BRM Research Paper

CHAPTER 1

1.1 INTRODUCTION

It is the move towards a “green revolution”, in order to gains momentum people throughout the India seek to alter the current path of rapid environmental degradation. The hotel industry also asked to participate in this growing trend of green revolution. In this paper our study examines how India’s leading hotel brands have put their full efforts to respond to environmental issues and invested significantly in order to go green. By use of the latest technologies and principles of sustainability and short-term goals, made hotel industry to transform itself into environmentally sound operations. And by installing various eco-friendly technology (such as solar panels, recycling bins, etc.), hotels can lower their environmental impact. The industry has not only the potential to save millions of rupees by “going green” and also become one of the channels for social change.Despite the opportunity, some hoteliers hesitate to invest in green initiatives because they are not convinced whether or not such investments will be financially beneficial to them. The implementation of green practices requires some initial investments and returns from such investment sometimes are difficult to come. One way to lessen this concern is to charge premiums for hotels’ green practices whether or not customers are willing to pay those additional charges.A study examines that some customers feels sustainable travel important and are willing to pay extra to support environmental sustainability others believe that the hotel has overall responsibility to fund those initiatives.Thus, the current study aims to examine the effects of hotel guests’ degree of environmental commitment on their willingness to pay premiums to support environmentally sustainable initiatives of hotels. Moreover, this study attempts to investigate the relationship between hotel types and hotel guests’ levels of willingness to pay for green practices.

1.2 SCOPE OF THE STUDY

To study the willingness of Hotel guest to pay a premium for environmental friendly and sustainable practices in India.

To study the relationship between the level of Hotel guest’s concern for environment and sustainable practices and willingness to pay for ‘GREEN PRACTICES’ in Delhi NCR region..

To investigate the relationship between gender of the guest and willingness to pay for ‘GREEN PRACTICES’.

To investigate the relationship between type of hotel visited by the guest and willingness to pay for ‘GREEN PRACTICES’..

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CHAPTER 2

2.1 Literature Review

2.1.1 NATIONAL RESEARCH PAPER

Dutta et al. (2014): The research paper examine the change in consumer patronage and willingness to pay at different levels of service attributes in restaurants in India. The authors used primary data via survey questionnaire method. The sample size is 308.The variable used are willingness to pay, service quality, food quality and ambiance. The hypothesis testing used in the report is anova. The result of the test showed that consumer willingness to pay varies with each service attribute as they improve from low to high. The result indicate that in case of high end fine dining restaurants ,quality of food is the most important attribute which is followed by other service attributes. Similar results were found in casual dining restaurants.

Critical Analysis:- The objective of the case study supports the main topic. The authors are clear with the objective of the case study. The authors have conducted their own survey and have analyzed it appropriately. The conclusion of the case is prepared properly.

Samdin et al. (2008): The research paper examines the socio-demography of visitors, the characteristics of visits of visitors and the characteristics of paying and any differences in WTP among visitors. The authors have used primary data using questionnaire method The authors have used Contingent valuation methods for measuring consumer preference for non-market goods available at TNNP. The sample size is 180. Variables used are age, sex, education, income and place of residence and place of purchase. The result of the test facilitate in establishing an efficient and realistic pricing policy for TNNP.

Critical Analysis:- The author uses Contingent valuation methods for measuring consumer preference for non-market goods. The author uses telephonic survey for data collection. The author gives proper conclusion of the case. The author analyze demographic segment. The source of data is not mentioned.

2.1.2 INTERNATIONAL RESEARCH PAPER

Roe et al. (2001):- The research paper examines the role of consumer willingness to pay for green electricity. A survey is designed to elicit consumers' willingness to pay for such attributes and using results from a hedonic analysis of actual price premiums charged for green electricity in several deregulated markets. The purpose of this paper is to provide some insight into US consumers' demand for deregulated residential electricity services that promise more favourable environmental profiles. The author has used primary data using Questionnaire Method. They have used random sampling method. The sample size is 835. The variables used are monthly price, contract terms, fuel source mix and air emissions profile. The hypothesis test used are ANOVA and a simple hedonic regression (linear ordinary least squares). The result of the test shows that that a wide array of population segments are willing to pay small amounts for tangible improvements in air emissions even if no alteration of power generation sources take place. The results also suggest that US consumers do value environmental benefits created from alterations

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in electricity generation methods and that US firms have responded with several product offerings priced to capture the value consumers hold.

Critical Analysis :- The objective of the case study supports the main topic. The authors are clear with the objective of the case study. The authors have conducted their own survey and have analyzed it appropriately. The conclusion of the case is prepared properly.

Miller et al. (2008):- The research paper examines a list of green attributes guests would prefer to have in the guest room of a hotel. According to the research done by the author no of green attributes include such items as recycling bins in the guest room, and energy saving lighting, refillable soap and shampoo dispensers. This study, very exploratory in nature, was conducted at a conference that focused on green development in the hospitality industry. The sample size is 170.The author’s collected primary data using Questionnaire method which is self-administered survey incorporated a combination of qualitative and quantitative questions over four sections. The test done to check the hypothesis is ANOVA. The first section included two qualitative questions, with the first question being: “what three words come to mind when you think of a green hotel”. The second section of the survey asked respondents to rate, using a 7-point Likert type scale, how strongly they agreed or disagreed (1 = strongly disagree, 7 = strongly agree), with the following statement: “I would like to have the following environmentally friendly attributes in a hotel room”. Section three of the survey included demographic questions such as gender, age, education level (Some College, Undergraduate Degree, Graduate Degree, Post Graduate Degree, Other), as well as occupation. The final section asked participants which environmentally friendly activities they currently perform at home, i.e. recycle cans and bottles, or use low flow water fixtures. The results of this study enable researchers to develop future research projects relating to environmental hotel attributes.

Critical Analysis: - The sample may be biased towards environmentally friendly activities. The results are not generalized to the entire population. The sample in the present study is small and rather homogeneous. The results, therefore, cannot be applied to the general traveling population. Another weakness of this study is the lack of control over the participants’ desire to respond the way they think they should, as opposed to responding with their true beliefs.

Carlsson et al. (2007):- The research paper examines Consumer willingness to pay for farm animal welfare: mobile abattoirs versus transportation to slaughter. The study is based on WTP based on a choice experiment (CE) using a mixed logit model for animal welfare attributes in pig production, including mobile slaughter and transport of live pigs limited by distance. The authors has used primary data using Questionnaire Method for the evaluation of transportation of animals for slaughter were instead collected using a Choice Experiment. The variables used are minced (ground) beef and chicken fillets with varying levels of price, product labels, feed type, outdoor production, transportation to slaughter and growth rate. They have used random sampling method. The sample size 1600. The hypothesis test used are ANOVA and Least square method, Paired T-Test method. The result shows that actual implementation implementation of mobile slaughter further depends not only on consumer preferences, but also on the actions of

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suppliers and the market structure within the food industry. The results useful in policy formation and formulating communication strategies within the food market chain.


Togridou et al. (2006):- The research paper examines visitors' willingness to pay (WTP) for the National Marine Park of Zakynthos. The author has used random sampling method from three beaches Laganas, Kalamaki and Gerakas. They have also used primary data using Questionnaire method. Questionnaires took about 10–15 min for each respondent to fill in. The sample comprised both Greek and foreign visitors (40.70% and 59.30% of the total sample, respectively). The sample size used 550. The hypothesis testing used are ANOVA, Cramer's V association measure , Regression analyses(multiple regression analyses).The variable used are gender, age, education, monthly income, children. The result shows that More than 96% of foreign visitors stayed within park boundaries. The result shows that upper class is ready to pay for NMPZ in order to maintain sustainable eco-friendly environment. The result suggested to provide environmental education which act as a feedback.


Loureiro et al. (2003):- The research paper examines consumer response and consumer willingness to pay for a mandatory country-of-origin labeling program and for steak and hamburger labeled as "U.S. Certified Beef." In this research consumers are surveyed in various grocery stores. The author has used primary data using using Questionnaire method which is provided with”Yes"/"No" answers to the survey questions. To analyze the choices they also use Logit model based on logistic probability. The hypothesis testing used are ANOVA and Least square method. In this research 243 consumer were surveyed. The variables used in the research are gender, age, Beef Shopper, education, kids, family size, income, and race. The result shows that the respondents were also willing to pay an average of 38% to 58% more for individual products labeled as "U.S. Certified Steak" and "U.S.Certified Hamburger." Logit results suggest females, are more likely to support mandatory country-of-origin labeling.


Zielke et al.(2007):The research paper examines customers’ willingness to purchase new store brands. The author wants to analyze and identify the factors influencing customer willingness to purchase new store brands. The authors used primary data in their study. Questionnaire method was used to collect data and random sampling was used. The sample size of their study amounted to 990.The variables used in the study are age, gender, household size and income.

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Anova and least square method is used to prove their study. The results of the tests showed that consumer willingness is lowest for product groups associated with high social risks. Accordingly, premium brands are also preferred. The results also showed the price is smaller and nonlinear. It also showed that the attitude toward a specific store brand has a huge impact on consumer willingness to purchase while the attitude towards store brands in general is less important.

Critical Analysis:- The authors are not clear with the objective of the case study. Also, the objective of the case study has not been specified. Even though, the authors have used primary data and have conducted their own survey with proper reference, it doesn’t matter if the objective is not mentioned.

Napolitano et al.(2010):The research paper examines the effect of information about organic production on beef liking and consumer willingness to pay. According to the research done by the authors, a number of western countries are showing oversupplies in the organic meat are costly. The authors collected primary data using primary data using questionnaire method in three different parts of Italy ,i.e. Potenza , Ancona and Udine. Sample size of their study is 190.variables used are willingness to pay, age ,sex and level of education. The test to done to check the hypothesis are Paired t-test, person’s coefficient of correlation and ANOVA. The results showed the main limit to purchasing organic meat remain price because of high production cost which are affected by organic rules and small scale systems. The result also showed that the consumer are influence by the level of information about organic production and move their actual acceptability to expected liking.


Kimenju et al.(2007):The research examines consumer willingness to pay for genetically modified food products Kenya. Consumer acceptability for modified food products is different in different parts of the world. In US , consumer are willing to pay a premium on such food products. The authors want to study the same in Kenya. The authors used primary data using questionnaire method to collect their data. The variables used are level of education, employment status, income and awareness. The hypothesis testing was done using Chi squared testing method. The result showed that large majority of the surveyed consumers were willing to pay for G.M maize meals at the same price as their favorite maize meal brand. The survey showed that consumers were willing to pay premium when they were told about the positive effects of G.M products. On the other hand, the same consumers were unwilling to even buy the product at all when they were told about the negative effects of G.M products.


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Tully et al.(2014):The research paper examines the role of the beneficiary in willingness to pay for socially responsible products. The authors of the research paper have used secondary date for their research. Sample size is 186.Random sampling was used by the original author. The variables used are willingness to pay, beneficiary and domain. The hypothesis testing used used in the report are chi squared test, q-test , and OLS regression. The research shows that people are willing to pay a positive and significant premium for socially acceptable products. Almost 60% of the people indicated that they are willing to pay the premium for these products. The research also suggested that research is necessary to investigate the mechanism underlying the independent variables affecting the variations in willingness to pay.


Kang et al.(2011):The research examines hotel guest’s willingness to pay a premium for environmentally friendly and sustainable practices of the U.S hotel industry. The goal of the research is to investigate the relationship between the level of U.S guest’s environment concern by the new ecological Paradigm scale(NEP) and willingness to pay a premium for green practices. The authors have used primary data via questionnaire method. Random sampling is used by the researchers. The sample size is 455.The Survey was conducted via an online survey. The subjects were selected from people who requested tourism information for destination marketing organization or convention or visitor bureaus in Florida and Texas. The twi main factors are: NEP and WILLINGNESS to PAY and the & main control variables are: INCOME , AGE , EDU,MS,CHILD and H_WORK. Test conducted to test the hypothesis are t test, multiple regression, ANOVA and correlation. The study done by the authors showed positive relation between the level of environment concern and willingness to pay a premium for hotels green initiative.

Critical Analysis: - The objective of the case study supports the main topic. The authors are clear with the objective of the case study. The authors have conducted their own survey and have analyzed it appropriately. The conclusion of the case is prepared properly.

Boccaletti et al.(1999):-The research paper explains consumer willingness-to-pay (WTP) for food products obtained through the application of biotechnology. The author wants to analyze the respondent’s awareness and WTP for GM foods. The authors have used telephonic survey for data collection. The sample size is 384. Variables used are age, sex, education, income and place of residence and place of purchase. The result of the test shows that consumers have a low degree of knowledge of the issue, but an overall positive attitude towards genetically modified (GM) foods. Estimation results of an ordered probit model suggest that WTP is mainly affected by income and information.

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Critical Analysis:- The author uses telephonic survey for data collection. The author gives proper conclusion of the case. The author analyze demographic segment. The source of data is not mentioned.

Carpio et al.(2008):- The research paper explains South Carolina (SC) consumers’ willingness to pay for “SC grown” products. The authors have used Contingent valuation methods for measuring consumer preference for non-market goods. The author analyzes two types of products: produce products and animal products. The authors have used telephonic survey for data collection. The sample size is 500. Variables used are age, sex, education, income and place of residence and place of purchase. The result of the test show that the importance of monitoring changes in Consumer preferences in general and for local food systems.

Critical Analysis:-The author uses Contingent valuation methods for measuring consumer preference for non-market goods. The author uses telephonic survey for data collection. The author gives proper conclusion of the case. The author analyze demographic segment. The source of data is not mentioned.

Schubert et al. (2010):- The research examines paper Consumer attitudes and behavioral intentions towards environmentally sustainable practices in restaurants is an under-explored area in the hospitality literature, despite the growing ‘green’ trend. The authors have used primary data using questionnaire method. The authors have used random sampling method. The sample size is 455. Variables used are age, sex, education, income and place of residence and place of purchase. The result of the test show that there is an unfilled market niche for ‘green’ restaurants, as customers care about restaurants protecting the environment and would be willing to pay more to offset any additional costs associated with ‘green’ practices.

Critical Analysis:- The author uses Contingent valuation methods for measuring consumer preference for non-market goods. The author uses telephonic survey for data collection. The author gives proper conclusion of the case. The author analyze demographic segment. The source of data is not mentioned.

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CHAPTER 3

3 RESEARCH METHODOLOGIES

This paper is completely based on survey work. The goal of this research is to investigate the relationship between the level of Indian Hotel Guest environmental concern and their willingness to pay premiums for hotels green initiatives.

3.1 TYPE OF RESEARCH DESIGN

The research design refers to the overall strategy that you choose to integrate the different components of the study in a coherent and logical way, thereby, ensuring you will effectively address the research problem; it constitutes the blueprint for the collection, measurement, and analysis of data. The research uses exploratory research design as it is flexible and involves quantitative data analysis.

3.2 SURVEY DEVELOPMENT

The current study developed a survey instrument which included three major parts. The first section of the survey queries the type of hotel that a respondent most frequently uses and the respondent’s willingness to pay a premium for a hotel’s green initiatives. The survey asks two WTP questions. The first section of the survey queries the type of hotel that a respondent most frequently uses and the respondent’s willingness to pay a premium for a hotel’s green initiatives. The survey asks two WTP questions. The first question, using a 5-point Likert scale from totally disagrees to totally agree. The second section of the survey consists of questions regarding a respondent’s attitude towards environmental concern. The last section of the survey consists of inquiries to accumulate respondents’ demographic characteristics. Questions include gender, age, education level, income level, marital status, and number of children.

3.3 TECHNOQUE OF DATA COLLECTION

In this research paper we have collected primary data using survey question method. The data was collected via an online survey conducted amongs the students of MBA(m&s) and the friends and family member of the researchers.

3.4 SAMPLE SIZE

The sample size of 105 was taken into consideration. The survey covered the respondents of Delhi NCR region. The survey was conducted by using questionnaire method.

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3.5 SAMPLING TECHNIQUEConvenience sampling was used to obtain data. Sample includes responses from friends and family.

3.6 QUESTIONNAIRE FORMULATIONThe questionnaire was prepared after extensive study of various literature review. The questionnaire used in Kang et al.(2011) was used in obtaining the survey data.The questionnaire consists of 18 questions divided in 3 part:

10 NEP questions 2 WTP questions 6 questions about the respondents

3.7 TECHNIQUE USED FOR DATA ANALYSIS

3.7.1 INDEPENDENT T-TESTThe Independent Samples t-Test compares the means of two independent groups in order to determine whether there is statistical evidence that the associated population means are significantly different. The Independent Samples t-Test is a parametric test.The Independent Samples t-Test is commonly used to test the statistical differences between the means of two or more groups, statistical differences between the means of two or more interventions or the statistical differences between the means of two or more change scores

3.7.2 ONE WAY ANOVAThe one-way analysis of variance (ANOVA) is used to determine whether there are any significant differences between the means of two or more independent (unrelated) groups (although you tend to only see it used when there are a minimum of three, rather than two groups). For example, you could use a one-way ANOVA to understand whether exam performance differed based on test anxiety levels amongst students, dividing students into three independent groups (e.g., low, medium and high-stressed students). Also, it is important to realize that the one-way ANOVA is an omnibus test statistic and cannot tell you which specific groups were significantly different from each other; it only tells you that at least two groups were different.

PEARSON COEFFICIENT OF CORRELATIONCorrelation between sets of data is a measure of how well they are related. The most common measure of correlation in stats is the Pearson Correlation. The full name is the Pearson Product Moment Correlation or PPMC. It shows the linear relationship between two sets of data. In simple terms, it answers the question, Can I draw a line graph to represent the data? Two letters are used to represent the Pearson correlation: Greek letter rho (ρ) for a population and the letter “r” for a sample.High correlation: .5 to 1.0Medium correlation: .3 to .5Low correlation: .1 to .3.3.8 SOFTWARE PACKAGES USED FOR ANALYSIS

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STATISTICAL PACKAGE FOR THE SOCIAL SCIENCES(SPSS)SPSS Statistics is a software package used for statistical analysis. SPSS is a widely used program for statistical analysis in social science. It is also used by market researchers, health researchers, survey companies, government, education researchers, marketing organizations, data miners, and others.

Statistics included in the base software:

Descriptive statistics: Cross tabulation, Frequencies, Descriptives, Explore, Descriptive Ratio Statistics

Bivariate statistics: Means, t-test, ANOVA, Correlation (bivariate, partial, distances), Nonparametric tests

Prediction for numerical outcomes: Linear regression Prediction for identifying groups: Factor analysis, cluster analysis (two-step, K-means,

hierarchical), Discriminant

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CHAPTER 4

4.1 ACTUAL ANALYSIS

Independent t–Test

HO:- There is relationship between two variables (Gender and H_Work).

Ha:- There is no relationship between two variables(Gender and H_Work).

TABLE 1(INDEPENDENT T-TEST)

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ONE- WAY ANOVA

Ho:- THERE IS SIGNIFICANT DIFFERENCE BETWEEN THE MEAN OF µ1,µ2, µ3, µ4

Ha: THERE IS NO SIGNIFICANT DIFFERENCE BETWEEN THE MEAN OF µ1,µ2, µ3, µ4

µ1=Income

µ2=Education_level

µ3=Marital Status

µ4=H_Type

TABLE 2(ONE WAY ANOVA)

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Correlation

TABLE 3(CORRELATION)

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4.2 RESULT INTERPRETATION

Before performing the main analysis that examines the effects of the two main factors (NEP and hotel type) on willingness to pay (WTP) a premium for green initiatives, and after controlling for demographic variables, the study examined group differences in WTP for each individual variable.. For investigating a group difference for the two dichotomous variables of GENDER and working experience in a hotel (H WORK), the study performed an independent t-test. The analysis shows that GENDER (t-value =11.160) shows a statistically significance difference, while H WORK (t-value = 79.041) shows no difference. The findings suggest that males are willing to pay a higher percentage premium which is inconsistent.

The study, next, performed a One-Way ANOVA to investigate whether or not an overall group difference in WTP exists for four multiple categorical variables: hotel type (H TYPE), income level (INCOME), educational level (EDU), and marital status (MS). The analysis presents no overall group difference for H TYPE (F-value = .945; p-value = 0.0.483), EDU (F-value = 0.734; p-value = 0.661), and MS (F-value = 0.355; p-value = 0.941), while a significant difference for INCOME (F-value = 1.388; p-value = 0.211) exists at the 5% significance level. For H TYPE, the study further performed a post-hoc analysis to investigate which group significantly differs from others. The post-hoc analysis suggests that economy hotel guests do not differ from mid-priced hotel guests in their willingness to pay a premium, and mid-priced hotel guests do not differ from luxury hotel guests; however.

Last, the study performed Pearson’s correlation analysis to investigate the presence of a relationship between three continuous variables (NEP)\and WTP. The correlation between NEP and WTP is highly positive and statistically significant.

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CHAPTER 55.1 CONCLUSION

The main purpose of this study is to investigate the effects of hotel guests’ levels of environmental concern and choices for hotel type on their willingness to pay a premium for hotels’ green initiatives. By conducting regression analysis with a sample of 105 respondents, the study found a positive and significant impact from the level of environmental concern, measured by the New Ecological Paradigm, (NEP) on willingness to pay a premium for green practices. The study’s findings support the social identity theory and the means-end theory. That is, a positive relationship between NEP and WTP in this study may ensure that Indian hotel guests who have greater interests in environmental issues are more likely to identify with hotels that conduct a higher degree of green practices which may be enduring, distinctive, and able to satisfy their self-esteems. And, from the study’s finding INDIAN hotels’ green initiatives, as a differentiated attribute of hotel services, may play the role of means that reinforce consumption decisions of hotel customers with greater concerns for environmental issues by satisfying their values including self-esteem. The study shows a positive relationship between the level of environmental concern and willingness to pay a premium for hotels’ green initiatives.

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BRM Research Paper