WILLINGNESS TO PAY MORE

FOR

‘GREEN’ HOTELS

By

Dimitriy Sinkov

RESEARCH PROJECT SUBMITTED IN FULFILLMENT OF THE

REQUIREMENT FOR THE DEGREE OF BSc (Hons) IN INTERNATIONAL

HOSPITALITY MANAGEMENT

(First copy)

in the

School of Hospitality, Tourism and Leisure Management

SUNWAY UNIVERSITY

MALAYSIA

July 2011

CONTENTS

List of Figures......................................................................................................................... i

List of Tables.......................................................................................................................... ii

Acknowledgements............................................................................................................. ...iii

Abstract..................................................................................................................................1

Chapter I – Introduction.........................................................................................................2

1.0 Introductory Phase................................................................................................2

1.1 Research Problem.................................................................................................4

1.2 Research Purpose.................................................................................................7

1.3 Significance of Study...........................................................................................7

1.4 Research Questions..............................................................................................8

Chapter II – Background and Literature Review...................................................................9

Chapter III – Methodology....................................................................................................18

3.0 Study Area...........................................................................................................18

3.1 Procedure and Time Frame..................................................................................19

3.2 Scope and Limitations..........................................................................................21

Chapter IV – Results..............................................................................................................23

Chapter V – Conclusion and Recommendations...................................................................54

5.0 Introduction of Chapter V....................................................................................54

5.1 Perception of ‘green’ standard charges for hotels................................................54

5.2 Key attributes to the ‘green’ hotel practices.........................................................65

5.3 Conclusion............................................................................................................69

5.4 Recommendations................................................................................................72

References............................................................................................................................. .73

Appendix A – Survey Sample Page 1....................................................................................79

Appendix A – Survey Sample Page 2....................................................................................80

i

LIST OF FIGURES

Fig. 2.0....................................................................................................................................25

Fig. 2.1.......................................................................................................................... ..........26

Fig. 2.2.............................................................................................................. ......................27

Fig. 2.3....................................................................................................................................28

Fig. 2.4....................................................................................................................................30

Fig. 2.5....................................................................................................................................30

Fig. 2.6....................................................................................................................................31

Fig. 2.7....................................................................................................................................32

Fig. 2.8....................................................................................................................................33

Fig. 2.9....................................................................................................................................35

Fig. 2.10.................................................................................................................... ..............36

Fig. 2.11..................................................................................................................................37

Fig. 2.12.................................................................................................................... ..............39

Fig. 2.13..................................................................................................................................40

Fig. 2.14.................................................................................................................... ..............41

Fig. 3.0....................................................................................................................................42

Fig. 3.1....................................................................................................................................43

Fig. 3.2....................................................................................................................................44

Fig. 3.3....................................................................................................................................45

ii

LIST OF TABLES

Table 1.0.................................................................................................................................24

Table 2.0.................................................................................................................................29

Table 2.1.................................................................................................................................32

Table 2.2.................................................................................................................................34

Table 2.3.................................................................................................................................34

Table 2.4.................................................................................................................................38

Table 2.5.................................................................................................................................40

Table 3.0.................................................................................................................................46

Table 3.1.................................................................................................................................47

Table 3.2.................................................................................................................................48

Table 3.3.................................................................................................................................49

Table 3.4.................................................................................................................................50

Table 3.5.................................................................................................................................51

Table 3.6.................................................................................................................................52

Table 3.7.................................................................................................................................53

iii

Acknowledgements

Many people have made this research possible and I owe them all a debt of gratefulness. An enormous

amount of work went into this research, I and without further ado, I would like to thank the following

persons:

My supervisor, Ms Rita Lo, for her belief, encouraging support, patience and

confident outlook at all times during this task. Her academic guidance and help - I feel

enormously honoured and extremely lucky to be her student.

Datuk Peter Brokenshire, General Manager of Kuala Lumpur Convention Centre, for

his time to share with me opinion and outlook on the hospitality industry in terms of

‘green’ practices.

Mohd Norzainiazzwa Mohmad, Executive – Membership Development from

Malaysian Association of Hotels, for assistance with identification of ‘green’

certified hotels in Klang Valley.

Special thanks to Jenny Ng-Blandford and Shamani Devi, from Creative Event

Solutions (EVENTION) for their advise, recommendations, and hospitality.

All the Staff, of Sunway University, School of Hospitality, Tourism & Leisure

Management.

All my friends at Sunway University, swimming buddies, and high school

classmates, for help, support, encouragement and belief. Particular thanks go to

Gabriel Tan, Dilky Amarakoon, Tien Jinq Liew, KarMern Choong, Deniz Lam,

Carmen Izzalia, Paula Ribka, Barbara Ann Mathews, Valerie Anthony, Vaageesan

Ganeesan and others…

All the respondents who have contributed to this research by filling up the

questionnaire.

Finally, and most importantly, I am massively obliged to my family, especially Nataliya Sinkova, Alexey

Sinkov, grandma Svetlana Azimova, and my cats, for all their love, support, patience, inspiration,

motivation, time and financial support, as to allow me to write this thesis in time for submission date.

1

Abstract

This research project is carried out to study respondents‟ interest towards „green‟ hotels,

through paying more for „green‟ hotels. An amount that respondents are willing to pay more

for „green‟ hotels is to be found through primary data collection (distribution of

questionnaires) to the citizens, residents and tourists within Klang Valley Region of

Peninsular Malaysia. Research aims to contain about 300 valid responses to be analysed and

evaluated. The research is expected to return positive result, with majority of the respondents

willing to pay more for „green‟ hotels, to encourage hotels that do not yet have „green‟

practices in place to change the way they run their operations, by turning to environmental

practices approach.

2

Chapter I – Introduction

1.0 Introductory Phase

Ever since the early sixteen hundreds, the first taverns and inns begun to appear and serve

important, indeed pivotal role of temporary accommodation for travellers. With years, the

industry has grown significantly in terms of service trends, luxuries, magnitude and

importance. Much later, only in the late ninety‟s had the various concerns relating to

excessive carbon emissions which pollute the environment and the living species were

observed by the scientists. This has resulted in the development of „green‟ projects and

associations for environmental protection.

With recent years, there are more organisations, companies and businesses who decide to

become eco-friendly („green‟) in order to market themselves better and boost their reputation.

According to USGBC‟s reports, it is estimated by the year 2010, there will be about 100,000

LEED-certified commercial buildings and over 1 million LEED-certified household units

built. It is 100 times more in comparison to the year 2007.

A LEED stands for Leadership in Energy and Environmental Design. It is a “Green Building

System, that encourages and accelerates global adoption of sustainable green building and

development practices through the creation and implementation of universally understood

and accepted tools and performance criteria”, as defined by U.S. Green Building Council.

According to study done by J.D. Power and Associates 2007 North American Hotel Guest

Satisfaction shows that almost three quarters of all the hotel guests surveyed, are willing to

participate in their hotel's environmentally friendly programs. This suggests that customers

are well aware of the current environmental concerns. Such information can come from

various media sources ranging from black and white written newspapers to more

3

technologically advanced internet advertising and the television (Butler, 2008). Another

source states that 16 percent of hotel‟s guests stay with the hotel because of their eco-minded

practices (survey done by Kimpton Hotels and Restaurants). These include the use of

nontoxic cleaning agents and in-room recycling bins (Olson, 2007)

Retrofitting or building from scratch a LEED-certified project requires additional funds.

Despite cost saving factors, a hotel must charge their guests more for the services and

accommodation, due to higher start-up or upgrade costs. Hotels should learn ways to promote

and „deliberately encourage‟ their guests, that by paying a higher price for the room or

services, in return promises them a safer environment to live in.

The research question would be such, as to find respondents‟ willingness to pay more for

„green‟ hotels. By looking into the economic theories, when there is a demand – there is a

supply. Similarly, awareness of global warming has created interest and desire of guests‟ to

participate in environmental programs. Meaning that the demand exists, and if it exists,

guests should be willing to „sacrifice‟ slightly more for „green‟. For example, Miller‟s (2003)

research showed that „consumers are already making decisions, based on environmental,

social and economic quality for day-to-day products and are keen to transfer these habits to

the purchase of tourism products‟ (Miller, 2003:17). Miller‟s research shows that 78% of

respondents did either always or sometimes look for environmental information about their

intended holiday destination (Miller, 2003: 291). Similarly, an Italian Environmental

Protection Agency reported that interest in eco-labels has increased and that 73% of

interviewees preferred eco-labelled hotels (Sloan et al, 2009). In more detail this and other

matters will be discussed later in the text.

4

1.1 Research Problem

There are a few problems to the reason behind doing this research. One of them is the

scarcity/shrinkage of natural resources in the past decade that has been primarily caused by

deforestation for various construction projects of leisure and business intentions as well as

increased travel (transportation). The hospitality industry is among the most energy-intensive

sectors of the tourism industry, and the prevalence of fossil-fuel-generated power and the

(still) marginal use of renewable energy resources translate into emissions of carbon dioxide,

particulates, nitrogen and sulphur oxides, and other air pollutants. It is estimated that a typical

hotel annually releases between 160kg - 200kg of 𝐶𝑂2 per m2 of room floor area, depending

on the fuel used to generate electricity, heating, or cooling (Bohdanowitcz, 2005).

European hotels consume 39TWh (terawatt hours) of energy annually, half of which is in the

form of electricity (Bohdanowitcz, 2005).European hotels are responsible for 13.6 megatons

of 𝐶𝑂2 (Verlag, 2003) being released annually. In Asian countries, energy consumption could

even be higher than the figures in European hotels, as many of the Asian countries are 2nd

world countries (developing), and would generally tend to consume more fossils. South East

Asia in particular, is a region where humidity and weather temperature are generally high. An

extensive use of air conditioning is practiced at every home, businesses and industries. In

European countries, heating can be electric as well as gas and water piped, air conditioning

on the other hand is solely energy-intensive, and uses CFC (chloro-floro carbons) which are

toxic and destroy ozone layer. This results in a lot greater damage to the environment.

Water consumption (in terms of overall amounts and use patterns) depends not only on the

type, standard, and size of facility, but also on services and facilities offered, climate and

irrigation needs, and any water conservation practices. It is estimated that, depending on the

hotel standards, guests generally consume between 170 and 130 litres of water per night

5

(Verginis and Wood, 2001). By comparison, a recent report from European hotel chain

provided a figure of 440 litres per guest-night (Radisson SAS, 2002), while another source

reports a consumption of 224 litres per guest night (Scandic Hotels AB, 2000). In South East

Asian region, in particular Malaysia, water consumption per guest-night could even be

higher, due to the high humidity and exotic nature of the country that requires guests to

consume water for various personal needs a lot more often. Also, as the public is a lot less

educated about water management practices and subsidies from the government in Malaysia,

as compared to the European countries.

Because hotels are large users of consumer goods, waste generation is probably the most

visible effect that the hotel industry has on the environment. According to one estimate, a

typical hotel produces in excess of 1kg of waste per guest per day, which results in tons of

waste each month. A large proportion (50% to 60%) of materials that constitute this waste,

could in fact be recycled or reused (Smith et al, 1993; Smith-Jessup, 1998; IHEA, 2002). The

average quantity of unsorted waste materials for Radisson SAS hotels was reported as 3.1kg

per-guest night in 2002, for an instance, Scandinavian and German facilities producing

considerably less waste (1.5kg per guest-night) than the corporate average (Radisson SAS,

2002). Best practices in waste minimisation and recycling have shown that waste generation

can be limited to 50g of unsorted waste per guest-night (Sanga Saby Course & Conference,

2002).

This in turn has created enormous volumes of waste materials and polluted the surrounding

environment (Rubio et al, 2007). Due to land scarcity, land, costs more to be purchased, and

thus building „green‟ hotel will further require stronger financial support.

Another reason is „greening‟ of hotel is in its infant stages, and due to this, only a small

percentage of hotels in the world that can be classified as „„Truly Environment Friendly‟‟,

6

meaning they are up to the top standards of the „green‟ certification systems by various

associations for environmental concerns. An example can be LEED-Gold or LEED- Platinum

certified establishment. EarthCheck - Gold and Platinum certification.

Another, the most influential factor for why „green‟ management is at its infant stages in the

hospitality industry, is because of high premium costs of 10-15% involved in building or

retrofitting (Butler, 2008). However, these figures are before the year 2000. From the 21st

century onwards, these premium costs have dropped significantly (USGBC, 2009), although,

not many current operating hotels can afford to terminate business to retrofit the

establishment, for they will be losing customers and revenue, if they were to do so.

7

1.2 Research Purpose

The idea behind this research is to investigate the possibility of guests, travellers and other

persons who use the facilities and services provided by the hospitality industry, in particular

hotel accommodation and services, to a willingness to pay more for „green‟ hotel. The

willingness to pay (WTP) more in this context is referred to guests‟ staying at the hotels that

practice „green‟ management in order to conserve the environment and help to save the

natural resources, since these resources are being misused (Bohdanowicz, 2005).

1.3 Significance of Study

The objective of the research is to find a diplomatic solution for both hoteliers and

environmentalists. From scientific point of view, going „green‟ will be effective in the long

run to the ecosystem as a whole. From economic point of view, resources necessary to reach

the targeted figures set by the organisations and associations, as threshold values, may be

proven to be unprofitable in short term. Some of these organisations and associations are:

USGBC, IHEM, ISO, Green Globe 21, Green Seal, Greenblue, Green Label, Eco Logo,

Design for Environment, LEED-EB, Greenstar Certified, Green Guard and many more. In the

long run this may be more practical, although the shareholders and the stakeholders of such

businesses may not want to invest any funds into this relatively new strategy.

The idea behind performing such a research is to discover customers‟ attitudes towards

„green‟ hotels. The only reason to encourage many or preferably all hotels to practice even

slight „green‟ management is by customers demand and willingness to help the businesses to

achieve these goals. Such a method is: if customers agree to pay more for the hotels and also

the services provided by the „green‟ hotels, this could encourage or be used as a motive to

8

other competing hotels to step up and get certified. In a way, this is a win-win situation.

Customers are willing to pay more for better and healthier environment, and on the other

hand by paying more, hotels can use these „extra‟ earnings for enhancing their „green‟

practices and also giving back to the public in a form of public relations (eg. donations,

complimentary, discounts, sponsorships).

1.4 Research Questions

The research questions are based on the above mentioned.

The most influential and imperative question of the research will be: “Are the customers

willing to pay more to stay at a hotel that practices „green‟ management or in fact is „green‟

certified?”

Following this question, will be: “If customers are willing to pay more to stay at a hotel that

practices „green‟ management or is „green‟ certified, how much more are they willing to pay

for it, and if they are not willing to pay more – what is/are the reason(s) behind it?”

This is to actually find the motives and key factors that can be stimulated and learned by the

hoteliers to know their customers better.

Last but not least, will be the question asking: “How would the customers prefer hotels to

utilise the financial support that they extend their hand to, be used by the hotels, and will

paying more act as a springboard to encourage more hotels to get certified?”

9

Chapter II – Background and Literature Review

In this literature review, some of the current trends in hotel industry towards „green‟

management, hotels interest and contribution to support the idea of eco-friendly-profit-

friendly (“Eco-Friendly and Budget-Friendly”, 2009), what benefits does „green‟

management holds and of course customers‟ desire to pay more for „green‟.

First and for most, it is necessary to mention, that many authors who have written on a

matter of „green‟ and eco-friendly businesses, in particular the hotel industry, are all being

very optimistic and very supportive with a „Green Businesses‟ idea (Butler, 2008; Saunders,

2009). Thomas Friedman, in the April of 2007, has said his famous phrase „green‟ is the new

red, white, blue and all the other colours.

What are „green‟ hotels? According to “Top Canadian Hotels”, „green‟ hotels are defined as

“environmentally friendly properties that take the initiative and implement very important

practices and programs to reduce energy, water, and waste”. Not all „green‟ hotels have the

same practices as it depends on the decisions made by management and hotel‟s regulations

and level of their commitment and potential. Effective „green‟ hotels will try their best to

attain as many methods as possible. These can include the various recycling programs (eg.

paper, plastic, and glass), linen changing programs (linen are being changed less than once a

day, unless requested by the guests), energy saving lighting throughout the hotel with motion

sensors in parts of the hotel, when not in use. Water taps in the guests‟ rooms to have motion

sensors built in so that water only pours in the case when a guest reaches for a tap, similarly

guest room key cards are used to activate the electricity in the room. Some „green‟ hotels try

to send a message out to their guests on how to be eco-friendly and how the hotel is doing its

part in protecting the planet. As said by Heisterkamp, “backing up green claims is critically

10

important, metrics and verification ensure credibility”. Third-party verification of claims can

help in this.

Starting off on the good note, having hotel that is LEED-certified will result in enormous cost

savings in the operation and running of the hotel (Butler, 2008). Many chain-affiliated hotels

integrate environmental issues in their company policies, which usually are imposed on

individual establishments (Bohdanowicz, 2005). It is important for large companies to

vivaciously display environmental and social commitment and achievements on top of a good

financial statement. On the contrary independent hotels are least interested with

environmental concerns and interest to act, since it potently depends on managers‟ outlook

and acquaintance (Bohdanowicz, 2005).

Different countries have their own polices and regulation for „green‟ certification standards

apart from those licensed associations for environmental protection, that has been mentioned

earlier in the text. Ecomark schemes in various countries have more or less the same criteria.

Taken from the Ecomark Scheme of India, following are the criteria

5.3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16 Leather

Wood Substitutes

Cosmetics

Aerosol Propellants

Plastic Products

Textiles

Fire-extinguisher

Lubricating Oils

Packaging Materials

Architectural Paints and Power Coatings

Batteries

Electrical/Electronic Goods

Food Additives

Product General Requirements

Criteria of the Product

Categories covered under

the scheme.

Soaps & Detergents

Paper

Food Items

11

The most prominent benefits of „green‟ as mentioned above are the operational costs. To

briefly sum them up, they would look like this: 30 to 50 percent savings in energy use, up to

35 percent in carbon emissions, 40 percent in water, and 70 percent for solid waste (Butler,

2008; Yudelson, 2009). These results are achieved with the introduction of new and

improved technologies, materials and techniques. The best environmental policy does not

help much if employees do not understand the philosophy and goals behind it and do not

know how to attain these goals. Employees, expected to achieve and implement certain

initiatives, need to have proper skills, knowledge, motivation and awareness thereof (Green

Hotelier, 2007b). Hence, environmental training should be conducted on a regular basis, at

the same time be enjoyable, while involving and motivating staff in order to achieve best

results.

Some of the current trends why hotels go „green‟ are because „green‟ hotels produce very

hospice working environment (Wallace, 1987). 1% increase show tremendous impact (Butler,

2008). Plus, there are advantages in attracting and retaining employees who want to work in a

„green‟ building (Butler, 2008). A better use of daylight, can allow in more of natural sunlight

to reduce eye strain, better use of shade by planting more trees in open air areas. Superior

heating and ventilation systems to allow more fresh air into the premise to prevent staff from

asphyxiating or fainting; minimizing the use of toxic materials such as cleaning agents and

powerful detergents, instead using some alternate materials. Use of low-emission adhesives,

sealants, paints, carpets, keeps the environment on the inside cleaner and more pleasant for

employees to work in (Environmentally Friendly Hotels, 2010)

The report noted that there have been thousands of studies finding significantly reduced

illness symptoms, reduced absenteeism, and increases in perceived productivity, as compared

to workers in buildings without „green‟ features (Butler, 2008).

12

Some of the smartest business people are now going „green‟. They are Marty Collins, CEO of

Gatehouse, goes green with $800 million hotel mixed-use project in Hollywood, California.

Barry Sternlicht with "1" hotels does the same (Butler, 2008). It is partially due to

significantly lower cost premium in building „green‟. Years earlier when all these concepts

were relatively new, cost premiums were in range of 10-15%. At present times, these

numbers have reduced drastically to a mare 1-2% on LEED-certified projects. In some cases

they were equivalent to a zero (USGBC, 2009). Partially, the reason to change is to be

socially responsible.

Taken from USGBC‟s official website, a LEED certification “provides independent, third-

party verification that a building project meets the highest „green‟ building and performance

measures.

There are obviously signs of increasing number of „green‟ businesses (USGBC, 2009),

however, they must be equally efficient in terms of comfort and service offered to the public

and their customers. Hoteliers might think of „green‟ as an upgrade and therefore requires

higher prices being charged, while the clientele might think of it otherwise.

Even though, that „green‟ advertising numbers have increased in recent years, both in printed

media and television, (Banerjee, and Gulas 1993), not much is known about the comparative

persuasiveness of different appeals for dissimilar target audiences (Lefkoff-Hagius, 1995).

Customers differ in their knowledge of and concern about the environment. Customers can be

classified according to their level of commitment for an environment based on various

attitudes and behaviours (Roper Organization, 1992). A few researches have been done to

show correspondence in dispersion through environmental concern (Durand and Ferguson

1982; Samdahl and Robertson 1989; Webster, 1975; Wysor, 1983). In the overall, the

findings have shown that the frequency of customer participation in environmental sector is

13

directly proportional to their interest in the purchase of „green‟ products (Lefkoff-Hagius,

1995).

According to Borchers et al. (2007, p.3327), an existing research reports positive willingness

to pay (WTP) for green energy electricity premia. These studies elicit WTP for various

aspects of green energy, where „„green energy‟‟ is a generic product (Byrnes et al., 1999;

Ethier et al., 2000; Gossling et al., 2005; Zarnikau, 2003) or focus on the environmental

attributes associated with green energy (Bergmann et al., 2006). As for this research,

information about customers‟ mindset which is mentioned above, gives slight evidence that

customers might be willing to pay more for „green‟ hotels. Willingness-to-pay can be defined

as “the amount an individual is willing to pay to acquire some good or service. This amount

can be elicited from the individual‟s stated or revealed preferences” (Sloan et al., 2009).

According to Richardson, a study conducted on climate change and recreation benefits in an

Alpine National Park, have shown that temperature and precipitation were statistically-

significant determinants of WTP. An increase in recreation benefits of 4.9% and 6.7% for

two climate change scenarios have been estimated. This data can be related to resort hotels,

that have golf course or other outdoor activities. In particular, countries in the South East

Asian region (eg. Malaysia) enjoy such privileges of warm weather throughout the year. On a

contrary, higher temperatures caused more harm to some of the resorts in colder regions of

Europe and Canada.

The customers‟ desire to pay more for „green‟ hotel could be determined by internal and

external factors (Alba, Hutchinson, and Lynch, 1991). Internal, arise from personal

characteristics such as values and prior beliefs. In turn this suggests that consumers who have

strong beliefs about the environment are likely to pay attention to the environmental

attributes of products. On the other hand, external arise from a variety of factors such as

advertisements, personal selling, and word of mouth. Thus, consumers who do not have

14

strong beliefs about the environment may also be directed to pay attention to environmental

attributes of products (Alba, Hutchinson, and Lynch, 1991).

LOHAS is an acronym for Lifestyle of Health and Sustainability – a multi-billion market

segment in the United States alone. It aligns itself with the groups such as New Age belief

with environmentalist interest groups and the alternative medicine movement. It is a market

place for goods and services that appeal to consumers who value health, the environment,

social justice, personal development and sustainability. These consumers are variously

referred to as culturally creative, conscious citizens who are willing to pay more for goods

that are deemed sustainable. Approximately 19% of the adults in the United States are

currently considered LOHAS (LOHAS, 2009).

Hotel properties where practices are environmentally sensitive will have an advantage in the

marketplace over rival properties. According to the Travel Industry Association of America,

within the United States alone there are 43 million people that are self-proclaimed “eco-

tourists” who are willing to pay 8.5% more for environmentally sensitive travel suppliers

(TIAA, 1992). In a survey of US business travellers (Watkins, 1994) 75% of respondents said

they were environmentally minded consumers and 54% said they were environmentally

minded travellers. Of the sample, 71% of respondents said they would prefer to stay at the

hotels that show concern for the environment. On the other hand though, majority were not

willing to pay extra for their accommodation in order to fund these „green‟ policies and only

28% would be prepared to pay between $5 and $10 extra. According to survey done by Adam

Weissenberg, Deloitte Tourism, Hospitality and Leisure leader, 28% of U.S. business

travellers surveyed are willing to pay 10% more to stay at a green hotel. A study done by

GfK, “willingness to pay more for a certification of Corporate Social Responsibility (CSR)

practices scored 36% of CSR-interested tourists willing to open their pocketbook for the

piece of paper (compared to 15% of general travelling population). Thus, a property that

15

institutes eco-friendly practices and communicates those efforts to the general public can gain

an access to a growing market segment (Iwanowski and Rushmore, 1994).

Apart from the lifestyle that people chose to live, concept of eco-label does assist the

customer with making the right choice. Eco-label is a brand that is placed on a product,

service or organisation. The purpose of an eco-label is to allow the consumer to choose the

product, service or company that is recognised to be the most environmentally involved

(Sloan et al, 2009).

The trend towards environmental certification, or eco-labelling as it is commonly known, has

increased greatly in the last 20 years, primarily because it is an important promotional tool for

sustainable tourism and hospitality (Sloan et al, 2009). All of the eco-labels have three key

functions in common, these are: environmental standard setting; third-party certification of

these standards; and value-added marketing or environmental communication. In order to be

qualified for and certified with any eco-label, a hotel would have to reach set environmental

standards. The actual certification process makes sure that all required criteria are met before

a hospitality company is awarded the eco-label (Sloan et al, 2009).

However, there is over a 100 eco-labels worldwide, and over 60 just in Europe, the hotel or

restaurant guests may struggle to identify which labels are valuable and credible and which

are not (Sloan et al, 2009). It is claimed by the industry observers that few hotels use their

labels as marketing tool even when environmentally certified. The problem being that the

public and industry are confused by the message the labels are designed to convey. VISIT

(the Voluntary Initiative for Sustainability in Tourism) was set to overcome this confusion,

whereby various eco-labels are advisory via VISIT when they meet a particular requirement

level. An advisory board including World Tourism Organisation (WTO), United Nations

16

Environmental Programme (UNEP) and European Hotel and Restaurant Association

(HOTREC), are just a few who supports VISIT (Sloan et al, 2009).

The labels are often too expensive for individual hotels especially when cost/benefits are not

properly understood. They also tend to attract customers interested in eco-tourism and have

limited marketing power. The goal envisaged by eco-label certification as a sustainability tool

has not yet been effectively reached (Sloan et al, 2009). Arguably, local and regional

certification programs should be linked to an international accreditation system.

The Green Globe 21 scheme was designed to overcome these difficulties, because the label

claims to be global. The Figure graph below shows Green Globe certification in different

regions of the world (Sloan et al, 2009).

Popularity of the Green Globe Label. Based on Green Globe (2006) and WTO (2005).

The popularity in Europe and Pacific can be explained. Green Globe 21 is headquartered in

Australia, thus has its popularity in that region. In Europe on the other hand, there are other

more popular eco-labels such as ECEAT and Blue Flag.

17

In addition to the eco-labels that are designed specifically for hospitality, travel and tourism

industries, the International Organisation for Standardisation has developed certification that

do not apply to one industry in particular. ISO 14001 and 14004 both define the

specifications and guidelines for an Environmental Management Systems (EMS)

implementation, while the standards ISO 14010, ISO 14011 and ISO14012 define the

principles and procedures of environmental audits, as well as the qualification criteria of the

auditors (ISO, 2009).

18

Chapter III – Methodology

The purpose of this research is to investigate the possibility of guests, travellers and other

persons who use the facilities and services provided by the hospitality industry, in particular

hotel accommodation and services, to a willingness to pay more for „green‟ hotels.

3.0 Study Area

An area of the research will be conducted in the Peninsular region of Malaysia. Specifically

this will be done in the Klang Valley region (Wilayah Persekutuan and Selangor states). A

minimum of 10 hotels will be studied in each of the states and will include both business and

resort hotels. The reason for doing the research in the Klang Valley region is because the

concentration of many business hotels and human traffic is in this area. Another reason is

because, the metropolitan area is considered the most pollutant area of the cities, due to many

businesses operating side by side, producing more waste and using more resources to stay

competitive. As for resort hotels, many of which are located further away from the city

centre, and too, have many customers. Resorts are usually larger establishments because they

have more activities for their guest to do, larger number of guests, up to 1000 or more at any

one time and their demands. This tends to overuse resources available.

The business hotels that will be studied are JW Marriot Kuala Lumpur, The Westin, Grand

Millennium, Berjaya Times Square, Corus, Citrus, Hilton, Pyramid Tower and Imperial.

Leisure & Resort hotels are: JW Marriot Putrajaya, Palace of The Golden Horses, Sunway

Resort and Spa, Holiday Villa, Saujana.

19

3.1 Procedure and Time Frame

The method of data collection for this research will largely lay in the survey form

distribution. Surveys will be randomly distributed to hotel guests of various nationalities and

demographics, to find out who is willing to contribute to „green‟ concept. Not only, but it will

give a less bias results. Surveys are to be filled in anonymously by the guest on the spot, and

if guest have any doubts or questions about the research or questions, they are free to ask.

Each guest will be given one survey questionnaire to complete (written in pen).

An emphasis will be mostly on people of age groups 25-50 and 51 and above, with various

backgrounds. This is because people in these age categories are the most frequent hotel and

recreation visitors. Youth, 25 years and below will be studied less detailed than others.

Surveys will consist of at least 10 questions having both – objective and subjective questions.

Each survey should take no more than 10 minutes to be completed.

Besides distribution of surveys to the guests, questioning/interviewing of General Managers

or any other higher level representative will be performed (in the hotels listed in the study

area), depending on their availability and interest to comment.

Data collected from both, guests and hoteliers, will be analysed manually to bring out the

conclusion. The software used for the compilation of surveys collected from guests will be

input into the SPSS or other relevant software for the purpose of statistical data results. Result

comparisons will be done to answer the research questions and perhaps other side

information about the trends (if any).

All surveys collected from guests will be attached as an appendix to the final report as a proof

of the study done, along with other relevant information.

20

A research will be done in the Klang Valley region of Peninsular Malaysia, with a total

population in this area of 5,245,053 (1,297,526 in Kuala Lumpur and 3,947,527 in Selangor),

according to statistical data taken from Statoids.com.

Having a population size of more than 1 million and less than 5 million, the minimum sample

sizes for confidence interval of ± 5% and ± 1% on a sample finding of 50% will be: 384 (for

± 5%) & 9584 (for ± 1%) respectively.

This means a minimum of 384 surveys must be distributed to have a legitimate research

results. However, for this research a minimum of 500 surveys will be distributed to allow

more variance and more detailed research. This research is to be performed in a time frame of

second quarter of 2010 through second quarter of 2011.

Funds and resources required for a research:

Paper Cost - printing of surveys (double sided print, one sheet per survey); Travelling Cost –

public transport (train and bus); Inventory costs – pens for customers to fill up the surveys.

Paper cost RM50

Travel by train RM30

Travel by bus RM10

Inventory cost RM20

Total Cost RM110.00

The contribution made will only include self transportation to the hotels in the Klang Valley

region of Peninsular Malaysia, permission from the hoteliers to conduct a research in their

respective hotels and their willingness to interview them.

21

As for a desired outcome of this research, expectations would be to find positive relationship

between customers‟ willingness to pay more for „green‟ hotels and hoteliers stimulus to

engage in environmental practices as a result of customers‟ desire to spend more.

From the literature review, going „green‟ gives a competitive edge to hotels, also, it was said

that customers are becoming more aware of eco-friendly concepts and practices, and show an

elevated interest towards it. If the research will prove the idea, this could revolutionise the

hospitality industry in unimaginable ways. Not only hotels and customers will benefit from

such changes, but this will create a row of new job opportunities for the public and safer,

healthier environment to work and live in for present and especially future generations.

3.2 Scope and Limitations

Limitations of the research are mostly in the area of performing this research in public places

(eg. shopping malls, streets). As initially planned, respondents had to be hotel guests

interviewed at the hotels. Unfortunately, due to unawareness of hotels‟ policies, no third party

is allowed to conduct a research (surveying guests) at the hotels. This was a limitation as over

five dozen copies of questionnaire have been distributed to hotel representatives to assist with

the research, although none of them made it back.

A limitation of performing such a research at the shopping malls, and streets, required to

evaluate people based on their looks, behaviour and dressing, in order to approach

respondents who are aware of the subject. Unfortunately, many still, have rejected to answer

the survey. This resulted in more time to be spent to collect appropriate number of responses.

22

Many Malaysians presumed that they were going to be asked to make a donation for a charity

or orphanage, when they were approached for the reasons to answer the survey. Foreigners on

the other hand were only unwilling to do this survey, due to the language barrier.

Unavailability of hoteliers (General Managers) to be interviewed, have had an effect on the

research question, as it is difficult to state whether from a hotelier‟s perspective, customers‟

willingness to pay more for „green‟ hotels will in fact encourage hotels to be more

environmentally friendly and proudly show off their certification from independent third

party organisations for their „green‟ efforts.

Despite Malay community contributing to over 60% of the nation‟s population, in this

research, they are represented by 61 respondents (22.85%). For the reasons that research has

been mostly conducted near hotels and in shopping malls of the Golden Triangle and Subang,

the concentration of Malay is significantly lower in such areas. Also, a number of Malay

respondents have said they do not speak English, therefore were unable to complete a

questionnaire. The research questionnaire was only conducted in English form and was not

translated into the national language (Bahasa Melayu) to assist the Malay community better

to understand the questionnaire. Malaysian Chinese, constitute the largest portion of

Malaysians surveyed, for the reasons that most of them are employed in the private sector,

unlike Malay community who are mostly employed in the government sector, were easily

available and approachable. Malaysian Chinese contributed to 41.95% of all the respondents.

Such variance can be seen as bias, although on the other hand – it is not. Reasons being, as

research was conducted in the areas as proposed in the proposal, this distribution in fact

shows how Malaysian community has separated itself, with different nationalities working

and living in different parts of the Klang Valley region.

23

Chapter IV - Results

The research questions are based on the above mentioned.

The most influential and imperative question of the research will be: “Are the customers

willing to pay more to stay at a hotel that practices „green‟ management or in fact is „green‟

certified?”

Following this question, will be: “If customers are willing to pay more to stay at a hotel that

practices „green‟ management or is „green‟ certified, how much more are they willing to pay

for it, and if they are not willing to pay more – what is/are the reason(s) behind it?”

Last but not least, will be the question asking: “How would the customers prefer hotels to

utilise the financial support that they extend their hand to, be used by the hotels, and will

paying more act as a springboard to encourage more hotels to get certified?”

In this chapter tables and diagrams will be used to represent the various demographic factors,

as well as relationship and distribution between different aspects of the research questionnaire

(eg. respondents‟ age group, their willingness to pay for „green‟ hotels, and their interest in

participating in environmental programmes carried out by hotels, are just some of the aspects

that will be looked into. An in-depth analysis of these aspects will be looked at more closely

in Chapter V (page 54).

Over 500 questionnaire samples were distributed in a physical and electronic form. About

10% of all questionnaires were recovered via electronic source, the remaining 90 were

answered with a pen on paper. A total of 267 questionnaires were analysed in this research,

from over 300 answered questionnaires by respondents.

Table 1.0 on the following page, briefly summarises the demographic factors and aspects of

the respondents.

24

Frequency Percent (%)

Valid

Percent (%)

Cummulative

Percent (%)

Gender Female 127 47.6 47.6 47.6

Male 140 52.4 52.4 100

Total 267 100 100

Frequency Percent (%)

Valid

Percent (%)

Cummulative

Percent (%)

Nationality Foreigner 60 22.47 22.47 22.47

Malaysian Chinese 112 41.95 41.95 64.42

Malaysian Indian 19 7.12 7.12 71.54

Malaysian Malay 61 22.85 22.85 94.38

Malaysian Other 15 5.62 5.62 100

Total 267 100 100

Frequency Percent (%)

Valid

Percent (%)

Cummulative

Percent (%)

Age 25 & below 86 32.21 32.21 32.21

26 to 40 108 40.45 40.45 72.66

41 to 60 71 26.59 26.59 99.25

61 & above 2 0.75 0.75 100

Total 267 100 100

Frequency Percent (%)

Valid

Percent (%)

Cummulative

Percent (%)

Household

Income RM3,000 & below 103 38.58 38.58 38.58

RM3,001 to RM4,500 43 16.1 16.1 54.68

RM4,501 to RM6,000 48 17.98 17.98 72.66

RM6,001 & above 73 27.34 27.34 100

Total 267 100 100

Frequency Percent (%)

Valid

Percent (%)

Cummulative

Percent (%)

Mode of

Travel Business 28 10.49 10.49 10.49

Leisure and Business 20 7.49 7.49 17.98

Honeymoon 1 0.37 0.37 18.35

Leisure Family /

Couple 156 58.43 58.43 76.87

Leisure Individual 41 15.36 15.36 92.13

Leisure Family /

Couple & Individual 5 1.87 1.87 94.01

Other travel

(undefined) 12 4.49 4.49 98.5

Education 4 1.5 1.5 100

Total 267 100 100

Table 1.0 - Demographic Statistics

25

The Fig. 2.0 above, shows the frequency of the respondents in respect to their gender.

Females contribute to a total percentage of 47.57% (127 respondents), whilst males

contribute to a total percentage of 52.43% (140 respondents).

26

Fig. 2.1 shows Foreigners (non-Malaysian citizens), and Malaysians in this research.

Foreigners (have been grouped together for convenience of data analysis) include

(American, British, Australian, Canadian, Chinese, Danish, Egyptian, French, German,

Indian, Indonesian, Iranian, Japanese, Jordan, Kenyan, Korean, New Zelander, Pakistan,

Russian, Singaporean, Sri Lankan, Swiss, Ukrainian, Yemen).

Malaysians were divided into their respective ethnic groups. From graph, Malaysian Chinese

contribute to the largest sample or respondents, with foreigners and Malaysian Malay, second

highest.

27

Fig 2.2 shows bar graph for distribution of age groups of the respondents. Ages 26 to 40

years have most number of respondents, and whilst 61 years and above has the least number

of respondents.

28

Fig 2.3 above, represents the household income of the respondents. Where majority of

respondents have a household income of RM3,000 and below, whilst category RM3,001 to

RM4,500 has the least number of respondents.

29

A Table 2.0 above and Fig. 2.4 on the following page, shows the respondents‟ preferred

mode of travel. Leisure Family/Couple is the most preferred mode of travel for respondents,

with business travel being second most preferred.

30

Fig. 2.5 shows that majority of the respondents have not stayed at an eco-friendly hotel.

31

In Fig. 2.6 above, respondents‟ preference towards paying more for „green‟ hotels is shown.

Most of the respondents are willing to pay more for „green‟ hotels.

32

From Fig. 2.7 above and Table 2.1 below, show that most of the respondents prefer to pay

less than 5% of the cost more for „green‟ hotels, whilst only two are willing to pay exactly

2% of the cost more for „green‟hotels.

33

Fig 2.8 above and Table 2.2 on the following page, both show reasons of respondents who

are unwilling to pay more to stay at a „green‟ hotel are mostly due to their financial status.

And only a few have no interest in „green‟ at all.

34

The Table 2.3 above, shows the varience between respondents who are unwilling and willing

to pay more. Table 2.3, will be explained in more detail in Chapter V (page 54)

Table 2.3 - Variance between respondents who are unwilling and

willing to pay more

less than

5% 5-10%

Other

amount 2% Total

Willing to

pay more no 8 3 0 0 11

Total 8 3 0 0 11

How much more willing to pay

35

Fig 2.9 above, shows respondents who are in favour and disfavour for all hotels to go „green‟.

With majority who want all hotels to go „green‟.

36

Fig. 2.10 above, shows respondents‟ green hotel consideration. Majority of respondents are

not willing to make „green‟ hotel as their top priority when selecting a hotel to stay at.

37

Fig. 2.11 above, shows that majority of the respondents are unaware of „green‟ certified

hotels in Malaysia or abroad. Ecologo – Canada, Blauer Engel – Germany,Green Seal –

United States, Green Globe 21 (Earth Check) – Australia, Green Hotels (by Ministry of

Tourism Malaysia) are all examples of „green‟ certifications.

38

Table 2.4 shows that Shangri-La and Holiday Inn are best known „green‟ certified hotels by

respondents.

Frequency Percent Valid PercentCumulative Percent

Shangri-La 11 4.12 4.12 82.14

Holiday Inn 7 2.62 2.62 35.52

Mines Wellness Hotel 3 1.12 1.12 57.72

Frangipani Langkawi Resort & SPA 2 0.75 0.75 48.84

Hilton 2 0.75 0.75 19.98

JW Marriott 2 0.75 0.75 42.18

Sunway Hotel Resorts & Spa 2 0.75 0.75 91.02

Tune 2 0.75 0.75 97.68

Baros Maldives 1 0.37 0.37 2.22

Belamar Hotel California 1 0.37 0.37 4.44

Belum Rainforest Resort 1 0.37 0.37 6.66

City Hotel Seoul, Korea 1 0.37 0.37 8.88

Courtyard by Marriott Chevy Chase 1 0.37 0.37 11.11

Eastin 1 0.37 0.37 13.32

Equatorial 1 0.37 0.37 15.54

Hotel Penagu 1 0.37 0.37 37.74

Kandalama (Sri Lanka) 1 0.37 0.37 44.4

Le Meridien 1 0.37 0.37 51.06

Sheraton 1 0.37 0.37 84.36

Salah Phuket Thailand 1 0.37 0.37 86.58

Tanjung Aru Resort 1 0.37 0.37 93.24

Westin 1 0.37 0.37 100

Total 45 16.79 16.79

Table 2.4 - Hotels that respondents feel are 'green' certified

39

Fig. 2.12 above, shows opinion of respondents, and most of them feel that paying more will

motivate hotels to go „green‟

40

Fig. 2.13 above, shows that majority of respondents feel today‟s hotel industry is slightly and

not at all „green‟.

Table 2.5 shows that majority of respondents want hotels to utilise the money to enhance

„green‟ practices.

Frequency Percent (%)

Valid Percent

(%)

Cumulative

Percent

Enhance 'green' management

programmes 59 22.1 22.1 35.98

Give back to the public 58 21.72 21.72 71.39

Provide incentives/loyalties 40 14.98 14.98 95.76

Enhance „green‟ management

programmes & give back to public 4 1.5 1.5 98.2

Other (various) suggestions 2 0.75 0.75 99.42

Give back to public & provide

incentives/loyalties 1 0.37 0.37 100

Total 165 61.42 61.42

Table 2.5 – Respondents’ opinion on how 'extra' money should be utilised

41

Fig. 2.14 shows that respondents are quite willing to participate in environmental protection

programmes carried out by hotels.

42

Fig. 3.0 above, shows that there is almost equal number of respondents for each gender who

are willing to pay more.

43

Fig. 3.1 shows that majority of respondents who are willing to pay more are foreigners,

Malaysian Chinese and Malaysian Malay, whilst the others are less likely to pay more.

44

From Fig. 3.2, Foreigners and Malaysian Malay are mostly represented by male respondents,

whilst majority of Malaysian Chinese, Indian and others, are represented by females.

45

Fig. 3.3 shows that majority of respondents whose household incomes are above RM3,001

are more likely to pay more as compared to those who‟s household income is below

RM3,000.

46

Table 3.0 above, shows that most of the foreigners have a household income of RM6,001 and

above, whilst other nationalities are mostly of household income levels of RM3,000 and

below.

Table 3.0 – Distribution of respondents’ household income levels and

their nationality

RM3,000

& below

RM3,001

- 4,500

RM4,501

- 6,000

RM6,001

& above Total

Nationality Foreigners 15 5 13 27 60

Percentage(%) 5.62 1.87 4.87 10.11 22.47

Malaysian Chinese 53 15 16 28 112

Percentage(%) 19.85 5.62 5.99 10.49 41.95

Malaysian Indian 9 5 2 3 19

Percentage(%) 3.37 1.87 0.75 1.12 7.11

Malaysian Malay 20 15 13 13 61

Percentage(%) 7.49 5.62 4.87 4.87 22.85

Malaysian Other 6 3 4 2 15

Percentage(%) 2.25 1.12 1.5 0.75 5.62

Total 103 43 48 73 267

38.58 16.1 17.98 27.34 100

Household income

Total Percentage (%)

47

From Table 3.1 above, majority of the respondents with income levels of less than RM4,500

are in age group of 26 to 40 years. Whilst majority of respondents of ages 41 to 60 years have

household income of RM4,500 and above.

Table 3.1 – Distribution of respondents’ household income and their age group

RM3,000

& below

RM3,001

- 4,500

RM4,501

- 6,000

RM6,001

& above Total

Age 25 & below 62 7 5 12 86

Percentage (% ) 23.22 2.62 1.87 4.49 32.2

26 - 40 31 28 19 30 108

Percentage (% ) 11.61 10.49 7.12 11.24 40.46

41 - 60 10 8 23 30 71

Percentage (% ) 3.75 3 8.61 11.24 26.6

61 & above 0 0 1 1 2

Percentage (% ) 0 0 0.37 0.37 0.74

Total 103 43 48 73 267

38.58 16.11 17.97 27.34 100

Household income

Total Percentage (% )

48

Table 3.2 above, shows that most of the respondents of age 26 to 40 years are Leisure

Family/Couple travellers. Respondents of ages 41 to 60 years are business travellers.

Table 3.2 – Distribution between respondents preferred mode of travel and their age group

25 & below 26 - 40 41 - 60 61 & above Total

Travel Business 5 11 12 0 28

Percentage (% ) 1.87 4.12 4.49 0 10.48

Leisure and Business 3 12 5 0 20

Percentage (% ) 1.12 4.49 1.87 0 7.48

Honeymoon 0 1 0 0 1

Percentage (% ) 0 0.37 0 0 0.37

Leisure Family/Couple 54 67 35 0 156

Percentage (% ) 20.22 25.09 13.11 0 58.42

Leisure Individual 17 11 12 1 41

Percentage (% ) 6.37 4.12 4.49 0.37 15.35

Leisure Family/

Couple & Individual 1 1 3 0 5

Percentage (% ) 0.37 0.37 1.12 0 1.86

Other travel (undefined) 4 3 4 1 12

Percentage (% ) 1.5 1.12 1.5 0.37 4.49

Education 2 2 0 0 4

Percentage (% ) 0.75 0.75 0 0 1.5

Total 86 108 71 2 267

32.2 40.43 26.58 0.74 100

Age group

Total Percentage (% )

49

From Table 3.3 above, most of the foreigners are business travellers, whilst all Malaysians

are mostly Leisure travellers.

Table 3.3 – Distribution of respondents’ mode of travel and their nationality

Foreigners

Malaysian

Chinese

Malaysian

Indian

Malaysian

Malay

Malaysian

Other Total

Travel Business 13 9 1 5 0 28

Percentage (% ) 4.87 3.37 0.37 1.87 0 10.48

Leisure and Business 4 9 1 6 0 20

Percentage (% ) 1.5 3.37 0.37 2.25 0 7.49

Honeymoon 1 0 0 0 0 1

Percentage (% ) 0.37 0 0 0 0 0.37

Leisure Family/Couple 27 66 12 41 10 156

Percentage (% ) 10.11 24.72 4.49 15.36 3.75 58.43

Leisure Individual 6 19 4 8 4 41

Percentage (% ) 2.25 7.12 1.5 3 1.5 15.37

Leisure Family/

Couple & Individual 0 4 0 1 0 5

Percentage (% ) 0 1.5 0 0.37 0 1.87

Other travel (undefined) 6 4 1 0 1 12

Percentage (% ) 2.25 1.5 0.37 0 0.37 4.49

Education 3 1 0 0 0 4

Percentage (% ) 1.12 0.37 0 0 0 1.49

Total 60 112 19 61 15 267

22.47 41.95 7.1 22.85 5.62 100

Nationality

Total Percentage (% )

50

Table 3.4 above, shows that majority of the respondents who are unwilling to pay more are of

ages up to 40 years of age. Whilst 41 and above are less unwilling to pay more.

Table 3.4 – Relationship between unwillingness to pay more and age group of the respondents

25 & below 26 - 40 41 - 60 61 & above Total

Why not

pay more?

Financial status,

Hotels generate sufficient profits,

I do not see why I have to pay

for the hotel's actions 0 0 1 0 1

Percentage (%) 0 0 0.37 0 0.37

Financial Status 13 21 5 0 39

Percentage (%) 4.87 7.87 1.87 0 14.61

I have no interest in

hotels' 'green' practices 6 1 1 0 8

Percentage (%) 2.25 0.37 0.37 0 2.99

Other (undefined) reasons 0 3 4 0 7

Percentage (%) 0 1.12 1.5 0 2.62

Hotels generate a sufficient

annual income 4 4 4 0 12

Percentage (%) 1.5 1.5 1.5 0 4.5

I do not see why I have to pay

for hotel's actions 14 15 7 0 36

Percentage (%) 5.24 5.62 2.62 0 13.48

Total 37 44 22 0 103

13.86 16.48 8.23 0 38.57Total Percentage (%)

Age

51

Table 3.5 above, shows that respondents who are willing to pay the most are of ages 41 to 60,

whilst ages 26 to 40 are more willing to pay less than 5%.

52

From Table 3.6, foreigners and Malaysian Chinese are the respondents who are most likely to

pay 5% to 10% more for „green‟ hotels as compared to other nationality groups.

53

Table 3.7 shows that majority of respondents feel that energy saving and 3R (Reduce, Reuse,

Recycle) are most important environmental conservation practices as compared to water and

waste management.

Energy saving Other reasons

Importance level5 101 8

Percentage (% ) 37.83 3

4 52 2

Percentage (% ) 19.47 0.75

3 51 2

Percentage (% ) 19.1 0.75

2 20 4

Percentage (% ) 7.49 1.5

1 43 251

Percentage (% ) 16.1 94.01

Ranking №1 №5

Total 267 267

100 100Total Percentage (% ) 100 100 100

№2 №4 №3

267 267 267

30 43 36

11.24 16.1 13.48

46 40 46

17.23 14.98 17.23

44 59 58

16.48 22.1 21.72

47 63 58

17.6 23.6 21.72

100 62 69

37.45 23.22 25.84

Table 3.7 - Respondents view on areas hotels should emphasise on improving

Areas to emphasise on enhancing

3R Waste management Water management

54

Chapter V – Conclusion and Recommendations

5.0 Introduction of Chapter V

This chapter will further elaborate and justify the research questions based on the findings in

Chapter IV.

The finding consists of three major areas, which cover the willingness to pay for „green‟

hotels, average rate for „green‟ hotel, and key attributes for „green‟ hotel practices.

5.1 Perception of ‘green’ standard charges for hotels

Based on Fig. 2.0 (page 25), which shows gender distribution of the respondents. Ratio of

male to female in this research study is 1.10. An allowed percentage variance is anywhere in

the range of 30%. Ratio of 1.10 is a 4.87%, which can be considered insignificant. Thus

making the gender distribution relatively balanced, resulting in less bias results amongst the

two genders.

When a relationship between gender and willingness to pay more was made as shown in Fig.

3.0 (page 42), responses were almost identical. There was no skew of the graph towards

either gender. However, according to this research study, males were just slightly more

unlikely to pay more as compared to females. More or less, the results are relatively balanced,

and both genders are equally likely to pay and not to pay more for „green‟ hotel.

From Fig 2.1 (page 26) showing nationality distribution of the respondents, the following was

derived. The study primarily focuses on studying the trends and attitudes of people towards

„green‟ hotels. Therefore any resident or tourist of Malaysia is eligible to take part and be

included in this research, irrespective of their nationality and country of citizenship.

55

Foreigners, whose nationalities were mentioned in Fig. 2.1, were grouped together as their

nationalities individually constitute for a very small percentage, and due to the fact that this

study does not particularly look into the demographics of different foreign nationalities.

However, due to research area of this project is based in Klang Valley (Peninsular Malaysia),

local community represents the largest portion of respondents and also looks into their

different nationalities, as in Malaysia, there are officially 3 different ethnic groups living in

the country, each having their own communities and unique lifestyles. The study also groups

all the Malaysians in this study to compare a cumulative Malaysians trend towards research

questions objectives.

As Malaysian Indian are one of the lowest percentage of population living in Malaysia

compared to other nationalities, respectively, in the research, they too, represent the minority

(7.12% of all respondents). Similarly, Malaysians of mixed nationality represent the minority,

and in this research are represented by only 5.62% of all respondents.

A relationship between respondents‟ nationality and willingness to pay was illustrated in Fig.

3.1 (page 43). Ratio of foreigner to willingness to pay is as follows: 12 respondents said „No‟

and 48 respondents said „Yes‟, a ratio of 4. Malaysian Chinese who have said „No‟ were

represented by 56 respondents and 57 respondents said „Yes‟, a ratio of 1.02. Malaysian

Indian respondents who said „No‟ were 8, and those who said „Yes‟ were 11, a ratio of 1.38.

Malaysian Malay community has answered in the following way: 24 „No‟ and 37 „Yes‟, a

ratio of 1.54. Other Malaysians were 4 to say „No‟ and 11 to have said „Yes‟, a ratio of 2.75.

In the overall, ration for Malaysians that are willing and unwilling to pay more for „green‟

hotels, is 1.27. These figures suggest that Malaysians are less likely to be paying more for

„green‟ hotels as compared to foreigners.

56

In accordance to Table 3.6 (pg. 52), foreigners and Malaysian Chinese are amongst the top

respondents who are willing to pay more for „green‟ hotels. With 19.10% of foreigners and

23.22% of Malaysian Chinese. Malaysians in total would contribute to 46.44% of all

respondents who are willing to pay more for „green‟ hotels, which is more than twice the

number of foreigners. Although, as mentioned above, ratio wise, foreigners are more likely to

be contributing as compared to Malaysians.

In order to understand who are the respondents of different nationalities and ethnicity groups

are, Fig. 3.2 (page 44) helps to see the distribution. As it can be seen, majority of foreigners

and Malaysian Malay are males, while Malaysian Chinese, Malaysian Indian, and other

Malaysians, with majority of women as respondents for the ethnicity group. This once again

suggests that there is no biases among genders and nationalities as well as who are the target

market for hotels to focus on.

Respondent preference in the practice of ‘green’

Apart from spending power of the respondents, it is also important to know, who are the

respondents that prefer business or leisure travel in relationship to their nationalities. As it

was already stated in Table 3.3 (page 49), leisure travel with family or spouse is the most

preferred travel of all the respondents surveyed. This proves the fact that Malaysia is well

known for its blend of multicultural society, with beautiful landscapes and architecture that is

one of many elements that attracts about 25 million tourists every year. Despite results being

as such, it is important not to omit business travel from the big picture, as Malaysia plays a

host to major sporting, engineering and Information Technology events in the South East

Asian region.

In Fig. 2.2 (page 27) that shows distribution of age groups of the respondents. Straight away,

the point should be brought to the age group of 61 year and above. Previously, in the research

57

proposal, it was stated that research will primarily focus on ages 26 to 50 and above,

however, as respondents were required to provide their e-mail address as verification and

authentication procedure, and respondents over the age of 61 were not able to provide one. A

number of respondents who have either looked to be over the age of 61, or those who initially

did a survey, but such survey was not valid for a research, due to missing e-mail field. In this

research only 2 respondents of this age group, contributing to a total percentage of only

0.75% have had an e-mail address to prove their questionnaire.

As previously mentioned, ages 25 an below were to be paid less attention as ages 26 to 50,

therefore, ages 25 and below contribute to 32.21% whilst sum of age groups of 26 to 40 and

41 to 60, contributed to 67.04% of all respondents.

Reasons as to why there are only four age group categories, and why such categories were

divided in such a way, is because: people of ages 25 and below, are mostly students of

schools, colleges and universities, as well as fresh graduates with less than 3 years of working

experience. Which could suggest that they are least likely to visit hotels and especially be

very concerned about „green‟ hotels and willingness to pay more, due to relatively low levels

of exposure to the industry and lower spending power. Students of universities and colleges

are more likely to attend house parties and visit cinemas, F&B outlets, bars and amusement

parks, therefore the relevance towards hotel‟s „greening‟ practices are not directly related to

their interest of activities. A fact that international students of the universities as well as local

students who have knowledge and interest in today‟s world of environmental protection

programmes, cannot be neglected.

Ages 26 to 40, would be mostly young families and working class of people, who are more

likely to travel for leisure and business purposes, thus have higher potential to spend more on

„green‟ hotels and aware of the current hotel trends and practices. Ages 41 to 60 is assumed

58

to be people with families whose children are in their teenage years, resulting in a completely

different trend in travel needs and spending levels, also, people of such age group category

are more likely to be of a higher managerial positions, which should result in higher spending

power and greater knowledge of environmental protection.

Respondents of the ages 61 and above are people who are soon to retire or already retired,

and frequently travel in pairs or groups around the world. This suggests that they have the

exposure to the various cultures and means of doing work, thus making them more

knowledgeable of environmental protection programmes and health safety.

Relationship between respondents‟ gender and the type of travel that they prefer is illustrated

in Table 3.2 (page 48). This table suggests that travellers of the ages 41 to 60 are more likely

to go on leisure travel with their family or spouse with a ratio of 2.03, as compared to 26 to

40 years age group ratio of 1.61 and 25 years and below with ratio of 1.59.Respondents of

age group 26 to 40 years are just slightly outnumbered by respondents of ages 41 to 60 years

with 4.12% and 4.49% of all the respondents respectively.

By looking at Fig. 2.3 (page 28) showing household income of the respondents. Initially the

report was asking for individual‟s income level, however due to majority of the respondents

voicing out their discontent, saying that it intrudes their privacy and that it should be asking

for household income level instead. Therefore the questionnaire has been mended to be less

personal and more appealing to respondents. The purpose of asking for income levels of the

respondents was solely for the purpose of identification of different classes of people and

whether it has significant effect which will influence them to pay or not to pay more for

„green‟ hotels. Respondents with household income levels of RM3,000 and below were

represented by majority (38.58%) followed by 27.34% of respondents with household income

59

levels of RM6,001 and above. Respondents earning RM3,001 to RM4,500 and RM4,501 to

RM6,000 were almost on par with 16.10% and 17.98% respectively.

Reasons as to why the income levels have been grouped in such a way are explained as

follows: RM3,000 and below, would mostly be applicable to the respondents who are under

the age of 25 and early 30‟s as these people would tend to be young working adults who are

living away from their parents or are staying together with their spouse. RM3,001 to

RM4,501 would be more applicable to respondents who have started families and have

children. As such individuals would already be working for at least 5 years, and have stable

career path. RM4,501 to RM6,000 would be more applicable to respondents of age 41 and

above, as they are more likely to be adults with at least 10 years of working experience and

are more likely to be of managerial positions, thus is their income levels to be higher. Income

levels of RM6,001 and above, was mostly for respondents who are of higher managerial

position and have one family member working and another taking care of children, as well as

foreigners working in Malaysia and tourists or business travellers from overseas.

To make things more clear, it was important to see if the above mentioned was accurately

reflected relationship between respondents‟ nationalities and household income levels.

From Table 3.0 (page 46), we can see that majority of the respondents have a household

income of RM3,000 and below, contributing to 38.58% of all respondents. The household

income category that had fewest respondents was RM3,001 to RM4,500, with only 16.1% of

all respondents. RM6,001 and above in household income, contributed to a total percentage

of 27.34% of all respondents. Solely based on the information presented in Table 3.0,

foreigners and Malaysian Chinese are respondents with the highest household income levels.

Another bar graph is necessary to make a statement whether respondents with higher income

levels are more likely to be paying more for „green‟ hotels. Fig 3.3 (page 45) shows just that.

60

There is a clear difference in the income levels and respondents‟ willingness to pay more for

„green‟ hotels. The ratio of respondents willing to unwilling is the highest in respondents with

household income levels of RM4,501 to RM6,000. A ratio of 2.69 or 72.92% of respondents

in this group who are willing to pay more. Respondents with household income levels of

RM6,001 and above is the second highest group in terms of willingness to pay, with a ratio of

1.76 or 63.01% of respondents that are willing to pay more.

As before mentioned, people of household income levels of RM4,501 to RM6,000, are

people of ages 41 to 60 years of age, who would mostly be represented by a family of 3 to 4,

with children in their teen years, resulting in higher spending and different trends in travel

and knowledge of the environment.

Tables 3.4 (page 50) and Table 3.5 (page 51) both quite clearly show that respondents of the

age group 41 to 60 years of age, are the potential hotel guest that are most likely to pay more

for „green‟ hotels. Table 3.4 shows that age group 41 to 60 years, has the lowest percentage

of respondents that are unwilling to pay more, with 8.23%, as compared to the other two age

groups whose percentages are 13.86% for 25 years and below, and 16.48% for 26 to 40 years.

In Table 3.5, respondents of age group 41 to 60 years are almost on par with respondents of

25 years and below with 19.48% and 19.85% respectively. However this may seem a little

bias, as there are far fewer respondents in age group 41 to 60 years as there is for age group

category of 25 years and below. However, the results are not bias at all when a ratio is taken

into consideration. A ratio of 2.36 is deduced (19.48% ÷ 8.23%), whereas for age group of

26 to 40 years it is a ratio of 1.55 (25.47% ÷ 16.48%), and for 25 years and below it is a ratio

of 1.43 (19.85% ÷ 13.86%). On top of it all, respondents that fall under the age group of 41

to 60, are the respondents with highest percentage, who are willing to pay 5% to 10% more

for „green‟ hotels (10.11%).

61

This can further be supported by Table 3.1 (page 47) where respondents of ages 41 to 60

years are amongst the highest income earners in both RM4,501 to RM6,000 and RM6,000

and above categories, with a percentage of 8.61% and 11.24% respectively.

Table 2.0 and Fig. 2.4 (pages 29 and 30) shows preferred mode of travel of respondents. In

the literature review section of this report, it states that in Unites States, a similar research has

been done on business travellers to find out how much more are they willing to pay for

„green‟ hotels. However, as this research is carried out in Malaysia, who‟s tourist arrivals to

the country have nearly reached 25 million tourists in the recent years, could show that

respondents who are likely to be business travellers is expected to be less. As shown in Table

2.0, the breakdown of different travel types, leisure travellers contribute to a cumulative

percentage of 83.60% (7.5% + 0.4% + 58.4% + 15.4% + 1.9%) of all respondents. Business

travel is the second most preferred mode of travel by the respondents with a cumulative

percentage of 18% (10.5% + 7.5%). Other travel included travelling for sporting events, and

others were left undefined by the respondents. Education was a choice of travel for 4

respondents.

Furthermore, Fig. 2.5 (page 30) shows respondents who have stayed at eco-friendly hotels.

Eco-friendly in this case refers to hotels that are not necessarily „green‟ certified, but also

hotels that have „green‟ practices in place (eg. towel and linen recycling, encouraging guest to

use towels more than once before it is taken for wash cleaning). From this graph, we can see

that majority of respondents have not stayed at such hotels, contributing to just over half of

the respondents (54.29%). This could suggest that many hotels are not being proactive in

terms of going „green‟ and make customers unaware that it is absolutely necessary to

conserve the environment.

62

Willingness to pay for ‘green’ hotel

Fig. 2.6 (page 31) shows respondents‟ willingness to pay more for „green‟ hotels. This is the

most controversial question of the whole research project, as it deals with a sensitive issue

(money) and the reason that should not even be a questionable subject but rather a

compulsory measure. Asking customers for their willingness to pay more for something that

in fact should already cost less, is very subjective and each respondent has their own opinion

about it. Despite all, majority of the respondents are willing to pay more to stay at a hotel that

is either „green‟ certified or practices „green‟ management. These respondents contribute to

61.42%. This figure is not particularly strong to be easily said as Malaysians and foreigners

living, working or visiting the Klang Valley region are definitely willing to pay more for such

hotels. Fig. 2.7 will look a little bit more closely into this.

Fig. 2.7 and Table 2.1 (page 32) shows amount that respondents are willing to pay more for

„green‟ hotels. Majority of the respondents are willing to pay extra no more than 5% of the

cost of the hotel‟s room. 22 less respondents have answered that they are willing to pay in a

range of 5% to 10% of the cost. Respondents who have answered that they are willing to pay

exactly 2%, are the respondents that are most likely to pay those 2% extra as they stated,

because such option was not provided in survey, they were expected to write it in themselves

in a case if they want to pay certain amount for it. Respondents, who have said 5% to 10%,

are most likely to pay a minimum of 5% extra and an average of 7.5% extra for these 75

respondents. Respondents, who are willing to pay less than 5%, are more likely to pay about

3% to 4%.

However, as already mentioned in the literature review earlier in the report, customers

willingness to pay more and their actual spending can vary, therefore it is not possible to say

63

with a 100% assurance that all 165 respondents who are willing to pay more will in fact pay

that amount if hotels were to raise their prices by the amount that guest are willing to pay.

The variance between respondents who are willing to pay more and the respondents who

have written the amount that they are willing to pay varies by 11 respondents. Suggesting that

11 respondents, who are unwilling to pay more, would in fact not mind to pay a little extra.

All of these respondents have said the reason they answered in such a way is, because they

would want hotels to take initiative to go green and not have them (respondents) paying on

their behalf for their actions to „green‟ the hotel. Although if the prices were to increase by

5% or so, they would still be willing to pay more to stay in such hotels.

Fig. 2.8 (page 33) shows respondents who are unwilling to pay more for „green‟ hotels.

Majority of the respondents have highlighted the following reasons as the most influential:

“Financial Status” (14.60%) and “I do not see why I have to pay for hotel‟s actions”

(13.50%). Although these two factors contribute to a cumulative total of 28.50% (14.60% +

13.50% + 0.4%), they are not surpassed by respondents who are willing to pay 5% to 10%

more (28.10%). This suggests that the likelihood of customers paying more for „green‟ hotel

is as likely as customers who are unwilling to pay more for „green‟ hotel. Which tells us that

there is equal number of people who on both sides of the fence.

Another interesting figure to highlight is that, out of 267 respondents, there was 8 who have

no interest in hotels „green‟ practices, contributing to 3.00% of the sample population. This

figure can be considered insignificant, but this figure also shows that research is not too bias,

to a degree that no respondents have no interest in „green‟ hotels.

Table 2.3 is explained on page 34. As many as 8 respondents (3.00%) have stated they would

be willing to pay less than 5% of the cost, and only 3 respondents (1.12%) would settle if the

prices increase by no more than 10%.

64

Fig 2.9 (page 35) shows that well over 80% of all respondents want to see all hotels to be

„green‟ certified or to at least practice some elements. However, a much more insignificant

percentage was recorder by 35 respondents (13.11%). Some of the respondents were those

who are not interested in hotel‟s „green‟ practices (8 respondents), therefore questionnaire

was designed in such a way as to disallow these people to answer some of the questions as

they would not be very relevant. Therefore the remaining 27 respondents, some of whom said

the reason for their choice of answer was: if all hotels were to go „green‟ the hotels would be

slightly more expensive and not very affordable. All but 8 of these respondents were those

who opt to pay more for „green‟ hotels.

In the overall, the trend is a positive one and most of the respondents would be willing to see

hotels taking a step forward towards sustainable future in the hospitality industry.

In Fig. 2.10 (page 36), quite a large percentage of respondents (57.30%) will not consider

„green‟ hotel as their primary choice for hotel, and the remaining 42.70% would actually be

looking forward to „green‟ hotel. What can be said based on the graph, is that awareness level

in Malaysia, is not at a level that would have at least half of the respondents to answer „Yes‟.

This could also suggest that respondents (potential hotel guests) cannot differentiate the

importance of staying at hotels that are „green‟ from those that are not. And could perhaps

mean there are not that many hotels in Malaysia, which practice environment conservation.

According to survey done by Kimpton Hotels and Restaurants, that 16 percent of hotel‟s

guests stay with the hotel because of their eco-minded practices. In this research, over 42% of

people stated that they will consider „green‟ hotels as primary choice. Which could suggest

that response is more positive here in Malaysia. However according to Watkins (1994), 71%

of respondents said they would prefer to stay at the hotels that show concern for the

environment. Which means, in Malaysian context, customers are unlikely to stay at „green‟

hotels as respondents living in America.

65

5.2 Key attributes to the ‘green’ hotel practices

From Fig. 2.11 (page 37), which illustrates that majority of respondents 80.90% do now

know of any „green‟ certified hotels in Malaysia or abroad. 38.20% of Malaysian Chinese,

6.74% of Malaysian Indian, 17.98% of Malaysian Malay and 4.49% of other Malaysians, in a

cumulative total percentage of 67.41%, do not know any „green‟ certified hotels. Foreigners

contributed to a 13.48% in total. However, if these figures were to be looked at in a ratio

form, the figures would look much more different. 180 Malaysian respondents do not know

of any „green‟ certified hotels, versus 27 Malaysians that know of „green‟ certified hotels, in

a ration of 6.67. Foreigners on the other hand that do not know of „green‟ hotels are 36

respondents, and those that know of „green‟ hotels are 24 respondents, with a ration of only

1.5. This tells us that nearly every 2nd

foreign respondent knew of a „green‟ certified hotel,

whilst almost every 7th

Malaysian knew a „green‟ certified hotel. This quite clearly shows the

gap between Malaysians and foreigners, as Malaysians are far less aware of such hotels, due

to various factors that can include hotels‟ publicity and pressure from government to demand

more eco-friendly businesses in the country.

Hotels that were said as „green‟ certified by the respondents are listed in the Table 2.4 (page

38). Shangri-La and Holiday Inn have been listed the most number of times by the

respondents of this research study. 7 and 5 foreign respondents have answered Shangri-La

and Holiday Inn respectively. Unlike Malaysians, have answered twice for each. At least half

of the hotels listed by the respondents are „green‟ certified hotels in Malaysia and/or

overseas. Suggesting that respondents are aware of eco-friendly hotels. Despite that, it is

important to note that Melia hotel (was not mentioned by respondents), Holiday Inn at

Glenmarie, Crowne Plaza have an international „green‟ certification from Green Globe 21.

Shangri-La, Mandarin Oriental and Mines Wellness Hotel have „green‟ certification from

Ministry of Tourism Malaysia – Green Hotels.

66

Melia Hotel Kuala Lumpur, is one of the pioneering hotels in Kuala Lumpur to have „green‟

certification. The hotel also incorporated tree planting program, as their Corporate Social

Responsibility (CSR) on regular basis according to Mohd. Norzainiazzwa Mohmad (2011),

during an interview on 17th June 2011, at Malaysian Association of Hotels Head Quarters.

Surveyed respondents included in this research, have provided almost equal answers when

asked will paying more encourage non eco-friendly hotels to get certified or to start

practicing some environmental programmes. This is illustrated in Fig. 2.12 (page 39). From

such a response it is quite difficult to tell whether hotels would actually be willing to change

their way of running business, although in the eyes of the public, most of them do in fact see

this as a motivation.

‘Green’ certification from EarthCheck

In an interview with Datuk Peter Brokenshire, interviewed by Dimitriy Sinkov at Kuala

Lumpur Convention Centre on 2nd

June 2011, when asked a same question but from a

perspective of a hospitality service provider, did say that it could as well be a good

motivation to encourage hotels to change. However Datuk Peter Brokenshire noted that

hotels should not be looking for customers to reach them, but instead be proactive, provided

they have the financial support to undertake the change. Kuala Lumpur Convention Centre

has an internationally recognised „green‟ certification from EarthCheck, which makes it the

first Convention Centre in Asia to be „green‟ certified. According to Datuk Peter

Brokenshire, the Convention Centre saves millions of ringgit annually by following

regulations of EarthCheck, staff training as well as adding a little touch of their own, by

growing exotic plants on the roof top of the Convention Centre to be used as centrepiece item

for meetings and conferences.

67

Enhance ‘green’ management programmes

When a question came to ask respondents how would they prefer to see the money that they

are willing to pay extra for „green‟ hotels be utilised, is shown is Table 2.5 (page 40).

Majority of respondents stopped with an answer of “Enhance „green‟ management

programmes/practices” 22.10% of respondents, and another 21.72% of respondents said they

would like to see these money go for charities. And almost 15% of respondents said they

would like hotels to provide more of incentives and loyalties in return. Just a few other

respondents have mentioned that if hotels were to use these money to plant trees, they would

be satisfied with the outcome. One respondent said he would like to see a cradle-to-cradle

approach, meaning that if guests are willing to pay more for „green‟ hotel now, in later years,

rooms should cost less, as the hotel‟s operating cost will reduce dramatically. Whichever

answer is to be looked at, the end result, as to what customers wish to see, is that these money

be spent on a good reason, and not viewed as a tip.

Over 30.71% of respondents, in Fig. 2.14 (page 41) would be more than willing to be

involved in environmental protection programmes carried out by hotels, even if it was

required for them to pay a minimal fee to become join. A much bigger percentage of

respondents (49.44%) have their second thought on whether they would join such

programmes for a minimal fee, whereas at least half of the respondents, did wish to join if it

was free of charge. What we can tell from here is that 82 respondents who are willing to join,

would be the target market of people that are truly loyal and supportive of organisations that

help to protect the environment, even one small step at a time. As previously mentioned in

literature review (page 2) in a study done by J.D. Power and Associates almost three quarters

of all the hotel guests surveyed, are willing to participate in their hotel's environmentally

friendly programs. However, according to this research, only about one quarter of all

respondents would join hotel‟s environmentally friendly programs.

68

The ranking of standard ‘green’ practices

Final element to complete the picture is illustrated in Table 3.7 (page 53). From the responses

collected by respondents via completion of questionnaire have highlighted the areas of major

concern for the environment, that they wish hotels would pay closer attention to. The ranking

system was devised in such a way that number 5 would represent the most important factor,

whilst number 1 would represent the least important factor. Respondents who have not

answered this question or left at least one option unranked, were given a value of 1.

Respondents, who have ticked the choices instead of numbering them, were given a value of

5. Each value was calculated and a cumulative highest value of all the respondents for that

particular factor was given a rank. Factor with the highest cumulative value was ranked 1st,

and factor with lowest cumulative value was ranked 5th

.

According to the responses provided by the respondents, energy saving was ranked 1st, with a

cumulative value of (949). Very closely ranked in 2nd

is 3R (Reduce, Reuse, Recycle) with

cumulative total value of 942. The 3rd

was water conservation and management, with

cumulative total value of 879. Waste management was none the less important factor, with

marginally fewer responses and ranked in 4th

with cumulative value of 862. Other reasons

such as planting trees and cradle-to-cradle approach were much less significant, and were

ranked 5th

with cumulative total value of 313. In an interview, Datuk Peter Brokenshire

commented that: “hotels should implement an approach that is the easiest for them to

undertake”. Recycling for an instance, is one of the simplest practices to change towards

environment friendly practices.

69

5.3 Conclusion

From enhanced in depth look of various elements of the research questionnaire, based on

responses by 267 respondents a point to be drawn to conclusion answering the question of

“willingness to pay more for „green‟ hotels”, is indeed supported by the results collected from

the respondents. As over 60% of the respondents have agreed to pay more for „green‟ hotels.

With supporting information from Malaysian Association of Hotels (MAH), in an

AVERAGE OCCUPANCY RATE REPORT 4TH QUARTER 2009/2010 (MAH, 2011)

states of Selangor and Kuala Lumpur have had an average occupancy rate of 78.23% and

71.97% respectively. An average of two would be 75.1%, which is very close to nation‟s

average occupancy rate of 72.28%. Both states have seen an increase in occupancy in

comparison to the same period of previous year (2009), with 5.08% and 2.43% respectively.

An average increase of 3.76%.

According to an AVERAGE ROOM RATE REPORT 4TH QUARTER 2009/2010 provided

by MAH, shows that Selangor‟s and Kuala Lumpur‟s average room rates are RM200.71 and

RM235.40. An average of RM218.06, which is quite a lot more as compared to the nation‟s

average room rate of RM204.73. For state of Selangor, prices have dropped by RM10.01

whilst in Kuala Lumpur prices have gone up by RM6.47 in comparison to previous year

(2009). A RM1.77 drop in average price from previous year (2009).

From the result analysis in Chapter V, it was said that 36.30% of all respondents are willing

to pay less than 5% for „green‟ hotels, and 28.10% of all respondents were willing to pay 5%

to 10% more for „green‟ hotels.

From this information it can be said that respondents who are willing to pay less than 5%

more for „green‟ hotels, would amount to less than RM10.90 (RM218.06 × 4.99%). And

similarly, respondents who are willing to pay 5% to 10% more for „green‟ hotels would in

70

fact be willing to pay RM10.90 to RM21.80. These figures are quite similar to researches

done in United States and part of Europe, by Watkins (1994), Adam Weissenberg, Deloitte

Tourism, Hospitality and Leisure leader, and GfK, where 28% of respondents were in fact

willing to pay 10% more or $5 to $10 more.

This shows that despite regions of the world, frequency of the respondents as well as the

amount they are willing to pay more for „green‟, is quite similar.

A scenario of ‘green’ Value:

Knowing an average occupancy rate, as calculated above (75.1%) and an average room rate

of RM218.06 it is possible to find out the percentage of respondents who would actually be

willing to pay more for „green‟ hotels and how much could the hotel possibly generate in a

year solely from these environment conscious hotel guests paying more.

By performing some basic calculations, hotels could be earning from RM209,290.90 to

RM418,581.80 more per annum only from the 28.10% of respondents who are willing to pay

5% to 10% more to stay at a „green‟ hotel.

It was estimated that these hotels would be „green‟ certified hotels, with an average of 250

rooms, and occupancy rate of 75.10%, out of which, only 28.10% would be guests that are

willing to pay 5% to 10% more, equating to 21.20%.

Calculations are shown below:

𝑇𝑜𝑡𝑎𝑙 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑓𝑜𝑟 5% = 250 𝑟𝑜𝑜𝑚𝑠 × ((28.10% × 75.10%) ÷ 100%) × 𝑅𝑀10.90 ×

7 𝑑𝑎𝑦𝑠 × 52 𝑤𝑒𝑒𝑘𝑠

= RM209,290.90

71

𝑇𝑜𝑡𝑎𝑙 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑓𝑜𝑟 10% = 250 𝑟𝑜𝑜𝑚𝑠 × ((28.10% × 75.10%) ÷ 100%) ×

𝑅𝑀21.80 × 7 𝑑𝑎𝑦𝑠 × 52 𝑤𝑒𝑒𝑘𝑠

= RM418,581.80

According to statistics from Malaysian Association of Hotels, according to March 2011

report, there are 4 „green‟ hotels in Kuala Lumpur and there is only 1 „green‟ hotel in

Selangor. Mines Wellness Hotel (over 100 guest rooms), Melia Kuala Lumpur (300 guest

rooms), Crowne Plaza Kuala Lumpur (560 guest rooms), Holiday Inn at Glenmarie (260

rooms), Shangri-La (662 guest rooms) are some of these hotels in Klang Valley region of

Peninsular Malaysia.

From afore mentioned, hotels might be interested in looking at this trend, of environmentally

cautious consumers, as it could play to their benefit further more. And for hotels that would

be interested in becoming „green‟ certified, could see the benefits that they could get out of

this.

72

5.4 Recommendations

Some of the recommendations that can be listed for future improvement of such a research, is

to try to liaise with hotels in the region, to be able to acquire statistics and information from

actual hotel‟s guests.

Collecting a larger sample of respondents‟ questionnaires, to further verify the ratio of

respondents to their willingness to pay more.

Introducing new questions to the questionnaire asking for respondents‟ profession, how often

they go on travel, as well as how much do they often spend on hotels, and what parts of

Malaysia do they most often visit when stay in hotels, could significantly enhance quality of

the research project.

Environmentally friendly, is part of a „green‟ hotel issue as well. Future researcher should

take this issue into consideration when performing their research project.

73

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