In the 21st century, sustainability has become one of the most important goals for the global hospitality industry. Hotels and resorts all over the world are going green because more people are aware of climate change, resource depletion, and the need for businesses to be environmentally friendly. These programs usually include ways to save energy, systems for conserving water, programs to cut down on waste, eco-friendly amenities, ways to get food and materials in a way that is good for the environment, and certification programs like LEED or Green Key. Hotels and restaurants often promote these practices as part of their corporate social responsibility (CSR) agenda. They also use them to attract eco-conscious travelers who prefer "green" places to stay.

Sustainability is more than just following the rules for businesses. It's also a way to stay competitive in a market where customers care about taking care of the environment. To stand out from the competition, improve their brand image, and meet the needs of millennials and Gen Z travelers, who are especially concerned about environmental issues, hotels are increasingly promoting their eco-friendly identity. Sustainability efforts are often seen as a way to lower operational costs in the long run, such as by using less energy or making less waste.

But even though their goals are good and they seem to have benefits, sustainability initiatives can sometimes have bad effects that weren't planned. Guests may find it inconvenient or not enough to limit air conditioning or heating for energy efficiency, replace traditional amenities with reusable ones, or impose stricter rules for separating waste. Locally sourced or organic food, on the other hand, is good for the environment, but it might make the menu less interesting or cost more. These trade-offs can make customers unhappy because they might feel like their comfort or service expectations are being sacrificed for the sake of sustainability. Employees may also have to do more work or feel more stressed when green policies are put in place, which can make it harder to provide services. So, instead of adding value, sustainability efforts may actually lead to something called value co-destruction.

Problem Statement

Sustainability initiatives have historically been positioned by the hospitality sector as instruments for creating value, benefiting clients, staff, companies, and the environment in equal measure. But research is showing more and more that these programs can sometimes make service worse and hurt the customer experience. Guests may see eco-friendly practices as a loss of comfort, luxury, or convenience, and employees may have a hard time with the extra work that comes with enforcing sustainability rules. This unintended result is called value co-destruction, which happens when interactions between stakeholders lead to worse outcomes instead of better ones.

In the hospitality industry, where excellent customer service and satisfaction are extremely important, this type of co-destruction is a major issue. If green practices are not carefully aligned with what customers want, they could hurt the brand's reputation, make customers less loyal, and make the company less competitive. Consequently, it is imperative to investigate how sustainability initiatives induce value co-destruction, pinpoint the particular practices that elicit dissatisfaction, and comprehend how diverse stakeholders perceive and react to these unintended consequences.

Research Significance

This research holds both academic and practical importance. From an academic standpoint, it enhances the expanding corpus of knowledge regarding sustainability in services and broadens the notion of value co-destruction within the context of Service-Dominant Logic (SDL). A lot of the writing on sustainability in hospitality focuses on good things, like happier guests, a better brand image, or lower costs. This study offers a more nuanced perspective on sustainability by examining the "dark side of green," illustrating how well-intentioned practices may yield adverse consequences.

The study provides useful information for hospitality managers and decision-makers in a practical way. Hotels can change or improve their strategies to get both environmental benefits and great guest experiences if they know what unintended effects sustainability initiatives can have. The results can help managers figure out what to give up, how guests will react, and what steps to take to make sure guests are happy. The research ultimately offers direction for achieving a more effective equilibrium between sustainability and customer experience, guaranteeing that environmentally friendly practices augment rather than diminish value.

Sustainability in Hospitality

Sustainability has become more important to the hospitality industry as both a way to run a business and a way to stand out in marketing. Eco-certifications (like LEED, Green Key, and EarthCheck) are now common ways to show that a business is following sustainable practices from the outside. However, the reasons for getting certified are still mixed. Research shows that certifications can improve a hotel's reputation and sometimes lower costs (by saving energy, cutting down on waste, and saving water), but many hotels don't want to do them because they don't see how the costs and work will lead to more value for guests or more profits for the company (The Role of Environmental Certification in the Hospitality Industry, 2022). Numerous studies have highlighted local sourcing and waste reduction; for example, Mathur, Khanna, and Saxena (2017) investigated five-star hotels in Delhi and discovered that while guests were aware of sustainability practices, many were not entirely satisfied with the current implementations, as they did not align with their comfort or expectations.

Some empirical studies have demonstrated that environmental sustainability directly impacts customer experience and satisfaction (e.g., the MDPI “Environmental Sustainability and the Hospitality Customer Experience” study, 2019). In that study, customers' views on environmentally friendly practices in tourist accommodations were linked to their experience and indirectly to their satisfaction. This shows that real, visible green practices are more important than symbolic ones. Other studies (e.g., “Assessing Green Practices on Eco-Friendly Hotel Customer Loyalty” in Sustainability) show that green practices (like managing energy and natural resources, recycling, and providing green amenities) with high service quality make customers happy, want to come back, are willing to pay, and tell others about their good experiences.

Value Creation vs. Value Co-Destruction: Theoretical Framework

The service-dominant logic (S-D Logic) framework (Vargo & Lusch, 2004, 2008) has offered a valuable perspective for comprehending value creation in services: value is collaboratively generated by various stakeholders (service providers, customers) through resource integration and reciprocal advantage. More recent literature has started to look at value co-destruction, which is when interactions or practices lead to bad results for at least one actor because resources or expectations are used incorrectly or not aligned (Plé & Chumpitaz Cáceres, 2010; Lumivalo, Tuunanen, & Salo, 2024).

Smith (2013) utilized Conservation of Resources (COR) theory to investigate how the mismanagement or insufficient integration of customer resources (time, comfort, expectations) can result in value loss, manifesting not only as unmet expectations but also as tangible negative psychological or emotional consequences. Plé and Chumpitaz Cáceres (2010) postulate that the misuse of interactional resources can result in co-destruction when service systems do not meet customer expectations.

The Dark Side of Sustainability: Examples of Guest Dissatisfaction

Several studies draw attention to the negative aspects of green initiatives, such as how attempts at sustainability may cause discomfort, perceived value loss, or guest dissatisfaction. Mathur et al. (2017) surveyed five-star hotels in Delhi and found that while guests generally liked sustainability practices, many felt that these practices were either tokenistic or not enough to meet their comfort needs.

Another study, “Guest Service Experience in Eco-Centric Hotels: A Content Analysis” (Emerald), found that eco-certification and visible green practices make a good impression, but there is often a mismatch between what hotels promise and what guests expect in terms of amenities, room comfort, cleanliness, and service quality. Guests expect the same level of luxury or basic comfort even when sustainability measures change or get rid of some services, like less use of HVAC or policies that require guests to reuse towels.

Also, the trade-offs in cost are made clear: green features can sometimes mean higher prices, which guests may not always think are worth it. The research on "Evaluating Green Practices on Eco-Friendly Hotel Customer Loyalty" demonstrates that guests are willing to pay only when perceived value, service quality, and environmental awareness are elevated; otherwise, these practices may be counterproductive.

Gaps in the Literature

Despite growing interest, there are several key gaps:

1. Empirical evidence on negative outcomes is limited - A significant portion of the literature remains theoretical (e.g., Plé & Chumpitaz Cáceres, 2010; Lumivalo et al., 2024) or concentrates on positive or neutral relationships (satisfaction, loyalty, willingness to pay), rather than methodically examining value co-destruction in hospitality contexts.
2. Unclear boundaries of co-destruction triggers - There is not much research on which sustainability practices (like saving energy, cutting back on amenities, stricter rules, etc.) make guests unhappy the most, or what specific parts of those practices guests don't like.
3. Stakeholder perspectives underexplored - There is a lack of studies that examine the perspectives of hotel staff and management regarding operational challenges, trade-offs, and limitations in the implementation of green initiatives, despite the existing research on guest perceptions.
4. Cultural, regional, and market context variation underrepresented - Most of the work comes from certain areas, like Western countries or tourist spots. There is less work from developing countries or emerging markets, where guest expectations and resource limits may be different.
5. Longitudinal and process-oriented studies lacking - There is limited information on the evolution of perceptions or value co-destruction over time, particularly as sustainability initiatives develop or guest expectations change.

Conceptual Framework

Objectives of the Study

The primary objective of the study is:

1. To examine the relationship between sustainability initiatives and value co-destruction in the hospitality industry.
2. To identify specific sustainability practices that lead to customer dissatisfaction or service failure.
3. To propose strategies that can balance sustainability goals with customer satisfaction and service quality.

This study employs a mixed-method research design, integrating quantitative and qualitative methodologies to analyze the effects of green initiatives within the hospitality sector. The quantitative aspect entails organized surveys of hotel patrons to evaluate their perceptions, satisfaction, and behavioral intentions concerning environmentally sustainable practices, including energy conservation, water preservation, and waste management. Statistical methods like regression analysis and Exploratory Factor Analysis (EFA) will find the most important things that affect guest satisfaction and loyalty. The qualitative part consists of semi-structured interviews with hotel managers and staff, as well as case studies of eco-hotels that have had notable successes or guest complaints. Interviews look into how managers feel about putting sustainability into practice, the problems that come up in running a business, and how to balance being environmentally responsible with making guests happy. Case studies give us a better understanding of best practices and new ideas. Thematic analysis will find patterns and insights that keep coming up about sustainability practices, staff engagement, and how guests respond. The sampling strategy focuses on hotels that have well-known sustainability certifications (like LEED or Green Key) and guests who have recently stayed at these eco-friendly hotels. Employees and managers are chosen on purpose based on how involved they are in sustainability operations. This design combines surveys, interviews, and case studies to get both measurable results and deep contextual insights. This makes sure that the findings on how well green initiatives work in hotels are strong and useful.

Scope of the Study

This study investigates the correlation between sustainability initiatives and value co-destruction in the hospitality sector, particularly among eco-certified hotels and resorts in Chennai, Tamil Nadu. The study employs both quantitative and qualitative analyses to assess the impact of green practices—such as energy conservation, waste management, and eco-friendly amenities—on guest satisfaction, service quality, and operational efficiency. The study attempts to identify sustainability practices that either enhance or diminish perceived value by collecting data from guests, managers, and staff at selected hotels in Chennai, offering actionable insights for reconciling environmental objectives with exceptional guest experiences.

Data Analysis and Interpretation

The findings of Table 1 show that people who answered the survey had a positive view of sustainability initiatives, with a high overall mean of 4.62 (SD = 0.657). The item SI2 had the most agreement (M = 4.86, SD = 0.448), while the item SI3 had a little less agreement and more variation (M = 4.32, SD = 0.884). The mediating variable also had a relatively high score (M = 5.34, SD = 1.391), but the responses were more spread out, especially for MV3 (SD = 1.46), which shows that respondents had different ideas about what it meant. Conversely, value outcomes were regarded less positively, yielding an overall mean of 2.83 (SD = 0.712), indicating a possible disparity between sustainability initiatives and their perceived effects. Overall, the results show strong support for sustainability initiatives, moderate variability in mediating factors, and lower perceptions of value outcomes.

Table – 1 : Mean and Standard deviation of Construct items

Source: Analysis using Amos

Table 2 summarizes the exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) results show that all constructs have strong factor loadings and construct validity. Items from Sustainability Initiatives (SI) loaded heavily on Factor 1 (0.702–0.748), with communalities between 0.555 and 0.714 and CFA loadings between 0.729 and 0.759. This shows that the convergent validity is good. The items for the Mediating Variable (MV) loaded heavily on Factor 2 (0.797–0.817), with communalities of 0.735–0.764 and CFA loadings of 0.885–0.893, showing that they were very consistent with each other. The Value Outcomes (VO) items loaded sufficiently on Factor 3 (0.634–0.706), with communalities ranging from 0.571 to 0.788 and CFA loadings between 0.712 and 0.775, thereby affirming acceptable construct validity. The results overall support the measurement model's reliability and validity, showing that the items accurately represent their constructs.

Table – 2 : EFA and CFA results

Source: Calculation by using Amos

Table 3 interprets the analysis of reliability and validity shows that all constructs have good to very good internal consistency and convergent validity. The values of Cronbach's alpha range from 0.753 to 0.869, which shows that the results are reliable. The values for composite reliability (CR) are higher than the suggested cutoff of 0.7 (0.837–0.920), which shows that the construct is very reliable. The average variance extracted (AVE) values for all constructs (0.509–0.792) are above 0.5, which means that convergent validity is good. The measurement model exhibits strong reliability and validity, thereby endorsing the application of these constructs in future analyses.

Source: Data calculation using Amos

Table 4 shows the Fornell–Larcker validation criterion and HTMT results show that the constructs have enough discriminant validity. The square roots of AVE (SI = 0.813, MV = 0.99, VO = 0.812) in the Fornell–Larcker matrix are higher than the inter-construct correlations. This shows that each construct is more closely related to its own measures than to others. In the same way, the HTMT values (0.476–0.609) are all below the 0.85 threshold, which further supports discriminant validity. These findings validate that the constructs—Sustainability Initiatives, Mediating Variables, and Valued Outcomes—are conceptually unique and consistently assessed.

Source: Data calculation using Amos

Table 6 of the mediating analysis shows that Mediating Variables (MV) only partially mediates the relationship between Sustainability Initiatives (SI) and Valued Outcomes (VO). The indirect effect is positive and statistically significant (β = 0.066, t = 3.731, p = 0.003), with a confidence interval that does not include zero (CI: 0.013–0.019), supporting H2a. This shows that SI has a direct effect on VO and an indirect effect on VO through MV. This shows how important MV is as a mediator in the model.

Summary of Findings

The study shows that respondents have a positive view of Sustainability Initiatives (SI) (M = 4.62) but a lower view of Valued Outcomes (VO) (M = 2.83). This shows that there is a gap between the initiatives and how they are perceived to have an effect. The measurement model shows that it is very reliable and valid. Cronbach's alpha (0.753–0.869), composite reliability (0.837–0.920), and AVE (0.509–0.792) all meet the recommended levels. The Fornell–Larcker criterion and HTMT values confirm that discriminant validity is present.

Structural analysis indicates that SI has a significant impact on both Mediating Variables (MV) (β = 0.181) and VO (β = 0.244), while MV also exerts a significant influence on VO (β = 0.484). Mediating analysis shows that MV partially mediates the effect of SI on VO (β = 0.066).

The findings indicate that sustainability initiatives positively influence value outcomes, both directly and indirectly via mediating variables, underscoring the significance of supportive mechanisms to augment perceived value.

Practical Implications and Suggestions

• Enhance Guest Awareness of Sustainability Initiatives: Since guests have a positive view of sustainability initiatives, hotels should make sure that guests know about these practices so that their efforts are seen as valuable.
• Strengthen Mediating Factors: Because mediating variables have a big effect on value outcomes, hotels should work on making their staff more engaged, their service better, and their operational processes better to make sustainability initiatives more effective.
• Monitor and Respond to Guest Feedback: Regularly checking guest perceptions can help you find areas where sustainability practices aren't fully appreciated, so you can make targeted improvements to increase perceived value.
• Prioritize High-Impact Sustainability Practices: Energy conservation, eco-friendly amenities, and buying things from local businesses should all be given more attention because they are more likely to affect value creation.
• Adopt Continuous Improvement Strategies: Hotels should improve their sustainability efforts based on guest feedback and performance metrics to make sure they get real benefits and lower the risk of value co-destruction.

This study investigated the influence of sustainability initiatives on value outcomes within the hospitality sector, taking into account the mediating effects of operational and service-related factors. The results show that respondents have a positive view of sustainability initiatives. This shows that eco-friendly practices are becoming more important for improving an organization's image and guest satisfaction. Descriptive statistics indicated a strong consensus on initiatives like energy-saving measures and eco-friendly amenities, whereas perceptions of value outcomes were notably lower, implying a disconnect between implemented initiatives and the benefits acknowledged by guests. The analysis of the measurement model showed that the constructs were reliable and valid, with good internal consistency, convergent validity, and discriminant validity. Structural modeling further illustrated that sustainability initiatives exert a substantial impact on both mediating variables and value outcomes, whereas mediating factors partially convey the influence of initiatives on value outcomes.

These results show how important it is to improve mediating mechanisms like staff engagement, service quality, and operational efficiency in order to get the most out of sustainability initiatives. Hotels should also focus on high-impact practices, make sure that guests know about their programs, and keep an eye on feedback to improve their plans. By combining sustainability efforts with helpful operational practices, hospitality businesses can increase perceived value, lower the risk of value co-destruction, and gain a long-term competitive edge while encouraging environmental and social responsibility.

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