Examining the effects of hotel reputation in the relationship between environmental performance and hotel financial performance

Abstract

Studies that have examined the relationship between environmental performance and the financial performance of hotels are inconclusive because some have found positive relationships and others negative links. For this reason, literature demands new research to expand knowledge about the variables that could have a mediating or moderating role in this relationship. During this paper, three models have been contrasted using the Partial Least Squares (PLS) methodology, which is particularly suitable to test the relationships between environmental performance and financial performance in the hotel industry. This is the first study to provide an integrated model involving environmental performance, financial performance, and the moderate mediation offered by reputation in the hotel industry. The results suggest that hotels that make efforts towards environmental performance achieve better financial performance and that the hotel's reputation plays a decisive moderating role in this relationship.