From innovation to sustainability: Sustainability innovations of eco-friendly hotels in Taiwan

International Journal of Hospitality Management 63 (2017) 44–52

Contents lists available at ScienceDirect

International Journal of Hospitality Management journal homepage: www.elsevier.com/locate/ijhosman

From innovation to sustainability: Sustainability innovations of eco-friendly hotels in Taiwan Jeou-Shyan Horng a , Chih-Hsing Liu b , Sheng-Fang Chou c , Chang-Yen Tsai d , Yu-Chun Chung e,∗ a Department of Food and Beverage Management, Jinwen University of Science and Technology, No. 99, Anzhong Rd., Xindian Dist., New Taipei City 23154, Taiwan b Research Center of Tourism School, Leisure & Recreation Administration Department, Ming Chuan University, 5 De Ming Rd., Gui Shan District, Taoyuan County 333, Taiwan c Research Center of Tourism School, Department of Hospitality Management, Ming Chuan University, 5 De Ming Rd., Gui Shan District, Taoyuan County 333, Taiwan d Department of Hospitality Management, MingDao University, 369 Wen-Hua Rd., Pettow, ChangHua 52345, Taiwan e Department of Management Sciences, Tamkang University, No. 151, Yingzhuan Rd., Tamsui Dist., New Taipei City 25137, Taiwan

a r t i c l e

i n f o

Article history: Received 20 May 2016 Received in revised form 17 February 2017 Accepted 28 February 2017 Keywords: Diffusion of innovations Environmental marketing strategy Hotel Organizational environment Sustainable development Sustainability innovations Taiwan

a b s t r a c t Sustainable innovation is a critical attribute in modern hotel management, as is widely recognized by experts and hotel managers alike. This paper develops and tests a new integrated theoretical model of associations among innovation diffusion, environmental marketing strategy, sustainability innovations, and the organizational environment. This research also considers the mediating effect of environmental marketing strategy and the moderating role of the organizational environment. The results of a study that included 367 managers of eco-friendly hotels in Taiwan provide support for this model across various dimensions of hotels’ sustainable innovation. The present study found relationships among innovation diffusion, environmental marketing strategy and sustainability innovations, and a mediating effect of environmental marketing strategy. The results also confirmed that the organizational environment moderates the relationship between innovation diffusion and environmental marketing strategy. That is, a supportive organizational environment will enhance the effect of innovation diffusion on environmental marketing strategy. © 2017 Published by Elsevier Ltd.

1. Introduction Sustainability is founded on decreasing environmental impacts, closing the consumption cycle to eliminate wasteful outputs, and decreasing unnecessary inputs (Epstein, 1996; McDonough and Braungart, 2002). Because businesses play a leading role in the global economy through the production of goods and services, their involvement is integral to increasing sustainability and to communicating its value. Increasingly, business enterprises have discovered that competitive advantages may be captured by measuring success in terms of the triple bottom line (TBL): social equity, ecological integrity, and financial profitability (Andriate and Fink, 2008). Further, facilitating consumer decision-making, and serv-

∗ Corresponding author. E-mail addresses: [email protected] (J.-S. Horng), [email protected] (C.-H. Liu), [email protected] (S.-F. Chou), [email protected] (C.-Y. Tsai), [email protected] (Y.-C. Chung). http://dx.doi.org/10.1016/j.ijhm.2017.02.005 0278-4319/© 2017 Published by Elsevier Ltd.

ing a marketing mechanism to differentiate products and services (Buckley, 2002; Deng-Westphal et al., 2015). Leaders of companies are realizing that if the natural resources upon which they depend become depleted, ecological and financial stability will be disrupted (Hawken et al., 1999). This study focuses on sustainability in hotels because companies in this industry are responding to the demands of environmentally conscious stakeholders, a planet in ecological crisis and the risks of litigation and regulation while attempting to maintain profitability and market growth (Edwards, 2005; Freeman et al., 2000; Hitchcock and Willard, 2006). Hotels create a significant environmental impact and must take a more proactive approach to reduce it (Becken et al., 2001; Brown, 1996). Within the tourism industry, hotels require the greatest amount of energy (Bohdanowicz, 2005). Sustainability is therefore necessary not only for the betterment of the natural environment but also for maintaining competitive hotel performance. Erdogan and Baris (2007) consider that some hotel managers now understand that long-term economic sustain-

J.-S. Horng et al. / International Journal of Hospitality Management 63 (2017) 44–52

ability and growth depend upon the nature of their environmental policies. Xu and Gursoy (2015) identify the impact of the environmental, social and economic dimensions of sustainable hospitality supply chain management actions on customers’ attitudes and behaviors including satisfaction, loyalty and willingness to pay a premium for sustainable hospitality goods and services utilizing data collected from U.S. consumers who frequently stay at hotels. With prosperous growth in the hospitality market, hospitality management programs are some of the most rapidly growing majors in Taiwan (Horng et al., 2011; Horng and Lee, 2005; Wang et al., 2014). However, gaps remain between academia and practical industry. Because studies on environmental marketing/management have mainly focused on manufacturing firms, due to their greater exposure to ecological issues in the form of inputs and outputs, the investigation needs to extend to green issues in the services sector, which has often been described as destroying the environment ‘silently’ (Álvarez-Gil et al., 2001; Carmona-Moreno et al., 2004; Foster et al., 2000). A driving force in this sector is hospitality, which, with its unprecedented growth in recent decades, has been responsible for using excessive natural resources, consuming a great amount of energy, and damaging the biophysical environment (Rodriguez and Cruz, 2007). Although the uniqueness characterizing the relationship between hotels and the natural environment has received increasing attention in the field (Kasim, 2006), environmental marketing issues within the hotel industry have been only tangentially tackled (Hudson and Miller, 2005; Leonidou et al., 2013). The present study aims to fill this void in the eco-friendly hotel literature by proposing and testing an integrated model of associations among innovation diffusion, environmental marketing strategy, sustainability innovations, and the organizational environment. That is, whether innovation diffusion can effectively contribute to sustainable innovation through environmental marketing strategy and organizational environment.

2. Theoretical background 2.1. Diffusion of innovations, environmental marketing strategy, and sustainability innovations Diffusion of innovations theory (DIT) defines an innovation as an idea, practice, or object that is perceived as new by an individual or other unit of adoption (Rogers, 2003). As sustainability is spreading throughout numerous industries (Esty and Winston, 2009), DIT offers a highly appropriate approach for examining hotel sustainability (e.g., Deng-Westphal et al., 2015; Smerecnik and Andersen, 2011). Hsu et al. (2007), and Smerecnik and Andersen (2011) find that diffusion of innovations includes relative advantage (e.g., add significant value and market advantage to profile and services), compatibility (e.g., compatible with existing employee practices), simplicity (e.g., a simple and easy process), trialability (e.g., test the adoption on a smaller scale), and visibility (e.g., the produced benefits of promoting innovation by the company is evident). Leonidou et al. (2013) reveal that environmental marketing strategy includes product-service (e.g., use environmentally friendly supplies and consumable products), price (e.g., build environmental compliance costs into the service price), distribution (e.g., show a preference for suppliers and strategic partners that embrace environmental responsibility), and promotion (e.g., use ecological arguments in advertisements, promotional material and marketing campaigns). Salmones et al. (2005), and Smerecnik and Andersen (2011) consider that sustainability innovations involve environmental communication (e.g., environmental education of guests), resource conservation (e.g., pay attention to recycling), corporate social

45

responsibility (e.g., respect and protect the natural environment), energy conservation (e.g., use environmentally friendly building materials), culture innovation (e.g., combine local culture to enhance innovation value), sustainability management (e.g., assessment of greenhouse gas emissions and carbon footprint), and technology innovation (e.g., cloud systems and electronic forms). Besides, Deng-Westphal et al. (2015) consider that ecolabels can be adopted by a wide range of tourism suppliers/producers and destinations which offer certain environmentally friendly products and services. They are committed to adopt sustainable practices and able to afford the required resources for obtaining certification. When companies seek to implement new environmental policies, practices or products, regardless of their various motivations (Bansal and Roth, 2000), they are introducing a sustainability innovation. How companies perceive the concept of sustainability and its value and adopt the innovation is a complex process involving numerous facets of communication (Berkhout and Rowlands, 2007; Dunphy et al., 2003; Vasi, 2006), and it can be explained through DIT. Rogers (2003) contends that adopting an innovation is based on five characteristics of the innovation: relative advantage, compatibility, simplicity, trialability, and observability. Studies on sustainability innovations have primarily investigated such topics as the diffusion of environmental sustainability policies (Bergst¨rom and Dobers, 2000; Foxon and Pearson, 2008; Tsoutsos and Stamboulis, 2005), sustainability innovations adopted in geographical regions (Geltz, 2008; McEachern, and Hanson, 2008; Vasi, 2006, 2007), and consumer adoption of sustainability innovations (Labay and Kinnear, 1981). Studies have not systematically investigated the diffusion of sustainability innovations in the hotel industry. In contrast with previous studies that focus on solutions within the constraints of what is already known, Lim (2016) presents a fresh perspective in the form of creativity toward greater sustainability. Lim (2016) adopts an inductive reasoning systems approach to develop a creativity framework for greater sustainability in hospitality and tourism. More specifically, Lim (2016) offers a contemporary overview of sustainability and a thorough explanation of the creativity concept and its application in these industries. In doing so, Lim (2016) provides greater clarity on the creativitysustainability relationship in hospitality and tourism. Numerous diffusion studies show that the successful adoption of innovations can be predicted from the perceived innovation characteristics of relative advantage, compatibility, simplicity, trialability, and observability (Rogers, 2003). Though it has not been widely used in sustainability innovations, DIT has been used to explain the spread of sustainable prevention innovations (Johnson et al., 2004), and renewable energy technologies (Tsoutsos and Stamboulis, 2005). Tsoutsos and Stamboulis (2005) integrated the supply- and demand-side perspectives, arguing that a successful policy for the speedy deployment of renewables should focus on the systemic innovation processes that characterize the development and sustainable diffusion of renewables. The current study was conducted because few studies have yet to test these important diffusion variables in the context of environmental sustainability in hotels (e.g., Le et al., 2006). This study thus presents the following hypotheses: Hypothesis 1. Innovation diffusion is positively related to environmental marketing strategy. Hypothesis 2. Innovation diffusion is positively related to sustainability innovations. Hypothesis 3. Environmental marketing strategy is positively related to sustainability innovations.

46

J.-S. Horng et al. / International Journal of Hospitality Management 63 (2017) 44–52

2.2. The mediating role of environmental marketing strategy

Organizational environment

H5

Environmental management has become the reality and a marketing buzzword for the industry and policymakers (DengWestphal et al., 2015). One of the most important sustainability innovations in a resort’s organizational structure is the adoption of an environmental strategy and management plan (Smerecnik and Andersen, 2010). Despite its importance, environmental stewardship is not always the top priority in the hotel industry. Bohdanowicz (2006) reveals that hotel operators generally recognize the need for environmental protection and are involved in a number of activities. The economic situation and proenvironmental efforts initiated by the government are found to have an impact on certain aspects of hoteliers’ attitudes and actions. The survey further indicates the two major directions that need to be followed when introducing environmental sustainability into the hotel industry. The first involves incorporating responsible technical and behavioral practices in the sector. The second highlights the necessity of initiating greater demand for “green” practices from customers. El Dief and Font (2010) find that various organizational contextual factors are the best predictors of more proactive green marketing behavior in the hotel sector. Many hotel chains recognize the advantages of reducing their environmental impact through new environmental policies and initiatives. Larger hotels tend to implement more strategic environmental management practices (L´ıopez-Gamero et al., 2008; Mensah, 2006), while the personal values and beliefs of managers in small hotel operations have been found to be predictors of sustainability adoption (Tzschentke et al., 2008). A significant difference has been observed between chain-owned hotels and independent hotels; the latter rely on managers to introduce sustainability, while the former have more strategic environmental policies and values (LIFE, 2001). In this study, we attempt to examine the mediating role of environmental marketing strategy between diffusion of innovations and sustainability innovations. Therefore, the following is hypothesized here:

zation, an emphasis on the status quo, a conservative and low-risk attitude among top management, and excessive time pressure (Amabile, 2012). Organizational support for innovation establishes a friendly environment for encouraging information exchange and the communication of ideas, as well as a reward system for recognizing the initiation of creative ideas (Horng et al., 2016). Although innovation efforts can fail, organizations must do their best to eliminate obstacles (e.g., criticism) or issues that hamper the implementation of innovation procedures. Completely differentiated from the studies described above, we consider organizational environment to play a moderating role between innovation diffusion and environmental marketing strategy. Thus, the following hypotheses are proposed:

Hypothesis 4. Environmental marketing strategy mediates the relationship between the diffusion of innovations and sustainability innovations.

Hypothesis 5a. The organizational environment positively moderates the relationship between innovation diffusion and environmental marketing strategy.

2.3. The moderating role of organizational environment The organizational environment includes all of the extrinsic motivators that have been shown to undermine intrinsic motivation and a number of other factors in the environment that can serve as obstacles or as stimulants to intrinsic motivation and creativity (Amabile, 2012). Adopting innovation is dependent on perceived benefits and on the compatibility of an innovation with a company’s organizational structure, attitudes toward the innovation and decision-making processes (Higa et al., 1997). Deng-Westphal et al. (2015) also present a conceptual framework examining influential factors for decisions to adopt tourism ecolabels, including perceived innovation attributes (e.g., relative advantage, complexity, compatibility, communicability, cost), perceived environmental characteristics (e.g., customer demands, level of competition, government and agencies), and perceived organizational characteristics (i.e., size, location and type of business, greenness at firm level and managers’ attitude toward change). Beyond organizational structure, the ability to adapt to change is a strong predictor of a resort’s adoption of innovations (DeCanio et al., 2000; Higa et al., 1997). Research has revealed a number of environmental factors that can block innovation, such as norms of harshly criticizing new ideas, political problems within the organi-

H5a

Diffusion of innovations

H5b H2

H5c

Sustainability innovations

H1

H4

H3

Environmental marketing strategy

Fig. 1. Research framework.

The organizational environment positively Hypothesis 5b. moderates the relationship between innovation diffusion and sustainability innovations. Hypothesis 5c. The organizational environment positively moderates the relationship between environmental marketing strategy and sustainability innovations. 2.4. Theoretical framework Considering the relationships among innovation diffusion, environmental marketing strategy, sustainability innovations and the organizational environment, this study develops an integrated model to capture these salient factors from an organizational perspective and assess the formation of hotels’ sustainability innovations. Fig. 1 shows the proposed theoretical framework. 3. Research methods 3.1. Instrument Two main parts were included in the questionnaire: demographic information and hotel managers’ actual attitudes toward hotels’ sustainable innovation. The first part collected basic demographic information from the respondents, including their gender,

J.-S. Horng et al. / International Journal of Hospitality Management 63 (2017) 44–52 Table 1 Confirmatory factor analysis results and relevant composite reliability. Dimensions Diffusion of innovations (Hsu et al., 2007; Smerecnik and Andersen, 2011) Relative advantage Compatibility Simplicity Trialability Visibility Composite reliability Cronbach’s alpha Environmental marketing strategy (Leonidou et al., 2013) Product-service Price Distribution Promotion Composite reliability Cronbach’s alpha Sustainability innovations (Salmones et al., 2005; Smerecnik and Andersen, 2011; self-developed) Environmental communication Resource conservation Corporate social responsibility Energy conservation Culture innovation Sustainability management Technology innovation Composite reliability Cronbach’s alpha Organizational environment (Amabile, 1996) Composite reliability Cronbach’s alpha

Reliability

0.94 0.67 0.71 0.84 0.62 0.70 0.81

0.96 0.95 0.95 0.96 0.94 0.95

0.92 0.93 0.93 0.85 0.89 0.96 0.92 0.92 0.95

0.93 0.92

department, position, seniority and so on. In the second part of the questionnaire, several measurements of participants’ attitudes toward experiences with hotels’ sustainable innovation (i.e., diffusion of innovations, environmental marketing strategy, sustainability innovations, and organizational environment) were collected using 79 items. All items were accompanied by seven-point scales (1 = extremely disagree to 7 = extremely agree). Diffusion of innovations was measured using an 18 items scale (five dimensions: relative advantage, compatibility, simplicity, trialability, visibility) from Hsu et al. (2007), and Smerecnik and Andersen (2011). Environmental marketing strategy was measured following a 15 items scale (four dimensions: product-service, price, distribution, promotion) provided by Leonidou et al. (2013). Measures of sustainability innovations were adapted from extant research (Salmones et al., 2005; Smerecnik and Andersen, 2011) and included 42 items (seven dimensions: environmental communication, resource conservation, corporate social responsibility, energy conservation, culture innovation, sustainability management, technology innovation). Finally, organizational environment measure was drawn from Amabile (1996) and included four items. The final measures are provided in the Appendix. The backtranslation method was used. Three scholars who had sufficient language skills in both English and Chinese were hired to check the accuracy of the translation used in this study. Table 1 shows all of the measuring dimensions, the reference sources, the composite reliability, and the Cronbach’s alpha for all variables.

47

Table 2 Demographic variables of respondents. Item Gender Male Female Department Housekeeping Management Public relation Marketing Human resource Other Position High-level executive Mid-level executive Grassroots director Hotel property Business Conference Leisure Spa Eco-friendly Transit

Num.

Percentage

142 224

38.7 61.0

114 82 20 57 28 56

31.1 22.3 5.4 15.5 7.6 15.3

65 136 106

17.7 37.1 28.9

155 2 110 25 23 4

42.2 0.5 30.0 6.8 6.3 1.1

inappropriate statements were deleted or revised to clarify the measurement items and respond to the collected comments. The final data were collected from 94 eco-friendly hotels, which were selected by the Environmental Protection Administration, Executive Yuan in Taiwan. To implement green action, these ecofriendly hotels call on consumers not to replace the sheets, towels, give preferential way to consumers, and save the cost of environmental protection to help disadvantaged groups. As this study focused on the managerial class, five questionnaires were administered to each hotel. Finally, 367 usable questionnaires were returned. The data were obtained by a self-reported questionnaire survey. The sample’s demographics are shown as Table 2. The sample contained more female respondents (61.0%) than male respondents (38.7%). Most respondents worked in the housekeeping department (31.1%). A majority of the respondents (37.1%) were mid-level executives. Most respondents worked in a business hotel (42.2%). 3.3. Structural equation modeling Structural Equation Modeling (SEM) was employed to examine the hypothesis models and mutual relationships among the variables. Anderson and Gerbing (1988, 1992) suggested that Confirmatory Factor Analyses (CFAs) must be conducted before SEM can be used. Thus, the current study conducted CFAs for each of the four constructs independently to test the goodness of fit of each construct. The results of the independently constructed CFAs are shown in Table 1, which indicates the goodness of fit of each of the construct measurement models. Second, this study examined the hypothesis model by identifying the causal relationships among variables (as originally presented in Fig. 1) to determine the overall structural model fit. Finally, the present study conducted additional tests concerning the robustness of the structural model findings to find the best fit of this study. Testing and comparing models can help assess the robustness of the structural model.

3.2. Sampling

4. Results

In addition to the pretest, this study asked three scholars who had teaching or research experience in sustainable tourism and hospitality to complete the questionnaire. As a result of the pretests and interviews, minor wording adjustments were made, and some

4.1. A test of the structural model Table 3 reports the descriptive statistics (means and standard deviations), average variance extracted (AVE), and related corre-

48

J.-S. Horng et al. / International Journal of Hospitality Management 63 (2017) 44–52

Table 3 Correlations between latent variables. Variables

Correlation

a. Diffusion of innovations b. Environmental marketing strategy c. Sustainability innovations d. Organizational environment

a.

b.

0.37 0.65** 0.70** 0.72**

0.84 0.92** 0.66**

c.

0.69 0.71**

Mean

SD

4.90 5.15 5.36 4.80

0.70 1.17 0.98 1.27

d.

0.76

All correlation coefficients were significant at the 0.01 level. Average variance extracted (AVE) in parentheses. ** p < 0.01

Relative advantage Compatibility

0.43 0.98

Simplicity

0.68

Diffusion of innovations

Environmental communication

0.47

Trialability

0.17

Visibility

0.13

Sustainability innovations

0.66

0.87

Price 0.87

Distribution

0.92

0.94 0.94

Environmental marketing strategy

Corporate social responsibility

0.65 0.88

Energy conservation

0.91 0.76

Sustainability management Technology innovation

Promotion

Fig. 2. Path diagram.

lations for all of the measuring variables that were used in this study. The full structural model was tested to verify the relationships among the variables (i.e., diffusion of innovations, environmental marketing strategy, and sustainability innovations). Fig. 2 summarizes the overall model fit and relationships among the measured variables. The result of the chi-square (2 ) test for model fit was significant. However, other fit indices should also be considered. The values obtained for the other indices indicated that the model fit the data well (2 = 169.96, CFI = 0.99, GFI = 0.93, SRMR = 0.045, RMSEA = 0.069). The results for the standardized values of the hypothesized path estimates in the integrated model are summarized in Fig. 2. Hypotheses 1 and 2 proposed that innovation diffusion is positively related to environmental marketing strategy and sustainability innovations. Consistent with Hypotheses 1 and 2, innovation diffusion was positively related to environmental marketing strategy (ˇ = 0.66) and sustainability innovations (ˇ = 0.13). Hypothesis 3 predicted a positive relationship between environmental marketing strategy and sustainability innovations, and their interaction was significant (ˇ = 0.87). Thus, Hypothesis 3 was supported. In the mediating effect proposition, Hypothesis 4 proposed that environmental marketing strategy mediates the relationship between innovation diffusion and sustainability innovations. This study found a significantly positive mediating effect of environmental marketing strategy between innovation diffusion and sustainability innovations (ˇ = 0.57). Consequently, Hypothesis 4 was supported. Table 4 summarizes the direct and indirect effects of the research findings. Hypothesis 5 predicted that the organizational environment moderates the relationships among innovation diffusion, environmental marketing strategy, and sustainability innovations. Only the path estimate of the interaction effect between innovation diffusion and the organizational environment on environmental marketing strategy was significant (i.e., H5a). Thus, Hypothesis 5 was partially supported. Table 5 summarizes the moderation analysis of the research findings. That is, the higher score of organizational

Fig. 3. Effects of organizational environment on diffusion of innovations and environmental marketing strategy.

environment will enhance the effect of innovation diffusion on environmental marketing strategy. To better elaborate how the organizational environment interacts with innovation diffusion and environmental marketing strategy, following Aiken and West (1991), this study plotted the interaction relationships, as shown in Fig. 3. The plot in Fig. 3 shows that when the organizational environment was more supportive, innovation diffusion was more positively associated with environmental marketing strategy. The simple slope test confirmed the research findings that the organizational environment is positively and significantly related to environmental marketing strategy for high levels of innovation diffusion. 4.2. Alternative structural model analyses To examine the robustness of findings, the present study also tested two alternative models, as shown in Table 6. In Model 2, this study deleted the path from innovation diffusion to sustainability innovations. Furthermore, in Model 3, this study deleted the path from environmental marketing strategy to sustainability innovations. The results show that the alternative model did not represent a significant improvement over the hypothesized model (i.e., Model 1). Therefore, the present study confirmed the best fit of the original hypothesized model because it was more parsimonious. 5. Discussion This study provides partial support (in addition to H5b and H5c) for a new integrated theoretical model in the context of sustainable hospitality. The results suggested that innovation diffusion was positively related to sustainability innovations and environmental marketing strategy, and environmental marketing strategy was positively related to sustainability innovations. Furthermore, environmental marketing strategy served as mediator in the relationship between innovation diffusion and sustainability innovations. Finally, the organizational environment was shown to enhance the relationship between innovation diffusion and environmental marketing strategy. For the most part, this research extends the understanding of the relationships among innovation diffusion, environmental marketing strategy, sustainability

J.-S. Horng et al. / International Journal of Hospitality Management 63 (2017) 44–52

49

Table 4 Summarize the direct and indirect effects. Paths

Direct effects

Diffusion of innovations → environmental marketing strategy Diffusion of innovations → sustainability innovations Environmental marketing strategy → sustainability innovations Diffusion of innovations → environmental marketing strategy → sustainability innovations

0.66 0.13 0.87

Indirect effects

0.57

Total effects

Hypothesis

Support

0.70

H1 H2 H3 H4

Yes Yes Yes Yes

Table 5 Multi-group analysis. Path

2

df

2

Unlimited pattern Diffusion of innovations → environmental marketing strategy

1415.09 1431.87

208 209

– 16.78***

Path

Diffusion of innovations → environmental marketing strategy

High

Low

Estimates

t-value

Estimates

t-value

0.69

7.31***

0.37

4.67***

“High” and “Low” mean the relative score of organizational environment. *** p < 0.001 Table 6 Assessment of measurement invariance. Invariance

2 (df)

RMSEA

NNFI

CFI

GFI

2 /df

Based original model (M1) Delete path of diffusion of innovations → sustainability innovations (M2) Delete path of environmental marketing strategy → sustainability innovations (M3)

169.96(62) 179.85(63) 481.91(63)

0.069 0.071 0.135

0.98 0.98 0.95

0.99 0.99 0.96

0.93 0.93 0.83

2.74 2.86 7.65

innovations, and the organizational environment in the context of sustainable hospitality. 5.1. Theoretical implications This research has at least two critical implications for the research on hotels’ sustainable innovation. First, this research presents a novel integrated model for predicting the mediating role that environmental marketing strategy plays between the diffusion of innovations and sustainability innovations, whereas previous studies have focused on the relationships among organizational resources, organizational capabilities, environmental marketing, competitive advantage, and business performance (e.g., Leonidou et al., 2013). The relationship between environmental marketing strategy and sustainability innovations is directly confirmed. In addition, environmental marketing strategy is emphasized and positively influenced by innovation diffusion. These results can fill the gap in the present study. Second, in hospitality research, most researchers empirically investigate the direct relationships among innovation diffusion, environmental marketing strategy, and sustainability innovations using a specific hospitality area or case study (e.g., Smerecnik and Andersen, 2011). This study determines the moderating role of the organizational environment between innovation diffusion and environmental marketing strategy. That is, a supportive organizational environment will enhance the relationship between innovation diffusion and environmental marketing strategy. 5.2. Limitations This study does contribute to research on hotels’ sustainable innovation in some aspects, but it is limited in other aspects, which provides directions for further research. First, as an integrated theoretical model for hotels’ sustainable innovation, this study uses data from different cities to provide empirical support for this model. Second, the background used to build the hypotheses is largely based on general hospitality theories and the empirical results of

specific hospitality. With the development of research on hotels’ sustainable innovation, these hypotheses can be constructed in the more specific context of hotels’ sustainable innovation. Thirdly, this study tests the hypothesis with hotel managers based on a sample from Taiwan. Future research should test this model with larger random samples or samples in other contexts, for instance in different countries to generalize the results obtained. Finally, although the moderating effect of the organizational environment among innovation diffusion, environmental marketing strategy and sustainability innovations is not supported fully, the results reveal that there is at least one supported relationship (i.e., H5a) that has not been found between these constructs. 5.3. Practical implications This research has meaningful implications for sustainable hospitality policy makers and managers. First, with the research finding that environmental marketing strategy plays a mediating role between innovation diffusion and sustainability innovations, managers can arrange more innovation diffusion to interact with environmental marketing strategy and provide sufficiently detailed knowledge. This can increase motivation and evaluations of the sustainability innovations. With the effect of innovation diffusion and environmental marketing strategy increasing, sustainability innovations are created. Second, the research finding of the moderating role of the organizational environment between innovation diffusion and environmental marketing strategy provides important information for hospitality planning. Managers should build a supportive organizational environment to meet expectations and desires and then develop environmental marketing strategy (e.g., use environmentally friendly supplies and consumable products, build environmental compliance costs into the service price). Hotel operators should examine the possible drivers behind such essential constructs in the formation of guests’ green purchasing decisions. For example, their marketing focus should be on creating and strengthening the environmentally responsible reputation of their firm through building diverse strategic plans and

50

J.-S. Horng et al. / International Journal of Hospitality Management 63 (2017) 44–52

reputation management (Han and Yoon, 2015). A strong green reputation can be a valuable asset to every hotel business, driving guests’ ecological concerns and business sustainability (Kim and Han, 2010). Good environmental marketing strategy via innovation diffusion or a supportive organizational environment is also expected. In short, this research developed and tested a new integrated theoretical model with moderation. The research results will be helpful for extending sustainable hospitality theory building. 6. Conclusion This study reveals the importance of innovation diffusion (i.e., relative advantage, compatibility, simplicity, trialability, and visibility) in the process of adopting sustainability innovations, supporting studies investigating the diffusion and adoption of environmentally sustainable innovations applied DIT (Chou et al., 2012; Le et al., 2006; Nicholls and Kang, 2012; Smerecnik and Andersen, 2011). It also confirms that supportive environmental marketing strategy and organizational environment create a higher rate of sustainability innovation adoption. The study provides a valuable contribution to the emerging fields of hotel sustainability and the diffusion of sustainability innovations. The professional sample of hotels allows for important insight into current industry trends and a picture of the modern shape of corporate sustainability in hotels.

Hotels must not look solely to customer demand for a reason to adopt sustainability initiatives but rather understand the holistic long-term benefits that pervade all operations. Fortunately, scholars and managers are now realizing that sustainability can bring value to numerous aspects of business performance (Banerjee, 2001; Bansal and Roth, 2000; Dunphy et al., 2003; Esty and Winston, 2009; Freeman et al., 2000; Hoffman, 2007; Molina-Azor´ıın et al., 2009; Shrivastava, 1996; Willard, 2002). It is imperative for hotels to adopt sustainability innovations not only to increase competitive advantage but to reduce society’s overall environmental impact. The hotel industry and the greater corporate sector need to shift their business models to a paradigm that provides a long-term vision for creating value for society while not eroding natural resources. Adopting sustainability innovations can act as a transformational innovation that can dramatically reshape the way hotels and companies provide products and services and contribute to society’s progress toward integrating sustainable lifestyles (Denning, 2005). Acknowledgements The authors would like to thank anonymous reviewers for useful suggestions and the Ministry of Science and Technology of Taiwan for financial support (Grant number: MOST 103-2511-S-228-003MY3). Index. Questions on the questionnaire

Dimensions Items Diffusion of innovations (Hsu et al., 2007; Smerecnik and Andersen, 2011) Will add significant value and market advantage to our resort’s profile and services Relative advantage Will reduce customer satisfaction (reverse coded) Will reduce employee satisfaction, retention and productivity Will reduce employee satisfaction, retention and productivity Will reduce employee satisfaction, retention and productivity Is not well matched to our current procedures (reverse coded) Compatibility Are compatible with our existing employee practices) Require too much technical expertise (reverse coded) Is much too complex to implement at this time Will be a simple and easy process Simplicity Will be easily attainable because of our expansive knowledge about environmental sustainability Will require minimal resources Before deciding to adopt a sustainability innovation, our resort would need to test the adoption on a smaller scale. Trialability Having time to try sustainability innovations would motivate our resort to adopt those innovations. The company will verify sustainable innovations first and then implement them. The produced benefits of promoting sustainable service innovation by the company is evident. Visibility Promoting sustainable service innovation enables customers to feel an obvious difference between companies. We will first observe the industry results and then consider follow-up sustainable service innovation. Environmental marketing strategy (Leonidou et al., 2013) Our hotel uses environmentally friendly supplies and consumable products for our products/services. Product-service Our hotel gives priority to offering ecological products and services. Our hotel is geared to design, develop and offer its product/services in an environmentally friendly way. Our hotel provides its product/services in a way that minimizes its impact on the natural environment. Our hotel tends to build environmental compliance costs into the service price. Price Our hotel takes advantage of any cost savings derived from using environmentally friendly practices to offer better prices. Our hotel takes advantage of the financial success of several environmentally friendly products/services to reduce its prices. Our hotel offers competitive prices to our customers as a result of the environmentally friendly practices implemented Our hotel encourages suppliers/vendors and agents/representatives to embrace and reflect environmental responsibility. Distribution Our hotel shows a preference for suppliers and strategic partners that embrace environmental responsibility. Our hotel is careful when choosing supplies and consumable products to ensure that they are environmentally friendly. Our hotel buys supplies in bulk to reduce packaging where possible (D). We highlight our commitment to environmental preservation in our advertisements, sponsorships and/or campaigns. Promotion Our promotional and communicational efforts highlight and inform our customers about our environmental efforts. Our hotel uses ecological arguments in our advertisements, promotional material and/or marketing campaigns. Sustainability innovations (Salmones et al., 2005; Smerecnik and Andersen, 2011; self-developed) Environmental education of guests Environmental Community environmental support, involvement or advocacy communication Our restaurant/resort carries out dialogue with other resorts in our industry about environmental sustainability. Environmental training of staff Existence of environmental statements in public messages or resort descriptions Routine meetings to discuss environmentally related issues

J.-S. Horng et al. / International Journal of Hospitality Management 63 (2017) 44–52 Resource conservation

Corporate social responsibility

Energy conservation

Culture innovation

Sustainability management

Technology innovation

51

The company pays attention to recycling. The company buys reusable products. The company encourages recycling among guests. The company purchases energy-saving materials and facilities. The company avoids buying equipment or packages containing hazardous substances. The company collects hazardous waste by categories. The company buys products and materials that can reduce the environmental impact. The company purchases from local firms and companies. When organizing activities, the company always abides by the laws and enacted norms. The company treats every customer honestly. The company complies with ethical principles taking precedence over the pursuit of financial performance. The company pursues long-term success. The company respects and protects the natural environment. The company is committed to promoting social well-being. The company purchases equipment with energy-saving/water-saving marks or green-label items. The company uses environmentally friendly building materials. The company uses a ventilated/energy-saving environmental space design. The company smooths the line planning of service space to reduce labor cost. The company uses network marketing to reduce paper use. The company’s transportation fleet utilizes alternatively fueled or hybrid vehicles. The company provides public transportation for guests. The company combines local culture to enhance innovation value. The company sets aside cultural and creative funds each year to promote cultural innovation. The company sees itself as a platform for the exchange of cultural innovation. The company has a special department in charge of cultural and creative proposals. The company is actively involved in community building. The company shows coexistence and co-prosperity with the local culture through service processes and products. Creation of a detailed program to reduce environmental impacts Assessment of greenhouse gas emissions or carbon footprint Written environmental policy Creation of an environmental impact assessment report Sending officials to conferences related to sustainability Adoption of any nationally or internationally recognized sustainability certification programs The company improves operational efficiency through assistive technology (e.g., cloud systems and electronic forms). The company creates different customer experiences through assistive technology in the marketing process. The company creates different customer experiences through assistive technology in the service process.

Organizational environment (Amabile, 1996) Employees are encouraged to promote sustainable service innovation. The company sets KPI indicators to control effectiveness in promoting sustainable service innovation. The company benefits from promoting sustainable service innovation as a reward for staff feedback. Annual performance indicators will evaluate the performance and contribution of sustainable service innovations.

References Aiken, L.S., West, S.G., 1991. Multiple Regression: Testing and Interpreting Interactions. Sage, Newbury Park, CA. Álvarez-Gil, M.J., Burgos-Jiménez, J., Céspedes-Lorente, J.J., 2001. An analysis of environmental management, organizational context and performance of Spanish hotels. Omega 29 (6), 457–471. Amabile, T.M., 1996. Creativity in Context: Update to ‘the Social Psychology of Creativity’. Westview Press, Boulder, CO. Amabile, T.M., 2012. Componential Theory of Creativity. Harvard Business School Working Paper, No. 12-096, April. Anderson, J.C., Gerbing, D.W., 1988. Structural equation modeling in practice: a review and recommended two-step approach. Psychol. Bull. 103 (3), 411. Anderson, J.C., Gerbing, D.W., 1992. Assumptions and comparative strengths of the two-step approach comment on Fornell and Yi. Sociol. Methods Res. 20 (3), 321–333. Andriate, G.S., Fink, A.A., 2008. Managing the change to a sustainable enterprise. In: Wirtenberg, J., Russell, W.G., Lipsky, D. (Eds.), The Sustainable Enterprise Fieldbook: When It All Comes Together. Greenleaf, Sheffield, UK, pp. 118–140. Banerjee, S.B., 2001. Managerial perceptions of corporate environmentalism: interpretations from industry and strategic implications for organizations. J. Manage. Stud. 38 (4), 489–513. Bansal, P., Roth, K., 2000. Why companies go green: a model of ecological responsiveness. Acad. Manage. J. 43 (4), 717–748. Becken, S., Frampton, C., Simmons, D., 2001. Energy consumption patterns in the accommodation sector −the New Zealand case. Ecol. Econ. 39 (3), 371–386. Bergst¨rom, O., Dobers, P., 2000. Organizing sustainable development: from diffusion to translation. Sustain. Dev. 8 (4), 167–179. Berkhout, T., Rowlands, I.H., 2007. The voluntary adoption of green electricity by Ontario-based companies: the importance of organizational values and organizational context. Organ. Environ. 20 (3), 281–302. Bohdanowicz, P., 2005. European hoteliers’ environmental attitudes: greening the business. Cornell Hotel Restaur. Adm. Q. 46 (2), 188–204. Bohdanowicz, P., 2006. Environmental awareness and initiatives in the Polish and Swedish hotel industries: survey results. Int. J. Hosp. Manage. 25 (4), 662–682. Brown, M., 1996. Environmental policy in the hotel sector: green strategy or stratagem? Int. J. Hosp. Manage. 8 (3), 18–23. Buckley, R., 2002. Tourism ecolabels. Ann. Tour. Res. 29 (1), 183–208.

Carmona-Moreno, E., Céspedes-Lorente, E.J., De Burgos-Jiménez, J., 2004. Environmental strategies in Spanish hotels: contextual factors and performance. Serv. Ind. J. 24 (3), 101–130. Chou, C.J., Chen, K.S., Wang, Y.Y., 2012. Green practices in the restaurant industry from an innovation adoption perspective: evidence from Taiwan. Int. J. Hosp. Manage. 31 (3), 703–711. DeCanio, S.J., Dibble, C., Amir-Atefi, K., 2000. The importance of organizational structure for the adoption of innovations. Manage. Sci. 46 (10), 1285–1299. Deng-Westphal, M., Beeton, S., Anderson, A., 2015. The paradox of adopting tourism ecolabels. In: Weaver, D., Hughes, M., Pforr, C. (Eds.), The Practice of Sustainable Tourism: Resolving the Paradox. Routledge, pp. 228–246. Denning, S., 2005. Transformational innovation: a journey by narrative. Strategy Leadersh. 33 (3), 11–16. Dunphy, D., Griffiths, A., Benn, S., 2003. Organizational Change for Corporate Sustainability. Routledge, New York, NY. Edwards, A., 2005. The Sustainability Revolution. New Society, Gabriola Island, BC, Canada. El Dief, M., Font, X., 2010. The determinants of hotel’s marketing managers green marketing behavior. J. Sustain. Tour. 18 (2), 157–174. Epstein, M.J., 1996. Measuring Corporate Environmental Performance: Best Practices for Cost and Managing an Effective Environmental Strategy. Irwin, Chicago, IL. Erdogan, N., Baris, E., 2007. Environmental protection programs and conservation practices of hotels in Ankara, Turkey. Tour. Manage. 28 (2), 604–614. Esty, D.C., Winston, A.S., 2009. Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage. John Wiley, Hoboken, NJ. Foster Jr, S.T., Sampson, S.E., Dunn, S.C., 2000. The impact of customer contact on environmental initiatives for service firms. Int. J. Oper. Prod. Manage. 20 (2), 187–203. Freeman, R.E., Pierce, J., Dodd, R., 2000. Environmentalism and the New Logic of Business: How Firms can Be Profitable and Leave Our Children a Living Planet. University Press, New York, NY: Oxford. Geltz, C., 2008. Painting these towns green: How diffusion of innovation theory brought energy improvements and sustainability to hard-to-serve utility customers and their communities. Int. J. Sustain. Commun. 3, 96–107. Han, H., Yoon, H.J., 2015. Hotel customers’ environmentally responsible behavioral intention: impact of key constructs on decision in green consumerism. Int. J. Hosp. Manage. 45, 22–33.

52

J.-S. Horng et al. / International Journal of Hospitality Management 63 (2017) 44–52

Hawken, P., Lovins, A.B., Lovins, L.H., 1999. Natural Capitalism: Creating the Next Industrial Revolution. Little, Brown, Boston, MA. Higa, K., Sheng, O.R.L., Hu, P.J.-H., Au, G., 1997. Organizational adoption and diffusion of technological innovation: a comparative case study on telemedicine in Hong Kong. IEEE Computer Society: Proceedings of the Thirtieth Annual Hawaii International Conference on System Sciences (Retrieved from http://csdl2computer.org/comp/proceedings/hicss/1997/7734/04/7734040146.pdf). Hitchcock, D., Willard, M., 2006. The Business Guide to Sustainability: Practical Strategies and Tools for Organizations. Earthscan, London. Hoffman, A.J., 2007. Carbon Strategies: How Leading Companies Are Reducing Their Climate Change Footprint. University of Michigan, Ann Arbor, MI. Horng, J., Lee, M., 2005. Tourism and hospitality higher education in Taiwan: past present, and future. J. Teach. Travel Tour. 5, 167–196. Horng, J.-S., Hsu, H., Liu, C.-H., Lin, L., Tsai, C.-Y., 2011. Competency analysis of top managers in the Taiwanese hotel industry. Int. J. Hosp. Manage. 30, 1044–1054. Horng, J.-S., Wang, C.-J., Liu, C.-H., Chou, S.-F., Tsai, C.-Y., 2016. The role of sustainable service innovation in crafting the vision of the hospitality industry. Sustainability 8 (3), 223. Hsu, C.L., Lu, H.P., Hsu, H.H., 2007. Adoption of the mobile internet: an empirical study of multimedia message service (MMS). Omega 35 (6), 715–726. Hudson, S., Miller, G.A., 2005. The responsible marketing of tourism: the case of Canadian mountain holidays. Tour. Manage. 26 (2), 133–142. Johnson, K., Hays, C., Daley, C., 2004. Building capacity and sustainable prevention innovations: a sustainability planning model. Eval. Progr. Plan. 27, 135–149. Kasim, A., 2006. The need for business environmental and social responsibility in the tourism industry. Int. J. Hosp. Tour. Adm. 7 (1), 1–22. Kim, Y., Han, H., 2010. Intention to pay conventional-hotel prices at a green hotel − a modification of the theory of planned behavior. J. Sustain. Tour. 18 (8), 997–1014. L´ıopez-Gamero, M.D., Claver-Cort´ıes, E., Molina-Azor´ıın, J.F., 2008. Complementary resources and capability for an ethical and environmental management: a qual/quan study. J. Bus. Eth. 82 (3), 701–732. LIFE, 2001. Green Flag for Greener Hotels (Retrieved from http://ec.europa.eu/ environment/ecolabel/ecolabelled products/categories/pdf/lifefinalreport.pdf). Le, Y., Hollenhorst, S., Harris, C.C., McLaughlin, W., Shook, S., 2006. Environmental management: a study of Vietnamese hotels. Ann. Tour. Res. 33 (2), 545–567. Leonidou, L.C., Leonidou, C.N., Fotiadis, T.A., Zeriti, A., 2013. Resources and capabilities as drivers of hotel environmental marketing strategy: implications for competitive advantage and performance. Tour. Manage. 35, 94–110.

Lim, W.M., 2016. Creativity and sustainability in hospitality and tourism. Tour. Manage. Perspect. 18, 161–167. McDonough, W., Braungart, M., 2002. Cradle to Cradle: Remaking the Way We Make Things. North Point, New York, NY. Mensah, I., 2006. Environmental management practices among hotels in the greater Accra region. Hosp. Manage. 25 (3), 414–431. Molina-Azor´ıın, J.F., Claver-Cort´ıes, E., Pereira-Moliner, J., Jos´ıe Tar´ıı, J., 2009. Environmental practices and firm performance: an empirical analysis in the Spanish hotel industry. J. Clean. Prod. 17, 516–524. Nicholls, S., Kang, S., 2012. Going green: the adoption of environmental initiatives in Michigan’s lodging sector. J. Sustain. Tour. 20 (7), 953–974. Rodriguez, F.J.G., Cruz, Y.D.M.A., 2007. Relation between social-environmental responsibility and performance in hotel firms. Hosp. Manage. 26 (4), 824–839. Rogers, E.M., 2003. Diffusion of Innovations, 5th ed. Free Press, New York, NY. Salmones, M.G., Crespo, A.H., Bosque, I., 2005. Influence of corporate social responsibility on loyalty and valuation of services. J. Bus. Eth. 61, 369–385. Shrivastava, P., 1996. Greening Business: Profiting the Corporation and the Environment. Thomas Executive, Cincinnati, OH. Smerecnik, K.R., Andersen, P.A., 2011. The diffusion of environmental sustainability innovations in North American hotels and ski resorts. J. Sustain. Tour. 19 (2), 171–196. Tsoutsos, T.D., Stamboulis, Y.A., 2005. The sustainable diffusion of renewable energy technologies as an example of an innovation-focused policy. Technovation 25 (7), 753–761. Tzschentke, N.A., Kirk, D., Lynch, P.A., 2008. Going green: decisional factors in small hospitality operations. Int. J. Hosp. Manage. 27 (1), 126–133. Vasi, I.B., 2006. Organizational environments, framing processes, and the diffusion of the program to address global climate change among local governments in the United States. Sociol. Forum 21 (3), 439–466. Vasi, I.B., 2007. Thinking globally, planning nationally and acting locally: nested organizational fields and the adoption of environmental practices. Soc. Forces 86 (1), 113–136. Wang, C.-J., Tsai, H.-T., Tsai, M.-T., 2014. Linking transformational leadership and employee creativity in the hospitality industry: the influences of creative role identity creative self-efficacy, and job complexity. Tour. Manage. 40, 79–89. Willard, B., 2002. The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line. New Society, Gabriola Island, BC, Canada. Xu, X., Gursoy, D., 2015. Influence of sustainable hospitality supply chain management on customers’ attitudes and behaviors. Int. J. Hosp. Manage. 49, 105–116.