Using conjoint analysis to determine customer willingness to pay for environmental initiatives in hotels in Helsinki
Valkama, Aino (2014)
Valkama, Aino
HAAGA-HELIA ammattikorkeakoulu
2014
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2014090213701
https://urn.fi/URN:NBN:fi:amk-2014090213701
Tiivistelmä
Environmental initiatives have growing demand from many stakeholders in the hotel industry. Customers are constantly looking for more information about environmental activities when looking for hotels. The aim of this thesis is to find out whether customers are willing to pay a price premium to stay at environmentally friendly hotels. The scope of this thesis is set at the environmental part of sustainability.
This thesis is research based with a literature review and an empirical part. The literature review is aimed at finding out the most important environmental initiatives in the hotel industry and the value they create, which is tested in the empirical part in the setting of Helsinki. The empirical part is based on the theoretical framework created by the author.
The research method used in this thesis is conjoint analysis. Choice-based conjoint analysis gives respondents randomly matched sets of products or services out of which they choose their favourite, creating a set of utilities and market shares from which it is possible to calculate willingness to pay and revenue generated. Conjoint analysis works in the form of an online survey, to which this thesis got 217 responses.
The responses show that on average the respondents were willing to pay an 11 € price premium. There were differences between different respondent groups in terms of willingness to pay such, as age and nationality. The thesis also looked at how the environmental responsibility of the respondents themselves affects results, as well as what the respondents see that the responsibility of the hotel is.
Based on average importances to the respondents, the willingness to pay figures, and the literature review, it would be recommended for hotels to take on all three environmental initiatives studied in the thesis, as even after they lose competitive advantage by becoming more popular in time, they are still beneficial in cost keeping and branding. The thesis was written between February and August 2014.
This thesis is research based with a literature review and an empirical part. The literature review is aimed at finding out the most important environmental initiatives in the hotel industry and the value they create, which is tested in the empirical part in the setting of Helsinki. The empirical part is based on the theoretical framework created by the author.
The research method used in this thesis is conjoint analysis. Choice-based conjoint analysis gives respondents randomly matched sets of products or services out of which they choose their favourite, creating a set of utilities and market shares from which it is possible to calculate willingness to pay and revenue generated. Conjoint analysis works in the form of an online survey, to which this thesis got 217 responses.
The responses show that on average the respondents were willing to pay an 11 € price premium. There were differences between different respondent groups in terms of willingness to pay such, as age and nationality. The thesis also looked at how the environmental responsibility of the respondents themselves affects results, as well as what the respondents see that the responsibility of the hotel is.
Based on average importances to the respondents, the willingness to pay figures, and the literature review, it would be recommended for hotels to take on all three environmental initiatives studied in the thesis, as even after they lose competitive advantage by becoming more popular in time, they are still beneficial in cost keeping and branding. The thesis was written between February and August 2014.