Greener Is Not Always Pricier
Voluntary ecolabeling programs have gained popularity in the tourism industry as initiatives for promoting ecofriendly practices among tourism firms. Yet, for these programs to appeal to firms, it is crucial that they generate positive market benefits for ecolabeled firms. This paper studies the effect of a sustainable tourism label on prices of hotel firms. It uses hotel listing data collected from Booking.com and covering more than 6,000 hotels across 10 popular European cities. The paper finds that the presence of the ecolabel is associated with a price premium of approximately 10 percent in the full sample. However, point estimates of this premium vary across cities, from a low of 1 percent in Venice to a high of 22 percent in London. As a novel contribution, the paper shows that the ecolabel delivers a quantitatively and statistically significant price premium only in cities where tourism (destination) competitiveness is high and ecolabel attainment is low. The paper discusses the implications of these findings for firms and policymakers in the industry.
Main Authors: | , , |
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Format: | Working Paper biblioteca |
Language: | English English |
Published: |
Washington, DC: World Bank
2023-08-30
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Subjects: | ECOLABEL, SUSTAINABLE TOURISM, HOTEL INDUSTRY, HEDONIC PRICING MODEL, TOURISM COMPETITIVENESS, |
Online Access: | http://documents.worldbank.org/curated/en/099741308242314708/IDU06dbfb6270b9270493609f5b0f9fce7d556a2 https://openknowledge.worldbank.org/handle/10986/40296 |
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Summary: | Voluntary ecolabeling programs have
gained popularity in the tourism industry as initiatives for
promoting ecofriendly practices among tourism firms. Yet,
for these programs to appeal to firms, it is crucial that
they generate positive market benefits for ecolabeled firms.
This paper studies the effect of a sustainable tourism label
on prices of hotel firms. It uses hotel listing data
collected from Booking.com and covering more than 6,000
hotels across 10 popular European cities. The paper finds
that the presence of the ecolabel is associated with a price
premium of approximately 10 percent in the full sample.
However, point estimates of this premium vary across cities,
from a low of 1 percent in Venice to a high of 22 percent in
London. As a novel contribution, the paper shows that the
ecolabel delivers a quantitatively and statistically
significant price premium only in cities where tourism
(destination) competitiveness is high and ecolabel
attainment is low. The paper discusses the implications of
these findings for firms and policymakers in the industry. |
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