Discount Incentives and Hotels' Carbon Reduction: History
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Contributor:
Yaqin Lin
,
Chun-Hung Chiu

To improve carbon reduction efficiency, green hotels adopt cash discount incentives to encourage green customer behavior. An incentive mechanism is a policy or plan that compels individuals to work toward accomplishing a certain goal. In addition to achievement and recognition, monetary and material incentives are the most common incentives in management science. As monetary incentives, discount incentives’ effectiveness in promoting green customer behaviors has been controversial.

  • carbon reduction
  • green hotel
  • discount incentive
  • green customer behavior

1. Introduction

As an energy-intensive industry, hospitality significantly contributes to global climate change by emitting greenhouse gases [1][2]. The previous literature suggests that the hotel industry is the most harmful to the environment and has the highest carbon emissions among all hospitality sectors [3][4][5]. According to an estimate, the hospitality industry is responsible for 21% of all CO2 emissions, with statistics showing that 55.7 metric tons of CO2 comes from the annual consumption of a hotel room stay per guest per night [5][6]. Moreover, this industry’s carbon emissions remain upward [7]. Therefore, carbon reduction has been an issue concerning hotel management.
With the rise in environmental consciousness, customers are increasingly endorsing green hotels [8][9][10]. Green practices tend to be “basic” rather than “plus” in the hotel industry [11][12][13][14]. In 2020, a survey by Booking.com (accessed on 12 February 2020), one of the world’s largest online hotel and accommodation booking platforms, showed that 82% of accommodation partners expect to engage in sustainable-development-related cooperation, such as the Booking Booster Accelerator Program [15]. In addition, Booking.com launched the “Travel Sustainable” program in 2021 [16], and more than 500,000 accommodations have obtained the Sustainable Travel label for their sustainable practices [17]. These accommodations can choose from 32 sustainability practices—selected for their high-impact potential and validated by independent sustainability experts [18]. These practices include providing customers with recycling bins, avoiding the use of disposable products (e.g., straws, water bottles, cutlery, and plates), introducing water-saving toilets and showers, providing customers with linen and towel reuse programs or carbon offset programs, and using LED energy-saving bulbs for lighting. Water and energy conservation, linen and towel reuse, and waste reduction have been popular and well-known green practices to reduce carbon emissions for green hotels [18][19][20][21][22][23][24]. Notably, these practices directly relate to hotel guests’ environmentally responsible behaviors.
As a service industry, approximately half of the direct resource consumption of the hotel is related to guest rooms [25]. Thus, hotel carbon reduction needs customers’ participation [26][27][28]. However, a gap between customers’ environmental attitudes and behaviors commonly exists in the hotel context [2][3][24][29][30], that is, the customer environmental attitude–behavior gap. Due to the hedonistic nature of tourism, individuals tend to behave less environmentally while staying in hotels, thereby consuming more resources and emitting more greenhouse gases [31][32]. For example, lodging customers, particularly those who stay in a highly rated hotel (upscale/luxury), are likely to have pleasure-seeking behavioral tendencies (e.g., taking long relaxing baths daily) that increase water use [21]. These customers usually consume more water than they normally do at home [24], thus emitting more gray water and increasing carbon emissions.
Contrary to the hedonism of tourism, participation in green hotel practices often requires customers to restrict their behaviors. It may involve several sacrifices that are specific to those hotels. These sacrifices take the form of inconvenience, lesser quality, or less luxury [33]. For example, many hotels adopt linen and towel reuse programs, encouraging customers to reduce their linen and towel replacement frequency. For this, instead of washing towels and linens daily, these programs wash them on an on-call basis, inconveniencing customers. Similarly, implementing other common green practices, such as low-flow faucets, showerheads, and toilets, can also cause inconvenience to customers. In addition, some hedonic customers complain about the quality of disposable utensils’ recyclable materials [14].
Prior studies argue that incentive mechanisms can trigger green customer behaviors such as linen and towel reuse, water and energy conservation, and waste reduction [34][35], which are helpful for hotel carbon reduction. Berezan et al. [36] suggested that the most popular incentive for customers to participate in green practices is receiving cash discounts. Ting et al. [37] also found that most customers favor cash discounts over eco-friendly substitutes, which is consistent with the conclusion drawn by Frey and Jegen [38]. According to Booking.com’s (accessed on 15 May 2023) 2023 Sustainable Travel Report, which targeted over 33,000 travelers from 35 countries and regions worldwide, finding more rewarding sustainable travel options has become the choice of travelers more and more while facing economic pressure, such as rising daily expenses [17]. This report shows that 32% of Chinese travelers would choose sustainable travel options with discounts and economic rewards; meanwhile, 31% of Chinese travelers noted that earning bonus points that can be used to redeem free additional benefits or discounts on online travel booking websites also motivates them to travel more sustainably. However, some scholars argue that cash discount incentives are ineffective in promoting green customer behavior [34][39][40][41]. Their studies cannot explain why some customers are still willing to participate in green practices under cash discount incentives.
The “Value–Attitude–Behavior” theory, propounded by Homer and Kahle [42], manifests that individuals’ values have a significant influence on their decision-making processes [43][44]. To be effective, the hotel must make incentive mechanisms add value to customers [45][46]. As mentioned, customers primarily seek pleasure in hotels, while participating in green practices can involve several sacrifices. Additionally, prudent customers know that participating in green practices can save hotels significant costs [34][39][40][41]. Therefore, participating or not participating in green practices could be the value trade-off results of customers under cash discount incentives. Before engaging in green behaviors, some customers would probably balance the relationship between cash discounts and the value sacrificed for the hotel.

2. Green Hotels and Environmental Practices

The term “green hotel” has been described with alternative nomenclatures in the hospitality industry, including “eco-friendly hotel” [43] and/or “environmentally friendly hotel” [47] and/or “sustainable hotel” [48]. The Green Hotel Association [49] referred to green hotels as “environmentally friendly properties whose managers are eager to institute programs to save water, save energy, and reduced solid waste while saving money—to help protect our one and only earth”. As a widely adopted definition, it has effectively highlighted that the primary purpose of environmental management practices in the hospitality industry is to minimize environmental damage [33]. Among the environmental practices commonly implemented by green hotels, linen and towel reuse programs, waste reduction, and water and energy conservation need customers’ cooperation [19][21][23][24][34]. Further, the previous literature suggests that these practices significantly affect hotel carbon reduction.
Adopting linen and towel reuse programs can help green hotels to save water and energy, reduce detergent use, and lower gray water generation, thereby reducing carbon emissions [19][21]. According to the Green Lodging Calculator [20], with a towel and linen reuse program, a 150-room hotel could save 210,000 gallons of water and 143 gallons of detergent per year in addition to the energy saved. In addition, Yadav et al. [10] also argued that green hotels have successfully been managing their internal waste, thus reducing electricity and water consumption. The ITC Hotel Group, the giant of the Indian hotel industry, has become the largest “water-positive” company in the world and has gained the status of “carbon-positive” by creating certifiable CO2 credits [43].
However, there is a widespread gap between customers’ environmental attitudes and behaviors in the three mentioned dimensions of green practices. For example, Chan et al. [50] found that only 33% of customers participate in linen and towel reuse programs offered by more than 75% of hotels. In addition, Untaru et al. [24] found that some customers, although displaying great concern for the environment in the household, generally show lower intentions toward water conservation behavior in a hotel context. Therefore, triggering green customer behavior has concerned hotel management and scholars.

3. Discount Incentives and Green Customer Behavior

An incentive mechanism is a policy or plan that compels individuals to work toward accomplishing a certain goal [37]. In addition to achievement and recognition, monetary and material incentives are the most common incentives in management science. As monetary incentives, discount incentives’ effectiveness in promoting green customer behaviors has been controversial. Based on the motivation crowding effect, some scholars argue that extrinsic monetary interventions lower intrinsic motivation [34][38][51]. Some have suggested that environmental protection is based on individuals’ free will instead of cash incentives [34][39]. However, the motivation crowding effect cannot explain why most customers still favor cash discounts [36][37] nor why green hotels still implement discount incentives.
Conversely, Ting et al. [37] found that cash discount incentives moderate the relationship between hotel guests’ desire intention and behavioral intention in pro-environmental behaviors (i.e., staying in green hotels). Nevertheless, their study did not expound criteria for dividing high and low discounts.

This entry is adapted from the peer-reviewed paper 10.3390/su151612222

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