UJIAN AKHIR SEMESTER

SEMESTER GENAP 2022/2023

PROGRAM STUDI MAGISTER PARIWISATA BUDAYA DAN KEAGAMAAN
UNIVERSITAS HINDU NEGERI I GUSTI BAGUS SUGRIWA DENPASAR
Name : Made Novita Dwi Lestari
Student ID no : 2224191002
Subject name : Isu-isu Terkini Pariwisata
Lecturer : Prof. Dr. Diena M. Lemy, A.Par., M.M., CHE.

1. Read the assigned article journal:

Measuring the Economic Impact of a Voluntary Sustainable Tourism Certification By:
Amelia Bilbao-Terol 1,* and Celia Bilbao-Terol 2
2. Detail description of the article:
a. Background
One of the most important issues of the tourism industry today is about
Sustainability. There are many undesirable aspects that raised such as: Climate
change, biodiversity habitat loss, coastal expansion, increased water demand,
the use of fossil fuels, and cultural commercialization. Tourism has
environmental and social implications. One of the most important ideas for the
future of tourism management is sustainability (Paunovi'c et al). International
organizations, national and local governments, businesses, and travel
destinations have taken a variety of measures to mitigate these negative effects,
including imposing urban restrictions, capping the growth of hotel beds,
developing cutting-edge energy ancient technology in the industry, and
establishing well-known sustainable tourism certifications.
Environmental, socio-cultural, and economic justice considerations are all
included in sustainable tourism certification schemes. These certificates benefit
travellers, companies, and communities by having a beneficial influence. For
visitors, sustainable certification addresses the information asymmetry they
frequently experience by giving trustworthy information about sustainable
activities. These certificates assist the entire community by increasing
environmental quality and perhaps lowering poverty, especially in rural regions.
From a commercial standpoint, sustainable certification has two key benefits.
For starters, well-designed environmental norms can spur innovation, resulting
in cost savings for products or services. However, the viability of these
environmental improvements is dependent on the economic strategy.
Sustainable business models incorporate stakeholders, the environment, and
society to match the company purpose with sustainability, resulting in a long-
term competitive advantage. Second, by exploiting the recognition associated
with sustainable certification as a marketing advantage, firms may be able to
boost their pricing and/or market share.
 Businesses who actively participate in these certifications, however, must incur
the expenses of compliance and upkeep. They will continue to comply with the
certification only if the cost savings and higher income surpass the investment
necessary for long-term viability. The success of these certification systems as
environmental policy instruments is ultimately determined by this cost-benefit
analysis.
This article assesses the additional price that the hotel market is ready to pay for
the Eco-Management and Audit Scheme (EMAS), a voluntary sustainable
certification. The European Union introduced EMAS in 1993 as a premium
management instrument intended by the European Commission for enterprises
and organizations to analyse, disclose, and improve their environmental
performance. EMAS is available to all enterprises in all economic and service
sectors and may be deployed globally.

b. The main problem

An examination of the profitability of various sorts of certificates is required for
their effective use as environmental policy instruments. Nonetheless, research
on the private economic advantages of these certificates is limited, and most
studies have concentrated on quantifying the rise in price and/or demand
resulting from certification ownership. The current study falls into this category,
leaving future research to investigate the effects of certification on cost savings,
innovation creation, effects on the surrounding environment, and on the broader
community.

c. The purpose of the paper

The paper's goal is to investigate and assess the economic implications of a
voluntary sustainable tourism certification scheme. In other words, the study
seeks to explore how establishing a sustainable tourism certification effort,
which is optional for tourist enterprises or locations, affects the tourism
industry's economic aspects. It aims to quantify and assess the influence of this
certification on several economic variables within the tourist sector, such as
revenue, employment, profitability, and overall economic growth. The results
and analyses may give insights into the economic advantages, downsides, and
overall success of voluntary sustainable tourism certificates.

d. The literature review

There are eight articles that were published in academic peer-reviewed journals.
The authors of these articles include Rivera, Quintiliani, Rigall-I-Torrent et al.,
Medina et al., Marrocu and Paci, Capacci et al., and Cerqua. Additionally, one
article was sourced from a working paper by Bernini and Cerqua. These studies
can be categorized based on several criteria, including the type of certification
examined (pertaining to public places and destinations or specifically hotels),
the variable used to measure the impact of certification (such as tourism flows,
technical efficiency, prices, sales, and economic growth of destinations), the
primary objective of the study (whether it aims to evaluate the certification's
impact or serves as a control variable), the geographical focus, the quantitative
 methodology employed, the correction of self-selection bias, and the resulting
outcomes.

e. The methodology
The major goal of this research is to assess the economic impact of EMAS (Eco-
Management and Audit Scheme) on hotel costs. To do this, it is critical to
establish the certification's market worth. The researchers use the hedonic
pricing model to address this. The propensity score-matching approach is used
before estimating the hedonic model to account for the non-random selection of
certain types of tourism hotels that seek certification.
To reduce the bias caused by self-selection, propensity score matching is used.
To investigate the influence of certification on hotel costs, the same hotels must
be observed with and without EMAS certification. This, however, is not a viable
option. By balancing the characteristics of hotels in the treatment and control
groups, matching approaches give an appropriate solution to this challenge.
These non-parametric techniques are useful for improving causal inferences in
observational investigations.

f. The result and findings

The result shows that the coefficient of sustainable certification is positive but
not significant at the customary level, implying that certification does not
substantially correlate with higher lodging prices. This would explain the
program's low participation rate among enterprises.
The author finds no effect (no statistical significance) of having the Costa Rican
Certification for Sustainable Tourism on hotel rates or occupancy rate.
However, he discovers that hotels with greater levels of environmental
performance can raise their lodging fees. The author indicates that the
ownership of sustainable certification is not significantly associated to higher
pricing; rather, hotels granted with eco-certification must also maintain better
levels of environmental performance. Same as other researchers, Cerqua and
Rivera say that eco-certification of their study has no substantial relationship to
favourable economic effects. Specifically, the author discovers only when
linked with a sustainable strategy does Blue Flag accreditation have a beneficial
effect on domestic tourism flows. Similarly, Rigall-I-Torrent et al. acquire
favourable effects on hotel costs Blue Flag accreditation, when quality and
environmental characteristics of destinations are considered.

g. The conclusions
The tourist sector is presently facing a huge problem in terms of sustainability.
Institutions and social actors are launching a variety of initiatives to encourage
sustainable tourism. One such endeavour entails the implementation of optional
sustainable certificates for lodging businesses. These certifications first
appeared in the mid-1990s with the twin goal of minimizing environmental
harm and giving firms with a competitive edge. Certification is chosen by
lodging operators when the financial benefits surpass the price of getting it. As
 a result, determining the economic impact of this sustainability strategy is
critical.
This study contributes to the area by calculating the price premium that
customers are prepared to pay for EMAS (Eco-Management and Audit
Scheme), a voluntary sustainable certification. The hedonic pricing approach is
used to do this while simultaneously accounting for self-selection bias.
However, our data show that sustainable certification has no substantial
influence on lodging pricing. This implies that firms are unable to recuperate
their certification expenditure through increased pricing, diminishing the
program's usefulness as an environmental policy tool.
The extant literature offers two major explanations for this result. According to
the first argument, simply having a sustainable certification is inadequate to
produce a good economic impact for enterprises. Other steps, in addition to
certification, must be adopted to support the growth of sustainable tourism.
These steps can be implemented by a variety of parties, including the certifying
organization itself, local governments striving to improve the region's
environmental quality, or other groups participating in the tourist business.
Thus, for the policy to be economically beneficial to enterprises while also
serving as an effective environmental policy instrument, a mixture of tactics
known as policy mixes must be used.
The second explanation is concerned with the sort of tourist that the island
draws. It shows that the island's visitors, particularly foreigners, may have a low
level of commitment to sustainability. While studies have revealed that
sustainable certifications such as the Blue Flag have an economic impact on
local travellers, Cerqua discovered that there appears to be little influence on
foreign tourists. Tourists from Anglo-Saxon and German countries may behave
differently toward sustainable tourism inside their own countries than while
traveling to Mediterranean sites. They may value sustainability when traveling
within the country but not necessarily when visiting Mediterranean nations.

3. The implication and the benefits of the article to sustainable Tourism:

First, the paper discusses how the certification program pushes tourist enterprises to
embrace environmentally friendly activities. It establishes certain requirements and
criteria that firms must achieve to be certified. This leads to better environmental
management, conservation activities, and cultural heritage preservation, all of which
benefit the destinations and people involved. Second, about improving reputation and
consumer trust. The certification program establishes a legitimate and well-known
symbol for sustainable tourism. Businesses that earn certification get a competitive
advantage by demonstrating their commitment to environmentally friendly operations.
Third, This article investigates the certification program's economic impact. It implies
that sustainable tourism accreditation might boost economic growth by recruiting eco-
conscious travellers. These visitors are more likely to spend money on local goods,
services, and experiences, which benefits local communities and economies. The
fourth is participation of Stakeholders. The execution of a sustainable tourism
certification program needs participation of many stakeholders. The article underlines
the necessity of collaboration among tourist enterprises, government agencies, local
communities, and non-governmental organizations (NGOs). This cooperation
encourages information exchange, capacity building, and the formation of partnerships
to accomplish sustainable objectives. It also encourages stakeholders to feel a sense of
ownership and responsibility, which leads to long-term commitment and ongoing
development in sustainable practices. The last one is monitoring and evaluation. It
underlines the importance of appropriate monitoring and evaluation methods for
assessing the efficacy and consequences of sustainable tourism efforts. This data-driven
strategy helps policymakers, investors, and other stakeholders identify areas for
development, measure progress, and illustrate the benefit of sustainable tourism.