Effects of environmental sustainability practice in the economy hotel to Gen Zer’s purchase decision: Behavior economy approach using choice based conjoint analysis

Abstract

Generation Z consumers value sustainability and affordable accommodation. To target this demographic and gain a competitive edge, hotels should adopt socially responsible practices. Implementing a well-crafted CSR plan lays the foundation for sustainable development, that can lead to enhancing long-term financial performance of hotel companies. Few studies have explored environmentally friendly or green economy hotels. This study investigates consumer willingness to pay for green economy hotels, using a DCE and conjoint analysis to uncover generational differences. Findings reveal that Generation Z consumers exhibit a higher willingness to pay for environmentally sustainable economy hotels. The results indicate that due to an increased maximum willingness to pay for green features and green brand perception, economy hotels could charge up to $36 USD more for green economy hotel rooms. This research provides valuable insights for identifying consumer’s willingness to pay with and consumer segmentation among Generation Z and non-Generation Z consumers.