A hedonic approach to study willingness to pay for certified green hotel by customers in Thailand

Green hotels are becoming increasingly popular as more and more people become conscious of the impact of their travel on the environment. There are several certifications known as Green Building Certificates given to hotels all over the world to encourage them to move towards eco-friendly attitude. Having a certification is often considered as a marketing tool. These certifications are often internationally known. Although green hotel has been gaining in popularity by both hotel business and tourist demand in Thailand, there is limited information whether tourists are willing to pay more, and if so, how much more. This research studies tourists’ willingness to pay for staying in green hotel. The method for the study employs the hedonic pricing model to investigate hotel attributes in the determination of hotel room rates in Phuket, Thailand. The hotel attributes studied include green leaf certification, hotel star, the distance of hotel from the nearest beach, the distance of hotel from the city centre and other facilities of the hotel such as breakfast, meeting room, internet access, shuttle service, fitness centre, pool, and restaurant. The results show that tourists are willing to pay up to 68 percent premium for staying in green hotel. In addition, hotel star rating and some facilities such as free breakfast, fitness centre and shuttle service also have positive effects on room rates. However, the further away the hotel from the beach the lower the room rate.