Behavior
The data provided in the following table measure respondents’ environmentally responsible
behavior based on five different practices.
Table 1
Environmentally responsible behavior
Totally Disagree Neutral Agree Totally
disagree agree
Limit use of energy 1.20% 7.20% 26.70% 58.00% 6.90%
Recycle 1.10% 2.00% 9.20% 53.40% 34.40%
In the case of two products with the 1.50% 3.10% 29.00% 47.30% 19.10%
same price and quality choose the green
one
Environmentally sustainable practices 1.20% 2.70% 24.00% 58.80% 13.30%
influence consumer behavior
The first four variables indicate a high level of environmentally responsible behavior since positive
answers are recorded for the majority of the respondents.
However, the fifth question indicated that most of them (77.10%) do not financially aid or participate
in an environmental organization.
3.3. Willingness to Pay for Green Hotels
Willingness to pay for green hotels is examined through the statement “I would pay more to stay in a
hotel which is environmentally friendly”. As shown in Figure 1, it is revealed that the majority of the
participants (61.90%) responded positively, while 30.50% of them were neutral, which indicates a high
level of endorsement.
7.60%
15.30%
30.50%
46.60%
Disagree Neutral Agree Totally agree
Figure 1: Respondents’ willingness to pay more in order to stay in an environmentally friendly hotel.
34
Furthermore, the participants, were asked to report the extra amount they are willing to pay in order
to stay in a green hotel. Based on the following figure, it is obtained that most of them are willing to
pay a low extra amount in order to stay in a green hotel. A similar pattern of results was obtained in the
study by Kang et al. (2012) [23]. This result could be explained by the low income of the participants.
More than 16% 0.80%
11%-15% 3.80%
6%-10% 21.40%
1%-5% 72.50%
0% 1.50%
Figure 2: Extra rate respondents are willing to pay in order to stay in a green hotel.
3.4. Environmental Perceptions and Willingness to Pay
As already mentioned, the NEP scale has been used to measure participants’ environmental
perceptions. Based on the responses, the NEP scale’s mean score is equal to 3.38. Thus, taking into
consideration the fact that the NEP scale score is measured in a 5-point Likert scale where 1 refers to
“strongly disagree” and 5 to “strongly agree”, we conclude that most of the respondents are
characterized environmentally sensitive [20].
In order to examine the relationship between environmental perceptions and the willingness to pay
more in order to stay in a green hotel, Spearman’s correlation coefficient is used.
Based on the coefficient’s results, we obtain a statistically significant positive correlation
(sig. = 0.012). This means that the NEP scale’s mean score and the willingness to pay more in order to
stay in a green hotel are correlated. This result is in accordance with the findings of the study of Kang
et al. (2012) [23] who pointed out a positive relationship between high levels of environmental concern
and willingness to pay more for green hotel practices. Additionally, Han et al. (2011) [10] found that
the most important reason affecting hotel guests to pay more to stay in a green hotel, is the level of their
environmental concern.
3.5. Demographics and Willingness to Pay
To examine the relationship between respondents’ demographics and their willingness to pay more
in order to stay in a green hotel two different statistical tests have been used.
First, concerning respondents’ age, level of education and annual income, Spearman’s correlation
coefficient is used. Based on the p-values obtained, there is no statistically significant correlation
between respondents’ age (sig. = 0.981), level of education (sig. = 0.950) and annual income
(sig. = 0.472) and their willingness to pay more in order to stay in a green hotel. This result is irrelevant
with the results of other researchers [24]. Lastly, the results regarding income level, which was
relatively low, are in contradiction with the study by Philippsen et al. (2017) [25] who found people
with a higher income to pay more importance on green hotels. This contradiction may be supported by
35
the fact that the average monthly salary in Greece is low compared to other countries and the fact that
most of the respondents have about the same level of annual income.
Furthermore, as far as the respondents’ gender, place of residence, profession and financial aid or
participation in an environmental organization are concerned, Pearson’s chi-square test of independence
is used. Based on the test’s results, respondents’ gender (sig. = 0.013) and financial aid or participation
in an environmental protection organization (sig. = 0.005) are found to be correlated with their
willingness to pay more in order to stay in green hotel at a statistically significant level. Concerning
gender, the above results confirm some findings of the existing literature since they are in line with the
results of Fuentes-Moraleda et al. [22] who found that women are more frequent customers of green
hotels compared to men.
4. Conclusions
Consumers’ awareness and concerns for the environment have grown dramatically, while
environmental concerns are now between the most important factors in consumer decision making [26-
27]. This trend applies in hotel industry as well.
This paper investigated the relationship between Greek millennials’ environmental perceptions and
their willingness to pay for green hotels. The results found a positive correlation between the above
mentioned variables. Furthermore, most of the participants reported that they are willing to pay an extra
amount between 1% and 5% in order to stay in a green hotel.
The findings of this research can be used to develop the understanding of environmental
sustainability in hotels in Greece. Given the importance of hotel guests’ environmental awareness, it is
crucial to make them aware about the concept of environmental sustainability and its application in
hotels. Information about green certifications should also be accessible to potential guests as they are
found to positively affect their willingness to pay [28]. This also emphasizes the need to encourage
hotel guests to take part in reducing their own impact on the environment. The adoption of a greener
mindset will protect the environment and boost competitiveness as well [1-2].
It is considered necessary to refer to the limitations of the research. Thus, it should be noted that the
obtained results could be representative only of the Millennials. As far as it is concerned it is proposed
that a future research should concern all the consumers’ generations, since generations like Baby
Boomers are still important for the tourism industry [29].
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