Environmental Economics

RAISING ATTRACTIVENESS OF THE EU ECOLABEL

FOR ROMANIAN HOTELS

Assoc. Prof. Dr. Laura Cismaru1

1
Transilvania University from Brasov, Romania

ABSTRACT
It is already a fact that at present a major source of obtaining competitive advantage is
related to the green development of enterprises. Sustainability is an important element
in the core values of the consumers belonging to the Millennial Generation, which is the
most numerous living generation nowadays. In this context, all projects related to the
implementation of sustainability respect the profile of this new consumer. In 1992, the
European Union Ecolabel has been established for several types of products and
services. At present, the criteria for obtaining the EU Ecolabel for European hotels are
established in the Commission Decision no.175 of 25 January 2017. In the new
generational context, this eco-label started to be more and more attractive in the last ten
years. At present, 34% of the total licences for the EU Ecolabel, which represents the
majority, are from tourist and accommodation services with almost 800 licences
obtained by European hotels and campsites. According to the data included in the EU
Ecolabel Tourist Accommodation Catalogue, more than 400 European hotels
implemented the EU Ecolabel at present. In Romania, only two hotels are using the EU
Ecolabel. In such context, the main aim of this paper is to demonstrate the economic
advantages of the implementation of the EU Ecolabel for Romanian hotels. To that end,
two qualitative research methods have been used: the literature review and the case
study. The analysis starts with the presentation of the generational theory, shaping the
profile of the Millennial consumer. A short SWOT analysis of the Romanian hotel
industry is presented. After introducing the EU Ecolabel, several advantages for
Romanian hotels are presented related to the implementation of the EU Ecolabel in
order to raise the attractiveness of this label for the Romanian hotels industry.
Keywords: EU Ecolabel, Millennial Generation, Romanian hotels
18th International Multidisciplinary Scientific GeoConference SGEM 2018

INTRODUCTION
It is already a fact that at present a major source of obtaining competitive advantage is
related to the green development of enterprises. “Going green” is the new trend in
hospitality and tourism, as it is in many other industries [12]. Several sustainability
schemes and labels have been created in tourism in the last two decades, many of them
for hotels. According to the most recent tourism policy adopted by the European
Commission, the sustainable development is the main source to gain competitive
advantage by European tourism businesses [7]. Europe is the world leader regarding the
sustainable development of tourism and many initiatives of the European Commission
support this strategic position, such as Calypso, the European Destinations of
Excellence, the European Tourism Indicators System for Sustainable Destinations or the
European Union (EU) Ecolabel for accommodation services.
For the new generations of consumers sustainability is an important element within their
core values. The tourists of the new generation value the socially responsible behaviour
of tourist destinations and businesses. In this context, a better understanding of the
profile of this new tourist can be of key importance for hotels worldwide.

THE MILLENNIAL TOURIST

The Generational Theory is the conceptual creation of William Strauss and Neil Howe.
Since 1991, when it was launched, this theory was expanded, tested and validated in
various fields by many researchers worldwide, including its creators. Strauss and Howe
had the initial intention of describing the history of the American society; within this
process, they discovered a pattern of cycles composed of four generational archetypes:
“prophet/idealist”, “nomad/reactive”, “hero/civic” and “artist/adaptive” [11]. A full
generational cycle lasts for about 80-100 years, which means that each generation lasts
for about 20-25 years. According to the Generational Theory, the members of a specific
generational archetype not only share similar ages, they also share important core
values. After one cycle ends, a new cycle composed of the same four generational
archetypes begins. The present generational cycle includes the following generations:
1. The Baby Boomer Generation – it is the present prophet/idealist generation,
composed of people who were born between 1940 and 1960.
2. The Generation X – it is the present nomad/reactive generation, composed of
people who were born between 1960 and 1980.
3. The Millennial Generation – it is the present hero/civic generation, composed of
people who were born between 1980 and 2005.
4. The Homeland Generation – it is the present artist/adaptive generation,
composed of people who were/are born after 2005.
Even if the theory was initially created to explain the generations in the United States of
America, Strauss and Howe, as well as numerous researchers, described similar
generational cycles in other societies, mainly in developed countries. Research has also
been conducted in developing countries and it demonstrated that there is a generational
delay in this type of societies [2]. It means that a specific generation which is active in a
developed country will become active in a developing society after several years, but it
will have a similar profile and the same core values.
 Environmental Economics

In the last decade, focus has been put on the Millennial Generation due to the
phenomena called “the generational gap” which separated this generation from the elder
ones. Once the Millennials entered the work field, becoming active employees, they
started causing major problems in society. Therefore, they are maybe the most studied
members of a generational archetype. In this context, profiling the Millennial consumers
started to be an important issue in many sectors of an economy, tourism being included.
Summarizing the research findings, we can note that the Millennial tourists share the
following core values [1], [2], [3], [4]:
1. The life/work balance is vital for them, therefore they value their spare time and they
make best use of it through multiple short vacations.
2. They embrace diversity, tolerance and multiculturalism and therefore they like to try
new, colourful and multicultural tourist experiences.
3. They are the first “digital natives”, which means they communicate through
technology and they need technology to communicate. Therefore, modern technology is
a must within the tourist experience they consume.
4. They are maybe the most disloyal generation due to the several aspects such as the
fact that they assimilate information very quickly, they have access to all kind of
information through the Internet, they have significant multitasking skills. From the
tourism perspective, it means that marketing and most of all innovation and creativity
are important assets for the providers of tourist products.
5. Related to the previous trait, research also proved that the Millennials are very
attached to and affected by fashion and trends. In tourism, this can be translated into an
imperative of offering trendy products. In this context, we can notice that they are true
fans of all forms of sustainable behaviour, because sustainability has become an
important trend in the present society. Also, brands, logos and labels are very important
to Millennials.
6. They are a “hero” generation which also means that they will change the world, in a
way or another. In this context, the resources sharing, which is their creation, might be a
good example of how the Millennials impacted the economy worldwide, tourism being
included. Some of the most successful sharing economy projects are in tourism, such as
Airbnb or BlaBlaCar.
7. They like to “share” their life with their friends, mostly using Internet. In tourism,
this means that providing them quality tourist experiences is a must for tourism
organizations and destinations. They will share their experiences with friends and they
will become brand ambassadors. Also, the image of a tourism organization or
destination can be destroyed or increased in a very short period.
From the seven core traits presented above, we can formulate an important conclusion,
of great importance for all tourism products providers: the eco-friendly tourism products
are a true source of obtaining competitive advantage within the new generational
context. The Millennials are the most numerous generation within the present
generational cycle [10]. They are also a hero generation which is changing the
consumption patterns. As mentioned above, sustainability is a trend at present and
therefore the Millennial tourists are very attached to all forms of sustainable behaviour,
in tourism business as well. They are responsible tourists and they expect to be offered
18th International Multidisciplinary Scientific GeoConference SGEM 2018

sustainable tourism products [2], [3], [4]. Sustainability is the trendy way in tourism, as
it is in their private life – the life they share with all their friends. As it has recently been
mentioned [4], the Millennials have a very “active” relationship with sustainability: they
enjoy putting it into practice, they like to live their lives in a responsible way.
In the context presented above, the present paper supports the idea that the green
development of tourism enterprises can be a major source of competitive advantage.
Many eco-labels have been developed in tourism during the last two decades, some of
the most important labels being created in Europe. Implementing such eco-labels can
offer great competitive advantage to hotels which are targeting the numerous Millennial
generation.
THE SWOT ANALYSIS OF THE ROMANIAN HOTEL INDUSTRY IN THE
NEW GENERATIONAL CONTEXT
Many European countries understood the key importance of “going green” in this new
generational context, with the Millennial consumers being so attached to the responsible
behavior of both people and organizations. In Romania, recent research demonstrated
that there can be identified a generational delay due to the economic development status
of this country [2]. The Millennials have just started to enter the workforce these years,
which means that there is a delay of almost ten years in this society. Therefore, the
“generational gap” has just started to affect the Romanian society for a few years.
Tourism industry is a sector of vital importance in the Romanian economy. In the most
recent Travel&Tourism Competitiveness Report published by the World Economic
Forum for the year 2017, Romania ranks the 68th in the world [12]. Most of the other
European countries rank much better positions than Romania.
In the new generational context, with the Millennilas rising, this chapter presents a short
SWOT analysis of the Romanian hotel industry, in order to identify a strategic approach
for the near future in order to properly address the new Millennial tourists.
Main strengths of the Romanian Hotel industry
- The existence of several national programmes which support the development of
tourism in low seasons (such as “Seaside for everyone”, “The spa decade”, “A mountain
vacation” etc.).
- Within the 2017 World Economic Forum Travel and Tourism Competitiveness Report,
Romania has been recently ranked the 10th out of 136 countries for its “Hotel price
Index” [12].
Main weaknesses of the Romanian Hotel industry
- The Romanian legislation related to the hotel classification is very complicated and
impenetrable.
- Romania has been recently ranked the 129th out of 136 countries for its “Quality of
tourism infrastructure” within the 2017 World Economic Forum Travel and Tourism
Competitiveness Report [12], which means that the perceived quality of tourism
services is very low.
- The existence of many old hotels in most of the Romanian resorts.
- The technology readiness level in most of the Romanian hotels is very low.
 Environmental Economics

- The average wage in hospitality is very low in Romanian hotels.

- Few Romanian hotels are concerned about sustainable development issues.
Main opportunities for the Romanian Hotel industry
- The success of the Stars in Europe project which created a unique and simplified
European system for hotel classification.
- The EU Ecolabel for tourist accommodation services, which has small fees for
implementation.
- Romania has been recently ranked the 35th out of 136 countries for its “country brand
strategy” within the 2017 World Economic Forum Travel & Tourism Competitiveness
Report[12]. In the Country Brand Index 2015, Romania’s brand “Explore the
Carpathian Garden” has gained 30 positions since 2010, being ranked the 62nd country
brand [9].
- The Millennial generation, which is very numerous, is the most studied generation in
history, therefore a very detailed profile of the Millennial consumer is available for the
developing countries like Romania is.
Main threats for the Romanian Hotel industry
- Within the 2017 World Economic Forum Travel and Tourism Competitiveness Report,
Romania has been recently ranked the 130th out of 136 countries for its “Sustainability
of travel and tourism industry development”, the 130th out of 136 countries for its
“Sustainability of travel and tourism industry development”, the 129th out of 136
countries for its “Quality of roads”, the 129th out of 136 countries for its “Effectiveness
of marketing and branding to attract tourists” [12].
- The Millennial employees are disloyal and it is very hard to retain them.
- The Millennial and the Homeland Generations are very attached to a responsible
lifestyle. Sustainable development of businesses is valued by the members of these
generations [2], [4].
- The new generations of “digital natives” need up-to-date technology in hotels during
their vacations and therefore, higher technology readiness levels are a must in
hospitality and tourism.
The main strategic approach for Romanian hotels, based on the SWOT analysis
presented above, will be WO-type, grouping the 7th weakness with the 2nd and the 4th
opportunities. In order to attract the numerous Millennial generation, Romanian hotels
should show active concern about their sustainable development through the
implementation of the EU Ecolabel or other available eco-labels within the European
tourism sector.

ADVANTAGES OF THE EU ECOLABEL FOR ROMANIAN HOTELS

The EU Ecolable is a voluntary scheme which recognizes the performances of products
and services that respect the environment. It was created by the European Commission
in 1992 with the main aim to encourage the environmentally friendly behaviour of
European businesses and to offer the consumers the possibility to choose green products
18th International Multidisciplinary Scientific GeoConference SGEM 2018

and services. At present, the EU Ecolabel covers different groups of products and
services, from major areas of manufacturing to tourist accommodation. Criteria are
established for each group of products or services and revised periodically. The EU
Ecolabel became more and more popular in the last decade, with more than 2000
licences awarded in 2017 for more than 50000 products and services available on the
European market. Recent statistics show that the EU Ecolabel is the most popular for
the tourist accommodation services, with a percentage of 37% of the total number of
licences awarded in Europe. Almost 800 EU Ecolabel licences have been awarded in
2017 to tourist accommodation services in more than 20 European states [6].

Figure number 1: Number and percentage of Ecolabel licences per product/service

group (2017) [6]
The criteria to obtain the European Ecolabel for hotels are described at present within
the Commission Decision number 175 of 25 January 2017 on establishing EU Ecolabel
criteria for tourist accommodation [5]. These rules are valid until 22 January 2022,
when a new, improved decision will be adopted. Due to the fact that the criteria are
included within a Decision, it means that they are exactly the same for all hotels in the
European Union. According to the EU Ecolabel Tourist Accommodation Catalogue,
about 400 hotels have implemented the label in 2017 [8]. Unfortunately, in Romania
there are only two hotels which obtained the EU Ecolabel [8].
 Environmental Economics

Figure number 2: Number of European hotels which have implemented the EU Ecolabel
per country (2017) [8]
In Romania, the Ministry of Environment is responsible for increasing the attractiveness
of the EU Ecolabel for Romanian businesses, hotels being included. More than 20 years
after the launch of this label, most of the Romanian hotels are not aware of its existence.
In order to test this hypothesis, the students from Transilvania University from Brasov
conducted a short research project in 2018. They analysed 30 hotels in Brasov, one of
the most famous tourist destinations in Romania, in order to establish whether the
criteria for obtaining the EU Ecolabel were met. They discovered that only two hotels
were aware of this European scheme, but their owners did not find it attractive for their
businesses. The situation is the same in the entire country due to la lack of targeted
promotional campaigns.
Due to the fact that the generational shift has a significant delay in Romania, most
hotels are not aware of the great importance of the Millennials. This paper strongly
supports the idea that promotional campaigns of the EU Ecolabel should focus on the
advantages offered to Romanian hotels from this point of view – of becoming more
attractive for the most numerous generation of consumers – the Millennials. By
implementing the EU Ecolabel, Romanian hotels can improve the quality of the services
they offer to these consumers, because they assimilate quality with the responsible use
of resources. The EU Ecolabel can make hotels more visible, more trustable and,
therefore more attractive to the Millennial tourists. In the developed countries, the
Millennials have already been an active cohort for more than ten years. Romanian hotels
offer their services to foreign tourists as well. In such context, by implementing the EU
Ecolabel, Romanian hotels can become more attractive to the foreign tourists from the
Millennial generation.

CONCLUSION
When the Millennial cohort started to enter the workforce, significant problems arose,
most of them being related to the profile of this generation, which is very different from
18th International Multidisciplinary Scientific GeoConference SGEM 2018

the profiles of the former generations. The fact that the Millennials are the most
numerous generation of the present generational cycle and the problems they generated
in the society determined an impressive number of researchers to study them. As
consumers, they are very disloyal and affected by trends. Sustainability being an
important trend at present, the Millennials highly value the environmentally friendly
behavior of businesses, hotels being included.
In such generational context, the present paper supports the importance of implementing
the EU Ecolabel for making the Romanian hotels more attractive to the Millennial
Romanian and foreign tourists. Obtaining this label is not very difficult for many hotels
in Romania. The problem is related to the fact that the owners are not aware of the
importance of “going green”. At present, only two Romanian hotels implemented the
EU Ecolabel. The main idea of this paper is to highlight the importance of raising the
attractiveness of the EU Ecolabel for Romanian hotels, as an important source of
obtaining competitive advantage in the new generational framework.
A direction for future research is related to analyzing how the socially responsible
behavior of hotels can also contribute to the improvement of the relationship they have
with the disloyal Millennial employees. The fact that Millennial employees can hardly
be retained in hotels more and more affects the Romanian hospitality industry.

ACKNOWLEDGEMENTS

This publication has been produced with the financial assistance of Transilvania
University from Brasov through the “Transilvania University International Research
Scholarship”, awarded in 2016 to the author of the present paper.

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 Environmental Economics

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S O
- the existence of several national programmes which support - the EU Ecolabel for tourist acco
the development of tourism in low seasons; has small fees for implementatio
- the Millennial generation, whi
- Romania has been recently ranked the 10th out of 136
most studied generation in
countries for its “Hotel price Index”.
detailed profile of the Millennia
the developing countries like Rom

W T
- the technology readiness level in most of the Romanian - the Millennial employees are d
hotels is very low; retain them;
- the average wage in hospitality is very low in Romanian
- the new generations of “digit
hotels;
technology in hotels during the
- few Romanian hotels are concerned about sustainable
higher technology readiness leve
development issues.
and tourism