Determinants of a Customer’s Willingness to Pay (WTP) for Green Hotels: An Empirical Study of Generation Y in the Bangkok Metropolitan Area

Abstract

As attention to environmental responsibility is increasing, the number of travelers interested in environmental sustainability in the hotel industry is also rising. According to Official Statistics Registration Systems, Generation Y (Gen Y) is currently one of the largest groups in Thailand, accounting for 30.36 percent of the total population. This generation is known to have strong opinions about green issues and civic-mindedness. This research is focused on determining significant factors affecting the WTP for environmentally friendly hotels or green hotels by Gen Y.  Factors influencing use of environmental friendly hotels are derived and evaluated. The descriptive results show that approximately 55.7 percent of respondents are willing to pay for green hotels, the average price that they are willingness to pay for it is about 2,019 Baht per on standard room per night [AN1*]. A binary logistic regression was applied to determine the probability of being willing to pay for green hotels. The result of binary logistic regression analysis indicated that the age range within Gen Y, purchase experience, customer loyalty, monthly income, attitude, and green behaviors affect the probability of a person’s willingness to pay for green hotels.