IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/10552.html
   My bibliography  Save this paper

Greener Is Not Always Pricier : Ecolabeling and Price Premium in the Tourism Industry

Author

Listed:
  • Bello, Ridwan Bolaji
  • Kassim, Olanrewaju Malik
  • Bello,Sodiq Oladayo

Abstract

Voluntary ecolabeling programs have gained popularity in the tourism industry as initiatives for promoting ecofriendly practices among tourism firms. Yet, for these programs to appeal to firms, it is crucial that they generate positive market benefits for ecolabeled firms. This paper studies the effect of a sustainable tourism label on prices of hotel firms. It uses hotel listing data collected from Booking.com and covering more than 6,000 hotels across 10 popular European cities. The paper finds that the presence of the ecolabel is associated with a price premium of approximately 10 percent in the full sample. However, point estimates of this premium vary across cities, from a low of 1 percent in Venice to a high of 22 percent in London. As a novel contribution, the paper shows that the ecolabel delivers a quantitatively and statistically significant price premium only in cities where tourism (destination) competitiveness is high and ecolabel attainment is low. The paper discusses the implications of these findings for firms and policymakers in the industry.

Suggested Citation

  • Bello, Ridwan Bolaji & Kassim, Olanrewaju Malik & Bello,Sodiq Oladayo, 2023. "Greener Is Not Always Pricier : Ecolabeling and Price Premium in the Tourism Industry," Policy Research Working Paper Series 10552, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10552
    as

    Download full text from publisher

    File URL: https://documents.worldbank.org/curated/en/099741308242314708/pdf/IDU-6dbfb627-b927-4936-9f5b-f9fce7d556a2.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Asche, Frank & Bronnmann, Julia, 2017. "Price premiums for ecolabelled seafood: MSC certification in Germany," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 61(4), October.
    2. Ruben, Ruerd & Fort, Ricardo, 2012. "The Impact of Fair Trade Certification for Coffee Farmers in Peru," World Development, Elsevier, vol. 40(3), pages 570-582.
    3. Woo Gon Kim & Jun (Justin) Li & Jin Soo Han & Yunkyong Kim, 2017. "The influence of recent hotel amenities and green practices on guests’ price premium and revisit intention," Tourism Economics, , vol. 23(3), pages 577-593, May.
    4. Yang, Yang & Mueller, Noah J. & Croes, Robertico R., 2016. "Market accessibility and hotel prices in the Caribbean: The moderating effect of quality-signaling factors," Tourism Management, Elsevier, vol. 56(C), pages 40-51.
    5. Abrate, Graziano & Viglia, Giampaolo, 2016. "Strategic and tactical price decisions in hotel revenue management," Tourism Management, Elsevier, vol. 55(C), pages 123-132.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ibrahim Mohammed & Basak Denizci Guillet & Rob Law & Wassiuw Abdul Rahaman, 2021. "Predicting the direction of dynamic price adjustment in the Hong Kong hotel industry," Tourism Economics, , vol. 27(2), pages 346-364, March.
    2. Loïc Lévi & Jean Jacques Nowak & Sylvain Petit & Hakim Hammadou, 2022. "Industrial legacy and hotel pricing: An application of spatial hedonic pricing analysis in Nord-Pas-de-Calais, France," Tourism Economics, , vol. 28(4), pages 870-898, June.
    3. Zhao, Zhang & Fu, Chunyu & Chen, Ming-Hsiang & Yang, Yang, 2025. "Curiosity and hotel revenue management challenges: Dynamics of opaque and low-end products," Annals of Tourism Research, Elsevier, vol. 111(C).
    4. Sébastien LEFRANG, 2025. "Effets de la localisation du patrimoine culturel et naturel sur la tarification hôtelière en région Provence-Alpes-Côte d’Azur : une analyse des prix hédoniques," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 61, pages 161-178.
    5. Ante Mandić & Lidija Petrić, 2021. "The impacts of location and attributes of protected natural areas on hotel prices: implications for sustainable tourism development," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 833-863, January.
    6. Aldric Vives & Marta Jacob & Marga Payeras, 2018. "Revenue management and price optimization techniques in the hotel sector," Tourism Economics, , vol. 24(6), pages 720-752, September.
    7. Josep Lladós-Masllorens & Antoni Meseguer-Artola & Inma Rodríguez-Ardura, 2020. "Understanding Peer-to-Peer, Two-Sided Digital Marketplaces: Pricing Lessons from Airbnb in Barcelona," Sustainability, MDPI, vol. 12(13), pages 1-19, June.
    8. Jack (Peiyao) Ma & Andrea Mantovani & Carlo Reggiani & Annette Broocks & Néstor Duch-Brown, 2024. "The Price Effects of Prohibiting Price Parity Clauses: Evidence from International Hotel Groups," Economics Series Working Papers 1043, University of Oxford, Department of Economics.
    9. Henri Kuokkanen & Jean-Pierre Van der Rest, 2022. "Game—Gimme a Better Price! A Negotiation Role Play on B2B Pricing in Hotel Revenue Management," INFORMS Transactions on Education, INFORMS, vol. 23(1), pages 46-55, September.
    10. Seneshaw Tamru & Bart Minten, 2023. "Value addition and farmers: Evidence from coffee in Ethiopia," PLOS ONE, Public Library of Science, vol. 18(1), pages 1-21, January.
    11. Eva Boonaert & Charline Depoorter & Axel Marx & Miet Maertens, 2024. "Carrots rather than sticks: Governance of voluntary sustainability standards and farmer welfare in Peru," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(6), pages 6471-6492, December.
    12. Chiputwa, Brian & Spielman, David J. & Qaim, Matin, 2015. "Food Standards, Certification, and Poverty among Coffee Farmers in Uganda," World Development, Elsevier, vol. 66(C), pages 400-412.
    13. Marcello Risitano & Rosaria Romano & Vincenzo Rusciano & Gennaro Civero & Debora Scarpato, 2022. "The impact of sustainability on marketing strategy and business performance: The case of Italian fisheries," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1538-1551, May.
    14. Taotao Deng & Chen Gan & Yukun Hu, 2021. "Do hotel business benefit from increased tourist accessibility? Evidence from China’s high-speed railway program," Tourism Economics, , vol. 27(7), pages 1357-1374, November.
    15. Thi Minh Chi Nguyen & Li-Hsien Chien & Shwu-En Chen, 2015. "Impact of certification system on smallhold coffee farms` income distribution in Vietnam," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 5(6), pages 137-149, June.
    16. Fatemeh Binesh & Amanda Belarmino & Carola Raab, 2021. "A meta-analysis of hotel revenue management," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(5), pages 546-558, October.
    17. Myoungjin Oh & Jungwoo Shin & Pil‐Ju Park & Sunmee Kim, 2020. "Does eco‐innovation drive sales and technology investment? Focusing on eco‐label in Korea," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3174-3186, December.
    18. Mei-Yin Kuan & Szu-Yung Wang & Jiun-Hao Wang, 2021. "Investigating the Association between Farmers’ Organizational Participation and Types of Agricultural Product Certifications: Empirical Evidence from a National Farm Households Survey in Taiwan," Sustainability, MDPI, vol. 13(16), pages 1-18, August.
    19. Tham Mun Hou & Pramila Tamunaidu & Rory Padfield & Nurhamieza Md Huzir, 2024. "“Smile even if your burdens are heavy”: Smallholder challenges and the Sabah sustainable palm oil initiative," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(5), pages 5488-5498, October.
    20. Aaron Tham & David Fleischman & Peter Jenner, 2018. "Spilling the social capital beans: a comparative case study of coffee service enterprises within Asia-Pacific," Asia Pacific Business Review, Taylor & Francis Journals, vol. 24(2), pages 150-173, March.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:10552. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.