The Value of Going Green in the Hotel Industry: Evidence from Beijing

Abstract

Based on several unique datasets in Beijing, this article investigates the value of going green in the hotel industry by combining the traditional hedonic pricing model with the state-of-the-art content analysis of online reviews. The results indicate that the rate of complaints about the indoor environmental quality of green hotels is roughly 19% lower than that for nongreen hotels. Hedonic regression analysis concludes that green hotels enjoy a significant room rate premium of 6.5% without reducing occupancy rates, mainly due to improved indoor environmental quality. Recognizing the presence of such cobenefits is likely to induce hoteliers to embrace green practices.