Are GreenLeaders also performance leaders? An econometric analysis of TripAdvisor hotel certification of GreenLeaders

Abstract

This paper aims to investigate the impact of the GreenLeaders designation on hotel performance under the joint theoretical framework of environmental corporate social responsibility and social identity theory. We focus on 1,198 individual hotel properties from five major cities in Texas between 2010 and 2019. A two-way fixed-effects model is applied to model monthly revenue per available room (RevPAR) and TripAdvisor ratings for each hotel. Results show that GreenLeaders certification leads to a 6.00% increase in hotels’ monthly RevPAR and a 4.25% increase in hotels’ monthly average TripAdvisor rating. This impact grew over time during the research period. The findings also unveil a set of moderating variables, such as hotel class and chain affiliation. More specifically, the effect of GreenLeaders certification is larger for upscale and independent hotels. The major results are also confirmed through a robustness analysis using propensity-score-based weighting and placebo tests. Lastly, implications are provided for hoteliers and investors.