DO HOTELS LEAN ON ENVIRONMENTAL FACTORS TO COMPETE?
The case for the Balearic Islands
ABSTRACT
This paper presents the analysis of how the hotels use the competitive advantages that can be
derived from the environmental issues to compete. The hotels were classified into strategic
groups basing on three dimensions relevant to the benefits that the economic theory and
empirical studies attribute to the environment. Differently from the previous works the
dimensions include both environmental resources and environmentally related actions of the
hotels to take into account both active and passive aspect of the hotels environmental strategy.
The results indicate that in general the hotels are not proactive in dealing with the environmental
factors and not use all the opportunities to create the environmental competitive advantage. The
comparison of the performance levels between the groups shows that some strategies allow for
higher performance, namely, location in the underdeveloped areas, environmentally proactive
behaviour and internal resources allow the hotels to reach higher capacity to obtain extra
revenues, stronger bargaining position and smaller dependence on the tour operators and higher
repeat visit rates. The analysis is done for the accommodation facilities of the Balearic Islands, a
mass tourism destination characterized by a highly competitive environment and declining
environmental quality.
1. INTRODUCTION
Highly competitive environment attributable to sun and beach mass tourism destinations makes
the hotels to be strategically active and search and exploit all possible opportunities to develop a
competitive advantage. According to the resource-based theory which recently received a major
attention from the researchers and somewhat pushed aside the environmental paradigm of firm
competitiveness, such competitive advantage can be generated by some specific resources and
capabilities which a firm may possess. One of such resources satisfying the characteristics to
become a source of competitive advantage is the environmental resources. Indeed, most of them
are heterogeneously distributed, immobile, valuable, rare, non-substitutable and hardly imitable
and, hence, hold the potential to generate a competitive advantage according to the resourcebased paradigm of competitiveness (Barney 1986, 1991, 2001, Grant 1991, Peteraf 1993).
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The extant literature on the relationship between environment and competitiveness in tourism
sector attribute a number of benefits that can be derived from the focus on the environmental
issues. On one hand, environmental resources are the key motivators for the visitation to a
tourism destination, which is especially the case for nature-based destinations (Huybers and
Bennett 2003). Such environmental resources as sea, beaches, natural parks are not only the
reasons why the visitors choose one destination or another (Crouch and Ritchie 1999), more than
that these attractors provide a source of product differentiating market power and allow for the
price mark-ups for the firms (Taylor and Smith, 2000, Espinet et al. 2003, Aguiló et al. 2003,
Ruta and Pedroso 2005, Thrane 2005, Hamilton 2006, Rigall-I-Torrent and Fluvià 2007). On the
other hand, the growing environmental concerns of tourists make the firms to develop
environmental management. The implementation of the environmental protection activities
embedded in firms operations not only decrease the impact on the strategically important
environmental resources but, if properly planned and implemented, may eventually result in cost
saving and differentiation, first mover advantage and access to new markets, enhance employees
motivation and satisfaction, and improve the access and conditions for the financial aid (Porter
and van der Linde 1995). In tourism literature there is evidence that proactive environmental
management in tourism entities lead to increased tourism demand (Huybers and Bennett 2003),
cost saving (Gonzalez and Leon 2001), product differentiation (Manaktola and Jauhari 2007),
higher occupancy rates (Claver-Cortés et al. 2007) and better financial indicators (Álvares Gil et
al. 2001, Carmona-Morena et al. 2004).
Thus, as the importance of the environment for the competitiveness in the tourism sector has
been highlighted, the main aim of this study is to carry out an analysis of how hotels develop and
exploit the competitive advantages that can be derived from the environmental issues. One of the
approaches to this type of questions is strategic group analysis. This tool helps to characterize the
structure of the industry in terms of threats and opportunities and enable to understand the
competitive strategies and advantages developed by firms and their competitors (Cool and
Dierickx 1993, Barney 1997).
In the tourism sector the strategic group analysis used to describe how the hotels compete is not
new. These studies classified the hotels according to such characteristics as number of rooms and
sales strategies (Edgar et al. 1994), information technologies and attitude towards their strategic
importance (Camisón 2000), or whether chain affiliated assume the name of their chain or not
(Ingram 1996). However, only few studies use the environmental variables as a dimension for
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the classification of hotels (García Rodríguez et al. 2002, Claver-Cortés et al. 2006, 2007). The
number of works classifying the hotels only by the environmental variables is even smaller and
the dimensions used in these studies reflect different aspects of the environmental management,
which only allow classifying the hotels in a continuum from the most advanced in environmental
management to the least committed (Aragón-Correa 1998, Álvares Gil et al. 2001, CarmonaMorena et al. 2004).
Differently to the previous works we propose to classify hotels taking into account not only the
environmental management, but also the environmental resources attributed to the hotels. These
considerations lead us to identify three dimensional structure of the environmental factor
(strategy) of a hotel depicted in Figure 1. The environmental strategy of a hotel may have a
passive and an active component. That is, a hotel may passively rely on unique environmental
resources and attractors that it has due to the strategic decisions taken, when choosing a location
for the hotel. At the same time a hotel may take an active approach to the environmental issues
and apply environmental management to obtain the benefits outlined above. The active
component of the strategy also includes the dimension of the environmental marketing to reflect
how active is the hotel in promoting its environmentally friendly behaviour to the target group of
the environmentally concerned tourists, which is crucial to allow the company to differentiate on
the environmental factors and bid for a premium prices. The methodological contribution of the
work lies in the fact that it proposes a new classification of hotels according to their attitude to
the competitive advantages that can be derived from the environmental issues. Additionally, we
check whether some strategies allow the hotels to achieve a higher performance levels than the
others.
The study is structured as follows. In the Chapter 2 we explain the choice of the environmentally
related variables of the hotels, variables of the hotels performance and the methodology applied.
Chapter 3 exposes the results of the classification of the hotels according to the environmental
strategies and the analysis of the differences in performance between and within the groups. The
discussion of the results is presented in Chapter 4 and Chapter 5 concludes.
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2. EMPIRICAL ANALYSIS
2.1 SAMPLE
The data source for this work is a representative sample of 101 accommodation facilities situated
in the Balearic Islands. Accommodation facilities are represented by all categories of hotels. The
database provides the information on the characteristics of the hotels and the area where the hotel
is situated and measures of hotel performance. The data analysis was realized using STATA
software version 9.0.
2.2 MEASUREMENT
Hotel’s environmental variables
Basing on the dimensions outlined in Figure 1 the following variables are used for the hotel
classification.
1) Environmental resources for shared use with other hotels’ clients (outside the hotel)
In this category we include the environmental resources and tourist attractors which can be
attributed to the hotel and can generate a competitive advantage for it. The variables include
whether the hotel is situated in the first line, percentage of the rooms with picturesque views,
distance to the nearest beach, presence of natural and/or non-natural attractions nearby, level of
congestion and edification and environmental quality of the area where the hotel is situated.
2) Environmental resources for the exclusive use of hotel’s clients (inside the hotel)
There are several hotel attributes that can be seen as environmental resources within hotel’s
territory. For example, swimming pools and green zones can be seen as environmental resources
if interpreted broadly as all the facilities making an environment a healthy and comfortable place
to stay in. Apparently, these two resources can serve as a substitute for the sea and parks, but can
also have their own value for the hotel visitors due to two functions. Both of them improve the
visual amenities of the hotel, and additionally swimming pool may have its own value due to the
fresh water, safety for kids and controllable temperature.
3) Environmental management
We use two types of environmental management held by the hotels. One reflects the
commitment of the hotels to minimize its environmental impact and is measured by the number
of the environmental certificates obtained by the hotel. There are three environmental certificates
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considered: EMAS (Eco-Management and Audit Schemes), Q Verde (Environmental certificate
for tourism entities in Spain) and ISO 14000 Environmental management standards. Although all
three certificates are similar in terms of the requirements, we use the total number of certificates
to reflect the hotels commitment to comply with both international standards required by ISO
14000 as well as with more specific ones set by the European Union in EMAS and by Spain in Q
Verde. Second type of the environmental management considered in the study reflects the hotel’s
commitment to manage the quality of the area where it is situated. The hoteliers were asked
whether in the last three years they made any expenditure to improve the quality of the area,
including the environmental quality.
4) Environmental marketing
To measure the proactiveness of the hotels in attracting the environmentally concerned visitors
we asked the hotels to grade the importance of the environmental marketing tools in the
promotion strategy from “not important” to “very important” on a 1 to 7 scale.
Table 1 provides the description of the variables selected for the analysis.
Organizational performance
It is widely assumed in the literature that the organizational performance is a complex construct
which is based not only on financial results but also on operational indicators (Venkatraman and
Ramanujam 1986). Our construct of hotel organizational performance is derived from the four
dimensional scale proposed by Espino-Rodriquez et al. (2005). The authors specify one financial
dimension (Financial performance) and three non-financial (Organizational quality, Employee
welfare and Hotel activity index). In attempt to improve this measurement the new dimension
“Relationship with tour operators” was added.
1) Financial performance. Financial performance is represented by the measures of gross
operational profit and performance in crisis years. The first measure is widely used indicator of
hotel performance and has also been used in the empirical studies on the relationship between
environmental management and economic performance.
The performance in the crisis years has not been used before. We include this variable to reflect
hotels capacity to attract tourists and out perform the rivals during the decreases in the tourism
demand.
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2) Hotel activity. This dimension contains two measures. First, average occupancy rate during
the year, is widely used as performance indicator among hotels.
The capacity to generate extra revenues refers to all the revenues apart from the room rate, this
was used in works (ref).
3) Organizational quality. The organizational quality dimension is represented by the client’s
satisfaction and the repeat visits. While the client satisfaction is a quite common measure of
hotels organizational quality, the repeat visits has not been used before. We include this variable
to reflect the uniqueness of experience obtained by the tourist in a client. While a tourist may be
satisfied with the service received in the hotel, the fact that she repeats the visit next year may
indicate the uniqueness of the experience she had.
4) Employees welfare dimension is represented by the manager’s perception of the degree of
employees satisfaction with the job.
5) Relationship with tour operators. Some authors propose to use the existing control over prices
as the measures of hotel competitiveness level (Yagüe Guillén et al. 1999, Iglesias Arguelles
1999, Parra López et al. 2004). According to this approach the hotel is more competitive, if it has
the control over pricing when bargaining with the tour operator. To measure this variable we
propose to use the following available measures which may give insight on the degree of hotel’s
control over pricing. Prices paid by tour operators in May and in August are the actual prices
paid by the biggest tour operator in low and high seasons. Controlling for the hotel category the
higher prices may indicate stronger bargaining position of the hotel (Taylor and Smith 2000). We
also calculate the percentage difference between these two prices to get some insight into the
seasonal fluctuations suffered by the hotel. We assume that the big difference is a sign of poor
performance. To get the better insight into the degree of the hotel’s independence we include a
measure reflecting the importance of the tour operators as a channel of distribution. Occupancy
due to tour operators shows the actual share of hotel’s rooms realized through this distribution
channel. Apart from the fact that the tour operators represent a middleman which reallocates
some of the hotel’s profit, this industry is now experiencing decreasing profit margins, making
hotels to lower their price as well (Buhalis 1999, Vich-i-Martorell 2004). Although this channel
is a good way to guarantee the occupancy of a hotel, the high dependence on this channel is a
sign of possible decreasing performance in the long run.
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The way the performance indicators were measured and the reference to the works where they
have been used before are listed in Table 2.
[ Table 2 here ]
Control variables. It is obvious that there are many idiosyncratic characteristics of the hotels that
affect their performance. As explained before we introduce the hotel category which we expect
would explain a significant part of the variation in the following performance variable. First, we
control for the category when comparing the tour operators prices, as the category explains the
important part of the variation in the price variables. Secondly, the category of the hotel is taken
into account when comparing the hotel capacity to generate the extra revenues, as the tourists in
high category hotels seek luxury and comfort which may imply a higher level of resource
consumption and thus higher extra revenues per room.
2.3 DATA ANALYSIS
Once the environmental variables characteristics potentially capable to create competitive
advantage are identified we use the factor analysis to reveal the competitive strategies of the use
of the environment. The factor analysis is widely applied in management studies, where the
derived factors or dimensions are interpreted as “competitive strategies” used by the firms
(Carmona-Moreno 2004, Claver-Cortéz 2006, 2007. Factor analysis enables to create numerical
scores for each factor (each environmental strategy) in each hotel, which is used then for the
classification of the hotels into the groups according to the degree of implementation of each
environmental strategy. The hotels are grouped by the means of the 2-stage cluster analysis.
To identify what strategy allows the hotels to achieve higher performance levels we analyse the
differences in the performance measures between the groups of the hotels with similar sets of
environmental strategies. The statistical significance of the differences is tested by ANOVA,
ANCOVA (to control for the category of the hotel, when needed), Kruskal-Wallis and Pearson’s
chi-square tests depending on the type of the analyzed variable. Finally, to explain the predictive
validity of the groups we use the confidence interval test proposed by Lawless et al. (1989).
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3. RESULTS
3.1 ENVIRONMENTAL STRATEGIES OF HOTELS
This section describes the strategies implemented by the hotels to create environmental
competitive advantage. The factor analysis was applied to 12 environmental variables defined in
2.2. and Table 1, and the results reveal the existence of six principal factors, or six environmental
strategies, explaining 77% of the variation among them. The cut-off criteria for addition of
factors were explained variance, eigenvalues higher than 1 and the communalities higher than
0.5. The results obtained are shown in Table 3.
First factor receives the name of “Underdeveloped area strategy” since it underlines the low
congestion, low edification of the area and high per guest room ratio of green zones in the hotel
grounds.
Second factor corresponds to the “Sun and beach location strategy” because it has high loads on
the variables measuring the distance to the nearest beach and whether the hotel is situated in the
first line or not. These two variables have expected opposite signs, showing that they are
negatively related.
Third factor receives the name of “Green strategy” since it combines high factor scores in the
current environmental quality of the area, voluntary expenditure of the hotel to improve the
environmental and other characteristics of the area, and the use of pro-environmental actions in
hotel’s promotion strategy. Thus, this strategy to create environmental competitive advantage
consists in active maintenance of the unspoilt environment and active promotion of this
advantage to the environmentally concerned guests.
Fourth factor can be called “Internal resources strategy”. It loads to the size of swimming pools
and number of environmental certificates. Both variables have factor loads of the same sign
which may be due to the fact that bigger swimming pools imply significant water costs and make
the hotels implement water saving technologies which is an important requirement of the
environmental quality certificates.
Fifth factor may be called “Picturesque landscape strategy”. This factor has significant score
only on the variable of the percentage of the rooms with views.
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Sixth factor is “Natural and non-natural resources strategy”, as it loads on the variable whether
the hotel has any natural or non-natural resource nearby that makes it more attractive for the
tourists.
[ Table 3 here ]
3.2 GROUPS OF HOTELS WITH SIMILAR ENVIRONMENTAL STRATEGY
As the competitive strategies to create environmental competitive advantage (factors) are
identified the hotels can now be classified into groups by the level of implementation of these
strategies. To achieve this aim, two-stage cluster analysis (Pung G. and Steward D. 1983) was
performed. First, the hierarchical cluster analysis (Ward method) was applied to determine
candidate number of clusters and the initial cluster centroids for the second stage of cluster
analysis, K-means clustering. To select the number of clusters dendrogram, Calinski & Harabasz
pseudo-F index and the Duda & Hart Je(2)/Je(1) index stopping rules we were implemented.
They showed that the optimum number of groups is six. The cluster solution was validated by
the discriminant analysis, which showed that all the variables differentiate significantly between
the groups. The average values characterizing the strategic groups are provided in Table 4.
Cluster 1. Sun and beach hotels
This group is represented by the hotels with traditional sun and beach orientation (21 hotels). The
hotels in this group rank above average in “Sun and beach location strategy” and “Natural and
non-natural resources strategy”. The environmental competitive advantage of these hotels is
based on the first line location (all of them in the group), a beach nearby (average distance is 50
meters), and on the significant share of the rooms with picturesque views. These hotels do not
intend to differentiate from the rivals by developing environmental resources within hotel
territory, the size of swimming pool is close to average. They also have the lowest score in using
“Green strategy” to create the environmental competitive advantage. Few of them did any
expenditure to improve the area and they do not seem to be focused on green tourist as the
importance they give to the pro-environmental actions in the promotion strategy is low. The
tourist perception of the environmental quality of the area is the lowest among the groups.
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Cluster 2. Sun and beach “green” hotels
The hotels in this group have also a strong competitive advantage for sun and beach type of
vacation (high rank in Sun and beach location strategy). They are mostly situated in the first line
and the distance to the beach is small (128 meters in average). Differently from the Group 1 (Sun
and beach hotels) the hotels in this group make expenditures to maintain or improve the
environmental quality of the area and consider very important the mentioning of the proenvironmental actions in their promotion strategy. The environmental quality of the area where
these hotels are situated are usually higher that the average.
Cluster 3. Sun and beach “green” hotels with internal resources
This is the third group of hotels with high score in Sun and Beach factor (63% of the hotels are
situated in the first line and have a beach in 145 meters in average), but differently from the two
previous groups it is characterized by both active actions to create the “green” image and also by
the significant internal environmental resources. The swimming pools per guest room in these
hotels are approximately 2.4 times bigger than the average. In this case it can be seen that the
swimming pool is not considered by the hoteliers as a substitute of the sea, as the distance to the
sea is small, but rather as a resource may have its own value for the tourists as it was explained
in 2.2.
Cluster 4. Hotels in underdeveloped areas
It appears that the hotels in this group may see their competitive advantage in being situated in
undeveloped areas. The main characteristic of this group of 4 hotels is that they have the biggest
superficies of green zones per guest room and the areas, where they are situated, are considered
by the tourists as the least congested and the least urbanized comparing to other areas. These
hotels have the biggest share of the rooms with nice views (approximately 95% in average).
Another distinctive characteristic of these hotels is that they are situated very far from the
beaches (1875 meters in average). Interestingly, in spite of the fact that the distance to the beach
from these hotels is significantly biggest than in the rest of the groups (1875 meters in average)
the size of swimming pools per guest room is quite close to the average. This gives another
reason to suggest that the swimming pool is not considered as a substitute of the sea.
Cluster 5. Hotels with outside views disadvantage
The most prominent feature of this group of hotels is that they have the lowest score in the share
of the rooms with views (21% in average). As for other strategies the hotels in this group have
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the scores very close to the average value. Thus, differently from previous four groups this group
seems to have no competitive advantage, but has a characteristic that makes it clearly inferior
comparing to other groups.
Cluster 6. Hotels in congested and urbanized areas
This group includes the hotels situated in the most congested and urbanized areas among the
groups. The average score given to corresponding indicators is 2,38 which means the tourists
consider these areas as quite congested and urbanized. The ration of green zones per guest room
is the smallest among the groups. As for the other environmental strategies it can be seen that,
like in the previous group, the average scores achieved by the hotels in this group are close to the
average values.
[ Table 4 here ]
3.3 PERFORMANCE DIFFERENCES BETWEEN GROUPS
This part of the analysis was performed to compare the differences between the groups
corresponding to the variables measuring the hotel performance. Table 4 reports the mean for
each performance variable and significance of the corresponding tests (ANOVA, ANCOVA,
Kruskal-Wallis, Pearson chi-square). To explain the predictive validity of the groups we use the
confidence interval test proposed by Lawless et al. (1989).
The analysis revealed that there are significant differences among the groups in 5 indicators,
namely: hotels capacity to generate extra revenues, share of repeat visits, price paid by the major
tour operator in August, share of hotel rooms sold through the tour operators, difference between
price paid by hotels major tour operator in August and in May.
The hotels in the cluster of underdeveloped areas show the highest results in all 5 measures,
where the significant differences were found. It can be seen that for all five variables the
difference even with the second best performers are very big. The hotels in this cluster report the
self-valuation of their capacity to generate extra revenues higher that the sector average, whereas
other hotels mostly report it being slightly higher or equal to the sector’s average. The repeating
visits in these hotels reach in average 38% which is almost 1.5 times higher that the second best
result obtained by the hotels in the cluster of green sun and beach hotels with internal resources.
The prices paid by the tour operators in May to the hotels in this group are almost twice higher
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that those paid to the second best performer (Sun and Beach green hotels) in this indicator, in
spite of the fact that the hotels in both clusters are almost of the same category (3,25 and 3,35
stars in average respectively). These hotels have the lowest difference between prices paid in
May and in August (38%) by the tour operators, whereas the second best result is 1.5 times
bigger.
Second best performers are two clusters which received the name of strategically active due to
the environmental behaviour. Thus, the hotels in the cluster of Sun and Beach with Green
behaviour are obtaining second highest prices from their main tour operators in May, and in
average have the second lowest share of sales through tour operators showing high
diversification of its distribution channels. On the other hand, Sun and Beach cluster with
Green behaviour and internal resources is second best performer in repeat visits and in
receiving extra revenues.
Interestingly, the seasonality problem measured as difference between prices paid by the tour
operators in May and in August is less important in the cluster of hotels in underdeveloped areas
and in environmentally proactive sun and beach hotels. It may be due to the fact that in the low
season the share of environmentally concerned tourists increases, and gives to the hotels the
bargaining power in negotiations with the tour operators.
The performance of the Sun and Beach cluster is comparable to the cluster of hotels with
disadvantage of the small share of nice views. It is interesting to note that while not active
behaviour still allow the hotels in the undeveloped areas to be best performers, only Sun and
beach hotels with internal resources or those developing green image reach comparatively high
performance levels. If in the beginning the green behavior created a competitive advantage for
the hotels, now it is a necessary attribute to ensure hotels survival under conditions of
competitive parity in the industry, when the green image becomes an indispensable attribute
(García Rodríguez and Armas Cruz 2006).
The worst results are demonstrated by the cluster of hotels in developed and congested areas.
The most important differences are in prices paid by tour operators. We controlled for the
category of prices to make sure that the variation due to this characteristic is accounted for.
However the difference is still significant and prices in congested areas are 3 times lower than in
undeveloped. The difference between August and May is the biggest among the groups, which
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can be due the fact that although in August the hotels in congested areas might have a strong
bargaining position due to big demand, in low season they seem to lose the negotiation power,
which may be due to decrease in the total tourism demand and to the fact that the tourists coming
in low seasons may be more environmentally concerned.
Here it is interesting to note that both best performer and worst performer are not sun and beach
hotels (i.e. at least this cannot be their competitive advantage, as the scores for the Sun and
Beach factor are low), but the characteristics of the areas where they are situated such as
congestion and edification are associated with the highest and with the lowest performance
among all groups.
[Figure 2 here]
Although statistically significant differences in performance were found between the groups, the
confidence intervals test showed in Table 6 suggest that there is also difference between the
hotels within the strategic groups. As should be expected the predictive validity of the groups is
lowered by the omission of non-environmental determinants of hotel performance.
4. DISCUSSION
The results of the classification of the hotels by the environmental variables and analysis of
performance differences are put together in the Figure 2.
The six clusters are placed according to the active and passive components of their strategy
depicted in Figure 1, that is, by the environmental resources and their quality attributed to the
hotels and by the environmental management and marketing actions undertaken by them. We can
see that there are three types of behaviour in dealing with the environmental factor.
Type 1: No resources, No green behaviour
This group is comprised of two clusters of hotels with different disadvantages. The hotels in one
group are situated in congested areas and the hotels in another group have smaller that average
share of rooms with picturesque views. In other strategies, including green actions, these hotels
have the scores close to the average.
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Type 2: Have environmental resources, No green behaviour
This group is comprised by two clusters. One of then is Sun and Beach hotels and another one
hotels in underdeveloped areas. These hotels have the competitive advantage, do not do any
additional effort do differentiate from other S&B hotels, for example by being green.
Type 3: Have environmental resources, Green behaviour
These are two clusters of sun and beach hotels. Differently from Sun and Beach group they see
environment as a strategic resource (highest scores for the importance of pro-environmental
actions in promotional policy).
It can be seen that the competition on the environmental factor is quite small. Only two clusters
of hotels have the active component in their environmental strategy (Type 3). They are both
clusters of sun and beach hotels and it is probably that it is the active component that makes them
to be second best performers and to over-perform other sun and beach hotels, which do not give
importance to environmental marketing and management. The empty quadrant of the matrix may
be a so called low-hanging fruit of not used opportunities for the hotels with no environmental
resource if they draw their attention to the benefits that can be derived from the focus on
environmental management and marketing.
5. CONCLUSIONS
In this paper we present an inductive study of how the hotels deal with the competitive
advantages that can be derived from the environmental issues. Using the strategic group
analysis we classified the hotels basing three dimensions: environmental resources,
environmental management and environmental marketing.
The classification revealed six groups of hotels. There are two clusters three clusters of
hotels situated in the areas very convenient for sun and beach vacations. The difference
between them is that two of these groups also follow the strategy of active environmental
management and marketing, and one of them adds to the “green” orientation the strategy of
development of swimming facilities. There is also one cluster of hotels situated in areas
with low grade of congestion and edification. Finally, there were revealed two groups of
hotels which do not actively address either of the environmental values of tourists and even
have significant disadvantages, such as very small share of rooms with nice views and
location in highly congested and urbanized areas.
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Thus, it can be seen that in general the hotels are not proactive in dealing with the
environmental factors. Some of the hotels have competitive disadvantage in some important
environmental resources, but do not compensate it by the benefits that may be derived from
environmental management and environmental marketing, others may have environmental
resource but don’t do any efforts to differentiate themselves from the competitors, and only
few hotels that posses some environmental resources additionally incur into environmental
marketing and management to take the most of the environmental values of the tourists.
The groups revealed some predictive validity. For example, the hotels in underdeveloped
areas show the highest performance, the sun and beach hotels which differentiate from other
sun and beach by green behaviour and internal resources are second best performers, and
the hotels in congested developed areas report the lowest performance levels. However, it
should be remembered that there are other non-environmental factors that explain the
variation in the performance variables.
Implications for the hotel management
It was demonstrated that not sun and beach hotels may reach high performance levels, if they are
situated in the areas free of congestion and edification, meanwhile the non-sun and beach hotels
situated in congested areas show the worst results among groups. This fact indicates that the high
quality of the areas can become a source of competitive advantage for the hotels. However,
congestion and edification of the area are usually out of control of the management, so this
advantage is not sustainable, and if no other advantage is developed the decrease of these
characteristics may significantly worsen the performance.
The location of the hotel near to the sea and the beaches is an important and unique resource and
represent an advantage comparing to the hotels situated in inferior locations. However, when
competing with other sun and beach hotels the green image is becoming an attribute of
paramount importance. Although nowadays the green behaviour is still not common in the hotel
industry and can generate a competitive advantage in the form of differentiation, in the nearest
future the low environmental concern may generate image problems for those firms that do not
respect the environment and may question the very survival of such firms.
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19
Figure 1. Dimensions of the environmental strategy of hotels
Environmental strategy of a hotel
Environmental actions
Resources and
attractors
Passive component
Environmental
Management
Environmental
Marketing
Active component
Figure 2. Environmental strategy – Performance matrix
P
a
s
s
i
v
e
c
o
m
p
o
n
e
n
t
Have
environment
al resources
and/or tourist
attractors
Don’t have
environmental
resources
and/or tourist
attractors
Type 2
Underdeveloped
areas
S&B “green”
hotels
S&B hotels
S&B “green” with
internal resources
Type 3
Congested and
urbanized
areas
Type 1
Outside views
disadvantage
Not environmentally friendly
behavior
Environmentally friendly
behavior
Active component of environmental strategy
Legend:
Best
performers
Second best
performers
Average
performance
Worst
performance
20
Table 1. Environmental variables of the hotels
Dimension
Variable
Description
1. Environmental
resources
First line location
a) Shared use with
other hotels’ clients
b) Hotel’s clients
exclusive use
Environmental
management
Environmental
marketing
A hotel is considered to be in the first line, if there is no
buildings between it and the sea, and if it is situated not further
than 200 m from the sea
Distance to the beach
The distance to the beach most visited by the hotel clients
Natural or non-natural resource
nearby
A natural or non-natural resource making the hotel more
attractive to the client (0 if no such a resource, 1 if there is a
natural or non-natural resource, 2 if both)
Percentage of rooms with “views”
The rooms facing the sea, mountains, natural parks or
monuments were considered as rooms with “views”
Congestion
The grade of the congestion of the area where the hotel is
situated measured by 1 (high congestion) to 7 (low congestion)
scale
Edification
The grade of the edification of the area where the hotel is
situated measured by 1 (high edification) to 7 (low edification)
scale
Environmental quality
The environmental quality of the area where the hotel is situated
measured by 1 (bad) to 7 (excellent) scale
Square meters of swimming pools
per guest room
Total extension of the internal and external swimming pools
divided by the number of guest rooms
Square meters of green zones per
guest room
Total extension of the green zones on the hotel’s territory
divided by the number of guest rooms
Number of environmental
certificates
EMAS (Eco-Management and Audit Schemes), Q Verde,
or ISO 14000 Environmental management standards
Voluntary expenditures to
improve the quality of the area
where the hotel is situated
The binary variable taking the value of 1 if during the last 3
years the hotel realized any voluntary expenditure to improve
the area (cleaning and improvement of the beach, improvement
of the access to the beach, etc.)
Importance of the proenvironmental actions in the
promotion strategy
The importance was measured by the scale from 1 (not
important) to 7 (very important)
21
Table 2. Dimensions and variables of hotels organizational performance
Dimensions and Variables
Description
Research studies which have used similar
measurements
Valuation between 1 (much below the
average) and 7 (much higher that the
average) of GOP obtained compared to
known competitors
Miller & Cardinal (1994), Álaverez Gil
(2001), Espino-Rodriguez et al. (2005),
Carmona-Moreno et al. (2004), ClaverCortes et al. (2006, 2007)
Financial performance
GOP valuation compared to
the sector average
Valuation of performance in
the crisis years compared to
the sector average
Valuation between 1 (much below the
average) and 7 (much higher that the
average) of performance in crisis years
compared to known competitors
Hotel activity
Valuation of capacity to
generate extra revenues
compared to the sector
average
Valuation between 1 (much below the
average) and 7 (much higher that the
average) of capacity to generate extra
revenues compared to known competitors
Espino-Rodriguez et al. (2005),
Average occupancy rate in 2005
(occupied rooms / rooms available)
Damonte et al. (1997), Álaverez Gil
(2001), Espino-Rodriguez et al. (2005),
Carmona-Moreno et al. (2004), ClaverCortes et al. (2006, 2007)
Occupancy rate
Relationship with tour
operators
Price paid by the major tour
operator in May
Average price paid by the major tour
operator for a B&B accommodation in
May 2005
Price paid by the major tour
operator in August
Average price paid by the major tour
operator for a B&B accommodation in
August 2005
Difference between price paid
by the major tour operator in
August and in May
Percentage difference between the price
paid by the main tour operator for the
room in August and in May, taking the
May price as a basis
Share of hotels rooms sold via tour
operators
Occupancy of hotel due to
tour operators
Organizational quality
Percentage of repeating visits
Clients satisfaction
The percentage of the clients which
repeat their visits in 2005
The grade obtained by the hotel by its
clients on 1-7 scale
Espino-Rodríguez et al. (2005),
Employee welfare
Employees satisfaction
The satisfaction of the employees on 1 to
7 scale
Espino-Rodríguez et al. (2005), Alleyne
(2006)
22
Table 3. Results of the Principal component factor analysisa
Variable
Factor 1
Low
developed
area strategy
First line
Factor 2
Sun and
beach
location
strategy
Factor 3
Green
strategy
Factor 4
Internal
resources
strategy
Factor 5
Picturesque
landscape
strategy
Factor 6
Natural/
Nonnatural
resource
strategy
Comm.*
0,873
0,810
Rooms with views
0,891
Natural / non-natural
resources
0,827
0,954
0,917
Congestion
0,932
0,888
Edification
0,897
0,822
Environmental quality of
the area
0,705
Distance to the beach
Size of swimming
pool(s)
Size of green zone(s)
0,681
-0,855
0,819
0,848
0,751
0,486
0,487
Expenditures to improve
quality of the area
0,766
0,639
Importance of pro-envir.
actions in promotion
0,685
0,715
No. of environmental
certificates
Eigenvalues per factor
% of variance explained
by factor
Accumulated % of
expalined variante
Kayser-Meier-Olkin
Bartlett significance test
0,792
0,697
2,49
1,79
1,55
1,24
1,02
0,96
21
15
13
10
8
8
21
0.541
0.000
36
49
59
67
75
a
Factor scores with absolute values below 0.3 have been removed; *Comm. = communalities
* Congestion and edification variables are measured at 1-7 scale, where 1 means high congestion and edification, and 7 – low.
23
Table 4. Average values per Factora and Variable for each cluster
Factors and Variables
Mean values in the groups
Cluster 1
Cluster 2
Cluster 3
Sun & beach
Sun & beach Sun & beach green hotels
hotels
green hotels with internal
resources
Cluster 4
Cluster 5
Cluster 6
Underdeveloped
areas
Outside
views disadvantage
Congested
and
urbanized
areas
Total
mean
n=21
n=26
n=8
n=4
n=18
n=24
Underdeveloped area strategy
4,23
4,50
3,35
6,14
4,45
2,59
3,96
Internal resources strategy
Green strategy
Sun and Beach location strategy
Picturesque landscape strategy
1,94
2,41
6,33
4,83
1,71
4,71
5,91
5,09
4,36
4,38
5,85
4,99
2,12
2,91
2,48
5,16
1,87
4,26
5,44
2,44
1,63
3,03
5,09
4,15
1,99
3,66
5,58
4,33
Natural and Non-natural
Resource strategy
4,84
3,62
4,20
4,35
4,47
3,91
4,17
First line
Rooms with views
Natural / non-natural resources
Congestion
Edification
Environmental quality of the area
Distance to the beach
Size of swimming pool(s)
Size of green zone(s)
1
82,38
1,29
4,33
4,62
3,24
49,52
1,3
27,34
0,77
81,65
0,85
5,31
5,08
5,04
127,5
1,19
43,88
0,63
73,5
1,13
3,38
4,25
4,5
145
3,3
32,51
0
95,75
1
6,75
6,75
5,75
1875
1,84
126,7
0,61
21,22
1,17
4,72
5
5,17
355,56
1,34
35,38
0,33
57,71
0,96
2,38
2,38
3,54
240,4
1,04
14,9
0,64
65,26
1,05
4,21
4,33
4,32
249,36
1,4
34,42
Expenditures to improve quality
of the area
0,24
0,69
0,63
0,25
0,72
0,17
0,46
Importance of pro-envir. actions
in promotion
No. of environmental certificates
2,29
0,1
4,73
0,08
5,13
1,25
1,75
0
3
0,06
2,88
0
3,39
0,15
Category
3,19
3,35
3,25
3,17
0,81
189
0,58
176
0,25
137
0,94
302
2,75
0,65
3,18
Chain
Number of rooms
3,88
0,88
Year of construction
1970
1969
1969
1977
a
311
1980
166
1971
Factor values have been transformed to 1-7 scale.
24
0,72
208
1972
Table 5. Differences in Performance across Environmental strategic groups
Mean values in the groups
Cluster 1
Variables
Stat.
Cluster 2
Cluster 3
Cluster 4
Cluster 5
Cluster 6
Sun &
beach hotels
Sun &
beach
green
hotels
Sun &
beach
green
hotels
with
internal
resources
Underdev Outside
eloped
views disareas
advantage
Congested
and
urbanized
areas
n=21
n=26
n=8
Sign.
n=4
n=18
n=24
Financial performance
GOP valuation compared to
the sector average
Valuation of performance in
the crisis years compared to
the sector average
Hotel activity
Valuation of capacity to
generate extra revenues
compared to the sector average
Average occupancy rate, %
Relationship with tour
operators
Price paid by the major tour
operator in May
Price paid by the major tour
operator in August
Difference between price paid
by the major tour operator in
August and in May, %
Occupancy rate due to the tour
operators, %
Organizational quality
Satisfaction of clients
Repeat visits, %
Employees welfare
Satisfaction of employees
Category of hotel
0,67a
0,649
4,68
4,92
5,14
5
4,75
4,59
0,69a
0,636
4,21
4,38
4,57
4,5
4,44
4,14
2,76d
0,91a
0,023
0,477
4,84
77,21
4,62
74,08
5
71,5
5,5
72,75
4,06
75,47
3,86
79,21
2,77d
0,023
48,46
69,41
41,14
105,5
52,57
36,2
1,14d
0,347
80,29
95,82
69
113,55
81,86
68,31
1,95a
0,095
77,79
51,73
55,34
38,20
81,50
103,30
2,30a
0,051
67,39
56,39
59,70
38,19
66,41
64,65
1,61a
181,213c
0,166
0,005
5,62
22,95
5,65
22,88
5,75
24,13
5,75
38,25
5,44
22,29
5,17
21,79
0,9a
0,482
5,17
5,32
4,88
5,5
4,88
5,08
3,19
3,35
3,88
3,25
3,17
2,75
ANOVA, b Kruskal-Wallis, c Pearson’s chi-squared, dANCOVA. In bold – Best performance among the groups, in italic – Worst
performance among the groups
a
25
Table 6. Analysis of intragroup performance differences
Percentages of hotels per group with performance outside the 95% interval
Cluster 1
Cluster 2
Cluster 3
Sun & beach
Sun & beach Sun & beach green hotels
hotels
green hotels with internal
resources
Price paid by the major tour
operator in May
Difference between price paid by
the major tour operator in
August and in May, %
Cluster 4
Cluster 5
Cluster 6
Underdeveloped
areas
Outside
views disadvantage
Congested
and
urbanized
areas
48
81
75
100
56
79
62
58
75
-
50
71
Repeat visits, %
86
92
100
75
89
83
Occupancy rate due to the tour
operators, %
76
88
75
100
72
83
26