Understanding the relationship between eco-certification and hotel performance: A longitudinal analysis of two comparable hotels

Despite the complexity of implementing environmentally sustainable practices, an increasing number of firms have invested in eco-certification. According to signalling theory, this study examines whether third-party audited eco-certification influences hotel performance by examining behavioural transaction data. This analysis uses two-way fixed-effects panel regression applied to 55,753 booking transactions from 2012 to 2018. Results reveal approximately 43 % higher sales during certified periods, accompanied by higher room prices and longer booking durations. These effects have been independently tested for robustness across various covariates and time windows. Through replacing stated intentions with observed behavior, this study contributes to close the gap between green intentions and behaviours, demonstrates that credible sustainability signals generate durable commercial returns, and provides behaviour-based evidence on how signalling theory operates in credence-based service environments. Managers and policymakers considering the value of voluntary environmental certification schemes can use the findings to make practical decisions. • We used signalling theory to explore the link between eco-certification and hotel performance. • We analysed the data using a two-way fixed-effects panel regression. • Results reveal a 43 % uplift in sales following certification because of higher room prices and longer booking durations. • This study contributes to close the gap between green intentions and behaviours.