Center for Hospitality Research

Hospitality Leadership Through Learning
Center for Hospitality Research

The Impact of LEED Certification on Hotel Performance

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Vol 14 No 15
By: Matthew Walsman, Rohit Verma Ph.D., and Suresh Muthulingam Ph.D.

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Executive Summary:

The LEED certification standard for green buildings has gained considerable acceptance since its launch in 2000. However the question as to whether LEED certification provides business benefits has remained largely unanswered, particularly for the hotel industry. On the one hand, many scholars and practitioners claim that organizations pursing LEED certification realize costs savings and increase revenues. On the other hand several scholars have returned results that are inconclusive. This study contributes evidence to this debate by calculating a differential revenue for LEED certified hotels, compared to those that are not certified. This comparison of the performance 93 LEED-certified hotels (representing the population of such hotels in 2012) to that of 514 comparable competitors finds that the certified hotels obtained superior financial performance as compared to their non-certified competitors, for at least the first two years after certification. Unfortunately, most hotels’ certification is so recent that there is insufficient data at this time to gauge whether the revenue advantage continues after two years.

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