Dr. Soultana Tania Kapiki The EU Ecolabel Dr. Soultana Tania Kapiki

The EU Ecolabel and its implementation in the Greek lodging industry

AIM OF THE PRESENTATION This presentation aims to introduce the EU Ecolabel and examines whether the performance and economic results of the Greek hotels awarded with the EU Ecolabel is worth the investment made by the ownership.

WHAT IS THE EU ECO-LABEL? The European Eco-label is a voluntary scheme, established in 1992 to encourage businesses to market products and services that are friendlier to the environment. Products and services awarded the Eco-label carry the flower logo, allowing consumers to identify them easily. Today the EU Eco-label covers a wide range of products and services, including cleaning products, appliances, paper products, textile, home and garden products, lubricants and services, such as tourism accommodations.

THE EU ECO-LABEL FOR TOURISM ACCOMMODATIONS   The European Eco-label was originally created to reward tourism accommodation services and tourists that respect the environment. In 2004, the European Commission also established criteria for camp sites. Since 2005, camp sites can apply for the European Eco-label.

The study The study was conducted in order to explore whether the Greek hotels awarded with the EU Ecolabel had economic benefits during the period 2008-2010, compared to the industry averages. Information provided by the Greek Ministry of Environment, Energy & Climate Change was used to identify the sample. Currently, there are 6 awarded with the EU Ecolabel establishments in Greece.

Data collection Data were collected by means of an on-line questionnaire sent to the certified hotels, as well as by analyzing balance-sheets published in financial newspapers and calculating several variables.

Hotel name, location and first year of EU Ecolabel award 2003 2007 2008 2009 2012 Sunwing Resort - Rhodes Sunwing Resort – Crete   Eagles Palace Hotel & Spa - Chalkidiki Daphne’s Club Hotel Apartments - Xylokastro Apollonia Beach Resort & Spa Hotel – Crete Beyond Villas - Lefkada

Profile of the sampled hotels Profile of the hotel sample (2008-2010)

Results The table below presents the averages of key indicators of the sampled hotels during 2008-2010 & the respective industry averages for the upper-class Greek hotels. Index % 2008 2009 2010   Sampled hotels Industry average Return on Equity 1,30 -4,69 1,92 -7,09 0,26 -12,39 Return on Capital Employed 2,19 -1,25 2,86 -1,74 1,38 -3,42 Gross Profit Margin 17,6 27,05 14,33 24,03 11,90 18,09 Operating Profit Margin 10,63 -10,19 9,14 -12,29 6,93 -22,1 Net Profit Margin 7,09 -11,03 6,90 -13,06 3,12 -23,4 EBITDA Margin 27,11 20,67 21,55 18,98 20,66 14,57

Indexes Efficiency Profitability Return on Equity= PROFIT BEFORE TAX EQUITY 𝑋100 (Equity=capital, investment) Return on Capital Employed= PROFIT BEFORE TAX LIABILITIES 𝑋100 (Liability=debt) Profitability   Gross Profit = GROSS PROFIT SALES 𝑋100   Operating Profit = OPERATING MARGIN SALES 𝑋100   Net Profit = PROFIT BEFORE TAX SALES 𝑋100  EBITDA = EBITDA SALES 𝑋100 (EBITDA is the total resulting as the sum of Operating margin + Financial costs + Accounted depreciation costs).

Conclusion The research shows that the Greek establishments awarded with the EU Ecolabel have financial benefits in relation to the industry averages. We believe that this advantage is owed to some extent to the fact that the ecological hotels attract more guests who are increasingly sensitive to the environmental protection; they save energy and therefore have lower operating costs; and, they have increased profitability as a result of the aforementioned management practices.

Recommendation Application of the EU Ecolabel (or any other) certification program is highly recommended since it is worth the investment to be made by the hotelier, especially if the hotel has average or large size.