The impact of environmental management on business performance: evidence from the hotel industry

Although the topic of environmental sustainability and firm performance is an ongoing debate, existing research studies have not yielded conclusive results yet. This study examines how macro-environmental factors affect the business performance of hotels using panel data with two stage least squares and robustness models for confirmation. The empirical results reveal that macro-environmental factors such as implementing recycling and reducing waste have statistically significant impacts on the hotel industry. Moreover, cities or counties with lower air quality index create a positive environment, leading to tourists being more likely to stay at the hotels there. The managerial implication of this study will provide novel insights to hotel operators and governmental and environmental planners into the development of environmental sustainability, which will in turn benefit the hotel industry and increase the competitiveness of tourist destinations.