As part of Sabre’s ongoing commitment to sustainability, the company recently partnered with Professor Howard Chong at the Center for Hospitality Research at the Cornell School of Hotel Administration to understand the true impact environmental initiatives have on hotel bookings and operations. The joint study looks at the hotels in Sabre’s Eco-Certified Hotel Program, a one-of-a-kind program that includes more than 9,000 hotels that have met a rigorous third-party eco-certification using standards recognized by or aligned with the
Conventional wisdom in the industry is mixed. Anecdotally, advocates cite increases in hotels’ average daily rates (ADR), sometimes by more than 10 percent after going green. Doubters caution that going green can have a negative effect, citing green practices can be equated with sacrifice and can diminish brand perceptions.
This joint research is the first to use hotel booking data. The study’s analysis of Sabre Eco-Certified Hotel booking data concludes that “going green” actually has a neutral effect on the average consumers’ choices, and that’s good news for hotels considering green initiatives. Key total findings include:
- Adopting green practices do not detract from a hotel’s brand promise
- Consumers do not automatically equate “green” with “sacrifice”
- Hotels can derive real cost savings by moving toward sustainability
“Sabre is pleased to partner with Dr. Chong and Cornell to answer a key question hotels have today about whether advertising an eco-certified hotel amenity will increase or decrease bookings,” said Shelly Terry, vice president, Supplier Merchandising, Sabre. “Sabre’s Eco-Certified Hotel Program helps hotels tell their brand story and differentiate themselves for travelers who value these kinds of programs. That includes managed corporate travel programs that use this information to meet their company’s own sustainability initiatives.”
For eco-enthusiasts, the silver lining is that going green does not have negative connotations for hotels. Skeptics assert that going green can damage or modify a hotel’s brand promise in the luxury sector, but this study shows that is not necessarily the case. This suggests hotels have appropriately adopted sustainability practices while maintaining customer satisfaction.
These findings also support current hotel practices, where sustainability measures are primarily targeted to operational savings. Hotels have widely adopted appropriate conservation measures, such as opt-in towel and linen reuse, as well as equipment and capital upgrades. While the majority of sustainability projects to date target cost-savings and operational efficiencies more than customer-facing enhancements, the savings are real benefits for the hotel industry.
The study also set out to determine if, in fact, going green leads to higher rates or occupancy. This study found that premise is probably inaccurate. Studies that simply compare green hotels to non-green hotels can be misleading since green hotels tend to be located in higher market segments and have higher ADR because of their location. These simple comparisons that find green hotels outperforming their non-green counterparts may in fact be comparing apples to oranges (e.g. upscale green hotels to economy non-green hotels). This Cornell study uses a difference-in-differences (DID) statistical framework that accounts for these types of variance and finds that rates and booking frequency are not statistically higher or lower after eco-certification.
Though this study finds zero overall effect on average, several important caveats are noted. This data is based on Sabre’s global distribution system (GDS) data and does not reflect all sales channels or customers. While this study looks at the overall impact, individual hotels have very different experiences with going green. Individual geographies may make a difference as well, for example the effect in California may be different than in Brazil. Furthermore, while individual consumers may make choices toward sustainable hotel offerings, the number of eco-certified hotel properties, as well as the number of eco-conscious consumers is not significant enough to demonstrate any move in market share.
One notable exception is group sales and green meetings, which have been especially important for hotels and where sustainability provides a competitive edge in the venue selection process. Finally, green programs are relatively new, and the impact of sustainability may increase as customer experience with sustainability grows, and as the inventory of eco-certified hotels grows. In summary, this study shows that the market as a whole hasn’t moved, but individual experiences may vary.
The study analyzes a vast data set of more than 9 million unique bookings from Sabre Eco-Certified hotels over an 18-month period. Since the hotels received certification at different times, the study is able to look at individual property bookings before and after eco-certification and compare those to a control group of hotels within the same zip code and with the same star rating, but that are not eco-certified.
Sabre’s Eco-Certified Hotel Program is another example of our commitment to global sustainability initiatives and the interests of both travel suppliers and buyers alike. Hotel guests, and the agencies who serve them, are able to make sustainable choices by shopping and booking hotels with the Eco-Certified designation. Hoteliers are able to differentiate their brand and highlight properties that offer eco-friendly features – all seamlessly integrated into the travel shopping and buying process.
Sabre’s efforts, including the Eco-Certified Hotel Program, have visibly promoted sustainability throughout its company, with customers and travelers around the world. Sabre is the only GDS today to offer an Eco-Certified Hotel Program, including the ability to search for hotels that have environmentally sustainable offerings. Travelocity is the only online travel agency to offer this as a searchable amenity.