Willingness to pay for green hotel attributes in the Norwegian hotel industry: A hedonic pricing approach

Abstract

Environmental friendly or green travel has emerged to be a vital part of the global travel industry over the past decade. Travel agencies and online travel search engines are therefore offering consumers sustainable lodging possibilities e.g. green hotels. This thesis focuses on exploring whether consumers are willing to pay the potential increased price to accommodate for their sustainable preferences i.e. a green price premium. Data on prices and amenities of green and non-green hotels in Norway is used to estimate a hedonic model of hotel room pricing, where the eco-friendly “Swan label” is used as a green certificate. The estimated results shows that consumers would be willing to pay between 157 - 193kr to avoid staying at a certified green hotel, i.e. the results does not suggest that the consumers are willing to pay a green price premium in the Norwegian lodging market.