Reversing the Green Backlash: Why Large Hospitality Companies Should Welcome Credibly Green Competitors

Giebelhausen, Michael; Chun, HaeEun H.

Reversing the Green Backlash: Why Large Hospitality Companies Should Welcome Credibly Green Competitors

Abstract

This report presents three studies suggesting that when a large restaurant or hotel company announces the adoption of green practice consumers may react in contrary fashion and decrease their evaluation of that company. First, an in-depth interview project among students at the School of Hotel Administration suggests that individuals are deeply skeptical when large corporations and chains promote their sustainability initiatives, as compared to small independent operators. Seeking circumstances in which a large company could gain sustainability credibility, two follow-up experiments further examine the interaction of a restaurant chain’s green practice adoption and the presence or absence of a small, highly credible competitor. The results indicate that, in the absence of a credible competitor, consumers’ liking of a large hospitality company may actually decrease when the company announces the adoption of a green practice (e.g., organic or locally sourced ingredients). Ironically, then, in markets where there is no credibly green competitor, large corporations may be better off not promoting their sustainability initiatives. The opposite is true, however, when consumers are aware of credible independent firms involved in green practices. Under these circumstances, evaluations of a large company are improved. Initially we hypothesized that the large company would need to imitate the competitor’s program to reverse the green backlash effect. However, the results of a survey of a nationwide panel of consumers suggests that a reversal of the green backlash can occur even if the large company is engaged in a different green activity. The key mechanism was credibility or trustworthiness of the company with regard to the green practice.

Date Issued

2011-08-01

Keywords

hotels; restaurants; green practice; sustainability initiatives; competition

Rights

Required Publisher Statement: © Cornell University. This report may not be reproduced or distributed without the express permission of the publisher

Types

article