Environmental certification and hotel market value

To counteract the negative publicity derived from environmental impacts and avoid.potential "greenwashing" accusations, hotels resort to third-party entities to certify their commitment to the environment. The objective of this study is to analyze the effect of environmental certifications on hotels' market value. To fill this gap in the literature, this empirical study detects all announcements of environmental awards ever made by major publicly traded hotels in the United States. The findings show that environmental certification has a positive effect on hotels' market value (reducing the effects of the alluded negative publicity); that this positive effect is higher for first-time awards; and.that a U-shaped effect exists for subsequent awards. Managerial implications for.hotels' engagement in environmental awards are described.