Publication Date

8-2012

Abstract

Successful environmental sustainability (ES) initiatives aim for simultaneous environmental and economic benefits. Benchmarking these initiatives must therefore account for environmental and economic outcomes. To this end, the authors propose to construct a cost-based resource efficiency measure for ES from reported financial data. This approach links the environmental and economic performance outcomes by extracting information from resource related expenses normalized by RevPAR (revenue per available room). Through exploratory factor analysis of an eight-year panel of 984 U.S. hotels, the authors identified t w o factors that drive resource efficiency in hotel operations, one of which is operations-centered and the other customer behavior-centered. This two-factor measure quantifies the weights that operations and customer behavior contribute to resource efficiency and measures the systematic variations across key hotel operating characteristics. Such resource efficiency benchmarks complement the practice-focused environmental management systems developed by individual hotel companies and guidelines proposed by government agencies such as the U.S. Environmental Protection Agency.

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© Cornell University. Reprinted with permission. All rights reserved.

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