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• El Deeb, M.S., and Halim, Y.T., (2020), "Using
Ecological Footprint Accounting model as a
tool for sustainable development in the
hospitality industry: Evidence from Egypt",
Accounting thought Journal, Ain-Shams University,
Faculty of Commerce, Volume No.24, Issue No.2,
ISSN: 2356-8402. Doi:
https://doi.org/10.21608/ATASU.2020.95130
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Using Ecological Footprint Accounting model as a tool for
sustainable development in the hospitality industry:
Evidence from Egypt
Mohamed Samy El-Deeb
Associate professor of accounting
Faculty of Management Sciences
Modern Sciences and Arts University
msamy@msa.eun.eg
Yasser Tawfik Halim
Professor of Marketing
Faculty of Management Sciences
Modern Sciences and Arts University
ytawfik@msa.eun.eg
ABSTRACT
In recent years, the trend toward the sustainability reports are increasing
especially within the era of the integrating reporting. In the same time the
efforts of the government for improving the hospitality sector represented
in the tourism industry in Egypt is one of the main objectives of 2030
plan. The impacts of the hospitality industry on the environment have
become widely acknowledged. As tourism is predicted to continue
growing in the next decade, there is an urgent need for the hospitality
sector to embrace sustainability principles in order that tourists may
continue travelling, while placing minimal impacts on the natural
environment. Although there is much debate over the concepts of
sustainability and how it is to be measured, the Ecological Footprint has
recently been proposed as a key indicator of sustainable hospitality
activities, due to its abilities to quantify the amount of resources needed
for hospitality activities, and enable comparisons between hospitality
components through its global, standardized measurements. The
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Ecological Footprint is a tool that measures humanity's demands upon the
natural biosphere and its effect on the national resources of the countries.
It tracks the biologically productive land and water required to produce
all the resources a population consumes and to segregate its wastes.
Information was collected on respondents from hotels managers and they
requested to provide information on accommodation aspects such as
occupancy rates, property sizes, average water and energy usage, waste
management routines and information to determine the average ecological
footprints of tourists in the selected hotels. In order to understand the
relationship between the ecological footprint and tourist behaviors. The
analysis of this information provide an indication of the current green
status of hospitality and for better environmental practices.
SCOPE OF THE RESEARCH PRESENTATION:
This study attempts to find ways to achieve an acceptable balance
between the sustainable developments of the hospitality industry in Egypt
by increasing the profitability of the hotels without hurting the
environmental resources using Ecological footprint method. It also
attempts to outline effective plan that aims to increase the elements of
environment conservation within the hospitality industry. This study is
coping with the general trend of the government to maintain the
sustainability in all fields of activities. The proposed set of policies take
into consideration the integrity of hospitality services, the criteria of
environmental quality, and all of the necessary aspects needed to achieve
a sustainable development in this valuable industry. Tourists tend to
travel and use water, energy, and produce solid wastes. It also attempts to
outline effective policies, strategies, plans, and programs that aim to
integrate the elements of environmental conservation within managing the
hospitality industry.
Many of International organizations around the world have been calling
attention to the negative influence of hospitality activities on natural
environmental resources, negative economic impact, as well as social and
cultural beliefs and features. It is widely held view that as the world has
got richer, so it has got more polluted. However, the industry
development is growing noticeably in spite of its negative environmental
aspects especially economical ones. This indeed, requires an
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environmental management policy with specific objectives, a well-
defined strategy that can be put into action plans include specific set of
programs to deal with the environmental conservation and pollution
issues and that can be measured on regular intervals to determine their
effectiveness, to assess damages and revise any mistakes, which might
lead to destructive effects.
There are some facts that hospitality professionals should consider,
among these are traditional systems are no longer effective;
environmental quality system should be designed to satisfy tourists’ needs
and expectation; top management commitment to environmental quality
management as a profit center; availability of equipment and availability
of financial resources. It provides a useful means of quantifying
environmental impacts as well as identifying opportunities for cost
savings.
This paper will focus on Ecological footprint as a tool for assessing
sustainability of the Egyptian hospitality sector and the impact of the
proposed measures on the performance of hospitality industry in Egypt.
RESEARCH LIMITATIONS
The results of the research based on a limited survey that were distributed
on number of hotels of Great Cairo region for a limited budget and time
limitation. Our research participants are International chains of 5 star
hotels managers operating in Egypt as we hypothesize that they are much
more deliberate for keeping record better than other hotels categories
managers, and it is recognized that further research is necessary to
establish the exact nature of the causal linkages between the ecological
footprint accounting proposed model and the sustainability assurance for
the whole categories of the Egyptian hospitality industry, to gain insights
and be able to generalize the results.
KEY WORDS
Ecological footprint, Hospitality industry, Sustainable development
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LITURATURE REVIEW:
Reviewing literature revealed a gap with regard to the impact of
managing environmental conservation on the hospitality sector resources
and performance. Therefore, this research study is a significant
contribution to knowledge as it covers the above stated gap.
As a result of the arguments between the researchers upon the relation
between the economic impact of using the environmental activities and
the sustainability of the companies, many researchers started to stress
more in their writings on the responsibility of the organizations for the
sustainability of the society. (O’Dwyer and Owen, 2005; Mock et al.,
2013; Claire Gillet-Monjarret, 2018). The concept of sustainability had
been the trend among all the corporate governance writes during the past
10 years. Another important concept that had emerged also is the
corporate accountability for the sustainability of the society as a whole.
This led the organizations to include their social and environmental
activities in a separate report like the CSR reports and the integrated
reports to face the demands for information from the stockholders.
Ecological Footprint is a practical tool that enables hotels to calculate the
environmental impact that a hotel products have on the environment in
terms of resources used. It also gives an estimate of the relative
environmental sustainability of a product, and helps to identify
opportunities for footprint reduction and cost savings (Maroun, Atkins,
2018).
The environmental impacts of tourists’ activities
Tourist activities could hurt the environment from different ways,
whether through soil destruction, the interruption of wildlife behaviors,
coral reef damage or the excessive use of energy and resources
(Almeida‐Neto, et al., 2008). As tourists try to keep their consumption
level at holiday similar to their consumption at home countries, even for
places that are not well equipped to handle the possibly damaging effects
of mass hospitality activities, which could be a problem for those touristic
areas (Welford et al., 1999). In the case of Caribbean cruise tourism,
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environmental impacts occur through pollution, coral reef destruction,
and the deliberate dumping of waste oil and chemicals. Furthermore, the
average cruise tourist generates 1 kg of burnable waste, 0.5 kg of food
waste and 1 kg of glass and caddy waste per day for disposal (Hart, et al.,
2002). Although these types of hospitality activities impacts are often
visible at a destination, and can possibly be more damaging especially in
the case of air travel because it is responsible for greenhouse gases which
is the main reason for global warming (Gössling, et al., 2002). The
alarming fact about these impacts is that hospitality activities are
continually growing and developing. For instance, the World Tourism
Organization predicts that the number of worldwide tourists will increase
from 720 million in 2004 to 1.6 billion by 2020 (Murphy, Price, 2005).
Consequently, of these predictions, there is a definite need to reduce the
impacts of hospitality activities, while permitting countries to remain
benefiting economically from hospitality money (Böhler et al., 2006).
Sustainable development in the hospitality industry
The World Commission on Environment and Development introduced the
concept of sustainable development. It was defined broadly as:
“development that meets the needs of the present, without
compromising the ability of future generations to meet their own
needs”.
The term has criticized by many scientist, it also recognized as
sustainability because of its unclear implications. They thought that due
to its ambiguity they poorly used as a worthless marketing tool (Lele,
1991).
“criteria for sustainability should include not only environmental
stability and improvement, but social, political and economic justice,
improvement in the quality of life and in the overall status” (Parayil,
1996).
Natural capital whether it is renewable or non-renewable is affecting
dramatically the ability of the company in generating profit and by default
its sustainability in the economy (Toth, Szigeti, 2016). one of the major
nonrenewable resources is the energy. The energy culture framework is
allowing a better understanding of the behavior of the organizations in
consuming the energy as nonrenewable resources and its effect on the
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sustainability of the organization from both perspectives financially and
non-finically (Rotzek, Scope and Günther, 2018).
A strong sustainability scenario would result in natural capital stocks
being conserved and enhanced. Contrarily, weak sustainability occurs
when losses of natural capital can be substituted through equivalent
amounts or value of human-made materials. In the long term however,
weak sustainability is not viable, as manufactured products often require
natural capital as a prerequisite (Rees, Wackernagel, 1996).
The sustainability reports of the companies are designed to capture all the
different components of the sustainability measures like the corporate
water accounting tools and methodologies. In this research the researcher
focused on the water as a new topic in the literature of accounting as a
renewable natural capital and it developed a framework to report about
the corporate water accounting (Gibassier, 2018).
The realization of hospitality activities negative impacts occurred
simultaneously with the rise of environmentalism in the mid to late
1980’s, which combined, resulted in the reassessment of hospitality role
and value at destinations (Toth, Szigeti, 2016). According to Rees,
Wackernagel, (1996):
“Sustainable tourism development meets the needs of present
tourists and host regions while protecting and enhancing opportunity
for the future. It is envisaged as leading to management of all
resources in such a way that economic, social and aesthetic needs
can be fulfilled while maintaining cultural integrity, essential
ecological processes, biological diversity and life support systems".
Sustainable hospitality activities are believed to be more accepted in
newly discovered areas where regular activities may be seen negatively,
and it may be the only path that will enable a community to develop while
minimizing impacts on the environment (Genovart, et al., 2016). other
researches reinforced this idea by defining sustainable hospitality
activities as “a positive approach intended to reduce the tensions and
friction created by the complex interactions between the hospitality
industry, visitors, the environment and the communities which are host to
holidaymakers”. (Budeanu, et al., 2016). Pezzey, et al., (1990) believe
there are three main ways that can assist a destination in becoming
sustainable. The first is through using Eco-techniques, which includes
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behaviors such as harvesting solar energy, collecting rainwater, recycling
and using local materials. These techniques can be very significant in
terms of sustaining and enhancing the quality of a destination’s physical
environment. The second method of attaining sustainability is through
environmental sponsorship. This entails making a commitment to the
environment, and communities in which hotels and resorts operate.
Examples include tree planting, creating conservation programs for local
schools, fundraising for threatened species, or allotting an area for an
environmental preserve. Lastly, sustainability can be achieved through
eco-packaging in which hotels and resorts can offer guests
environmentally oriented activities such as wildlife viewing.
As expected with the confusion surrounding sustainable development,
achieving sustainable hospitality activities has been, and continues to be a
difficult challenge. According to Sigee et al., (1999) tourism researchers
and policy-makers responded relatively slowly to sustainable
development’s concepts, and although progress has been made, many
remain on the sidelines, while the debate continues on sustainability’s
definition and implications. Without a doubt, hospitality activities use
natural resources and therefore places significant impacts on the
environment. A joining of hospitality activities and sustainability
concepts therefore seems like a natural move, however many questions
arise regarding the validity of sustainable hospitality activities, how it can
be achieved and how one knows when it has been achieved. Diamantis,
Ladkin, (1999) studied British hospitality business owners were unclear
about the meaning of sustainable hospitality activities and it was to be
implemented into their businesses. Many owners felt that they were
already being sustainable in their work, since they were not offering
activities that were environmentally damaging.
As in sustainable development, there is the argument of whether
sustainable hospitality activities at a destination should entail weak or
strong interpretations. Weak sustainable hospitality activities would
involve continued economic growth, maintenance of adequate
environmental quality and the continued use of current or future
hospitality products and locations. In contrast, strong sustainable
hospitality activities revolve around protecting the natural resources that
support hospitality activities, rather than supporting economic growth at
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the possible expense of the environment (Hunter, 2002). Of course, as
social needs are a primary consideration, it must also be asked whether
sustainable hospitality activities are useful to communities, or if it is just
another popular term intended to gain the interest and money of tourists
looking for meaningful holidays (Martin, 1997). The answer remains
unclear, and may depend on the characteristics of, and available resources
in each tourist destination. As Sigee, et al., (1999) states, “sustainable
development is neither always possible, nor even always appropriate in
the context of tourism”. As such, the debate will continue on whether
hospitality can exist as an economic and development tool, while
ensuring environmental and social sustainability in tourist destinations.
Measuring sustainable performance in hospitality industry
Measurement of the sustainability performance is becoming more
relevant for all the organization as it is considered as an integral part of
the accounting for sustainability and the sustainability management
system for the organizations. The main question here is how to determine
the stakeholder’s expectations for the measurement of the sustainability
performance and what are the effect of that measurement on the
continuity of the organizations in the business (Samanthi Silva, Edeltraud
Guenther, 2018).
Since the concept of sustainability includes economic, social and
environmental aspects, several measures encompassing these areas are
needed to measure hospitality activities impact on the environment.
Social and economic sustainability can be partly measured through the
United Nations Human Development Index, which provides an indication
of the overall well-being of a population, through measuring life
expectancy, education and income (Ozturk et al., 2016).
In contrast, the environmental sustainability of an area can be indicated
through measuring its carrying capacity, defined as the “number of
individuals of a given species that a given habitat can support without
being permanently damaged” (Fernández, et al., 2016). Unfortunately,
there are two weaknesses associated with the carrying capacity theory.
Firstly, the total ecological load of a population will vary according to
income, technology level and their expected standard of living, and
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secondly, people need resources that the carrying capacity of that specific
area may not be able to provide (Hunter, Shaw, 2007). Other
environmental sustainability indicators include the limits of acceptable
change system and the environmental impact assessment, although both
of these indicators focus on the local environment and ignore the larger
global consequences of travel, particularly in the transit phase (Gössling,
et al., 2002). Although no indicator exists for the sole purpose of
measuring environmental sustainability in a hospitality context, promise
appears to lie with the ecological footprint tool which takes into account
the transit phases, provides impacts at a global level and above all, can be
adjusted to address hospitality scenarios (Hunter, Shaw, 2007).
The ecological footprint concept
A measure of the area of biologically productive land and water an
individual population or activity requires to produce all the resources it
consumes and to sequester its waste. Both ecological footprint and bio-
capacity results are expressed in a globally comparable, standardized unit
called a “global hectare” — a hectare of biologically productive land or
sea area with world average bio-productivity in a given year (Fernández,
et al., 2016).
The ecological footprint is a relatively new concept, and it appears that
only a few studies have used this tool to measure hospitality activities
impact; two of which involved sun-seeking tourists on package holidays
(Gössling, et al., 2002) and one which focused on ecological footprint
differences between tourists and a host population (Patterson, Niccolucci
& Bastianoni, 2007). As such, limited research has been completed on the
ecological footprint as it relates to hospitality sustainability.
The ecological footprint is an accounting tool used to measure mankind’s
demand for the regenerative capacity of our planet: Earth’s bio-capacity.
Human demand for bio-capacity is determined by adding up all demands
placed on the productive surfaces of the planet. (Budeanu, et al., 2016;
Cerutti, et al., 2016).
The ecological footprint (EF) is an area-based indicator that measures the
intensity by which humans use resources and generate waste, relative to
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that area’s capacity to provide for these activities. It is also referred to an
‘appropriated carrying capacity’ since every person appropriates the
productive capacity of nature. Ecological footprint calculations take into
account the land and water supplies needed to produce food, fiber and
timber for consuming, absorbing waste generated by energy, and
providing space for infrastructure. A world-average ability to produce
resources and absorb wastes, required to support the life and activities of
one individual (Wackernagel, Yount, 2000).
As ecological footprints vary across the world, countries can be
categorized as ecological debtors, meaning their EF is greater than the
bio-capacity they produce, or they can be creditors whose bio-capacity is
greater than their ecological footprint. The United States and the United
Kingdom are both ecological debtors with footprints that are 50% larger
than the amount of resources each country can produce. In order to
maintain these high footprints, countries in this situation can deplete their
natural capital, import resources from other countries or generate more
waste than their ecosystems can absorb. Canada, on the other hand, even
with a large ecological footprint, is considered a creditor as it possesses a
biocapacity which is over 50% larger than its footprint. As such, its
bioproductive land can relatively easily support its population’s level of
consumption, however continuing with such high ecological footprints
would not result in the achievement of sustainability targets, since one’s
footprint space cannot be shared (Rees, Wackernagel, 1996).
Benefits and limitations of the ecological footprint in the hospitality
industry
The ecological footprint has recently been proposed as a key indicator for
measuring the environmental impacts of tourists’ activities (Hunter,
Shaw, 2007). Unlike other locally based measures, such as carrying
capacity or environmental impact assessments, the ecological footprint
takes into account the consequences of transit as it relates to touristic
activities. (Hunter, Shaw, 2007). As a result of these characteristics,
Wackernagel, Yount (2000) were able to use the EF tool to prove that
current levels of global resource consumption and waste generation were
greater than the biosphere’s biotically productive area. In a hospitality
context, were also able to determine that at least 10% of the world’s
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ecological footprint was occupied by the hospitality industry’s
international component.
Unlike other indicators, the EF does not assume that ecological
productivity can be continually replaced with technological advances,
therefore it highlights the issues that could arise when substitutes are no
longer available (Senbel, McDaniels & Dowlatabadi, 2003).
Furthermore, the EF can be calculated for specific components of a
lifestyle, for entire nations or for business activities, and is therefore a
flexible and versatile indicator. The common unit of measurement allows
the ‘ecological accounts’ of these different components to be compared in
terms of their impacts on the environment, in order to determine their
level of sustainability and discover more eco-friendly alternatives
(Wackernagel, Yount, 2000; Holland, 2003).
Although a promising tool, the Ecological Footprint has limitations and as
such, its calculations cannot derive completely accurate values. Part of its
limitations lie in that fact that knowledge is still developing on the
potential of this indicator. As a result, there are several fundamental
assumptions that must be taken into account, in order to provide
understand the foundation for Ecological Footprint calculations (Cartamil,
et al., 2003):
1. The resources people consume and the wastes they generate can
be tracked.
2. Most of these resource and waste flows can be measured in
terms of the biologically productive area necessary to maintain
these flows.
3. Resource and waste flows that cannot be measured are excluded
from the assessment, leading to a systematic underestimate of
the true Ecological Footprint.
4. Human demand, expressed as the Ecological Footprint, can be
directly compared to nature’s supply (bio-capacity).
5. Area demand can exceed area supply if demand on an
ecosystem exceeds that ecosystem’s regenerative capacity. This
situation, where Ecological Footprint exceeds available bio-
capacity, is known as overshoot.
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Currently, the largest weakness of the EF as a sustainability indicator is
its inability to measure socio-economic factors, resulting in its need to be
combined with other indicators in order to determine the overall
sustainability of a lifestyle or activity (Hunter, Shaw, 2007). Since, the
EF relates environmental consequences to the global biosphere, it also
cannot assist in the understanding of local impacts (Gössling et al., 2002).
Furthermore, EF calculations require detailed information on
consumption and biomass yield figures, which can be difficult to obtain
when statistical databases are incomplete.
Clearly, although carrying a number of positive features, the limitations
surrounding the ecological footprint enable it to only provide a rough
indication of sustainability levels. These limitations appear to be well
known and accepted by ecological footprint advocates. Rees (2000)
states that “ecological footprint analysis was not intended to provide a
dynamic window on the future, but rather a snapshot in time. As such it
can both help to assess current reality and to test alternative ‘what if’
scenarios on the road to sustainability”.
Ecological footprint as a sustainability measurement tool for
hospitality industry
Hunter, (2002) mentioned that the use of the ecological footprint as a tool
for measuring the sustainability of hospitality activities is a new concept,
and one that is not very straightforward given hospitality diversity in
transportation, food and accommodation components. However, the EF
of these individual hospitality components, can be calculated and summed
to produce an approximate hospitality ecological footprint. These
footprints, should in theory, indicate which types of hospitality activities
are and are not sustainable, in order to assist decision and policy makers
in developing hospitality regulations (Wackernagel, Yount, 2000). As a
new concept, it appears that relatively few researchers have attempted to
integrate the ecological footprint into hospitality scenarios, however,
among a few others; this has been successfully completed by (Gössling et
al., 2002; Patterson, Niccolucci, Bastianoni, 2007).
Ecological footprint in hospitality scenarios is still a new concept,
however it shows a promising ability to indicate the global impacts of
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hospitality activities and, in particular, the immense consequences of
hospitality-related transportation. However, there is still much research to
be completed to determine the resource requirements and sustainability
levels of different types of hospitality activities. Footprint promotes the
science of sustainability by advancing the Ecological Footprint, a
resource accounting tool that makes sustainability measurable. Together
with its partners, the Network works to further improve and implement
this science by coordinating research, developing methodological
standards, and providing decision-makers with robust resource accounts
to help the human economy operate within the Earth’s ecological limits
(Fortier, Messier, 2006).
This initiative also blends beautifully into the Accor Group’s new aim,
which it has encapsulated in its new Open New Frontiers in Hospitality
claim. It claimed by the authors that they are innovating, inventing new
approaches to break down barriers and imagining hospitality tomorrow. It
was claimed also, that they are driving towards 360° hospitality,
combining comfort, wellness and environment-friendliness. That is
inherent to the Group’s strategy to build ever more inviting – and smart –
hotels (Melissen, et al., 2016).
This study was set out to assess the Group’s impacts on the environment
– and aims high. It looks at the full picture, not just co2 emissions: it
encompasses the Group’s annual impacts in terms of energy, water
consumption and contamination, and waste. And it looks way beyond
Accor hotels, at the indirect impacts that they generate for example in the
farms that raise the poultry they serve in their restaurants and from the
trucks that transport it between the two (Melissen, et al., 2016).
Accounting for the ecological footprint in the hospitality industry
The Ecological Footprint is a well-known resource accounting tool that
measures how much biologically productive land and water area an
individual, a city, a country, a region, or humanity uses to produce the
resources it consumes and to absorb the waste it generates, using
prevailing technology and resource management (Rees, Wackernagel,
1996). The Ecological Footprint is most commonly expressed in units of
global hectares. A global hectare is a hectare that is normalized to have
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the world average productivity of all biologically productive land and
water in a given year. Because of international trade and the dispersion of
wastes, hectares demanded can be physically located anywhere in the
world. (Wackernagel, et al., 1999)
To date, Switzerland has completed a review, while Belgium, Ecuador,
the European Commission, Finland, France, Germany, Indonesia, Ireland,
Japan, Luxembourg and the United Arab Emirates have partially
reviewed or are reviewing their accounts. A formal review committee
oversees the continuing methodological development of the National
Footprint Accounts. There is growing recognition of the need to
standardize sub-national Footprint applications in order to increase
comparability across studies and time periods. Methods and approaches
for calculating the Footprint of municipalities, organizations and products
are being aligned through a global Ecological Footprint standards
initiative (Nakajima, Ortega, 2016).
The predominant focus in natural capital accounting is on integrating
environmental information into standard economic accounts. However,
also of interest is the potential to glean information from standard
economic accounts about activities undertaken by economic units that
may be considered “environmental” (Ahmad, et al., 1989).
To this end, the SEEA Central Framework defines the environmental
activities of environmental protection and resource management as
constituting a scope that can be used to classify various standard
economic flows such as output, value added, investment and employment.
The SEEA Central Framework defines environmental protection
expenditure accounts to record expenditures by governments, households
and businesses that have the purpose of maintaining or improving the
environment. The SEEA Central Framework also defines the
Environmental Goods and Services Sector and an associated set of
indicators that may be used to provide ongoing estimates of output and
employment in environmental activities as a share of overall economic
activity (Bebbington, Larrinaga, 2014).
To further aid assessment of the policy response to environmental issues,
this area of accounting provides definitions for environmental taxes and
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environmental subsidies and similar transfers. Particularly at an
international level, consistent definition of these types of variables
permits an assessment of alternative policy responses (Galli, 2015).
Fundamental Assumptions of Ecological Footprint Accounting
Ecological Footprint accounting is based on a fundamental assumption
(Wackernagel et al., 2002):
“The majority of the resources people consume and the wastes they
generate can be tracked. Most of these resource and waste flows can
be measured in terms of the biologically productive area necessary to
maintain flows”.
Resource and waste flows that cannot be measured were excluded from
the assessment, leading to a systematic underestimate of humanity's true
Ecological Footprint. By weighting each area in proportion to its bio-
productivity, different types of areas can be converted into the common
unit of global hectares, hectares with world average bio-productivity.
Because a single global hectare represents a single use, and all global
hectares in any single year represent the same amount of bio-productivity,
they can be added up to obtain an aggregate indicator of Ecological
Footprint or biocapacity (Coscieme et al., 2016).
Human demand, expressed as the Ecological Footprint, can be directly
compared to nature's supply, biocapacity, when both are expressed in
global hectares. Area demanded can exceed area supplied if demand on
an ecosystem exceeds that ecosystems regenerative capacity (e.g.,
humans can temporarily demand more biocapacity from forests, or
fisheries, than those ecosystems have available). This situation, where
Ecological Footprint exceeds available biocapacity, is known as
overshoot (Koocheki, et al., 2016).
Although the goal of Ecological Footprint accounting is to measure
human demand on the biosphere as accurately as possible, the
methodology is designed to underestimate human demand on the
biosphere where uncertainty exists. Because the Footprint is a historical
account, many activities that systematically erode nature's future
regenerative capacity are not included in current and past Ecological
Footprint accounts. These activities include the release of materials for
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which the biosphere has no significant assimilation capacity (e.g.
plutonium, PCBs, dioxins, and other persistent pollutants) and processes
that damage the biosphere's future capacity (e.g., loss of biodiversity,
salination resulting from cropland irrigation, soil erosion from tilling).
Although the consequences of these activities will be reflected in future
Ecological Footprint accounts as a decrease in biocapacity, Ecological
Footprint accounting does not currently include risk assessment models
that could allow a present accounting of these future damages (Kitzes, et
al., 2009).
Similarly, Ecological Footprint accounts do not directly account for
freshwater use and availability, since freshwater acts as a limit on the
amount of biological capacity in an area but is not itself a biologically
produced good or service. Although the loss of biocapacity associated
with water appropriation or water quality degradation is reflected as a
decrease in overall biocapacity in that year, an ecological footprint of its
use is not currently allocated to the consumer of the water resource
(Koocheki, et al., 2016).
Hospitality activities are currently attributed to the country in which they
occur rather than to the traveler’s country of origin. This distorts the
relative size of some countries’ Footprints, overestimating those that host
tourists and underestimating the home countries of travelers. Current data
constraints also prevent the Footprint associated with the generation of
internationally-traded electricity from being allocated to the final
consumer of this energy. These two limitations affect the allocation of
Ecological Footprint between nations but not the total global Footprint.
The demand on biocapacity resulting from mission of greenhouse gases
other than carbon dioxide is not currently included in Ecological
Footprint accounts. Incomplete scientific knowledge about the fate of
greenhouse gases other than carbon dioxide makes it difficult to estimate
the biocapacity required to neutralize their climate change potential
(Kasim, 2015).
RESEARCH METHODOLOGY:
In order to provide a comprehensive study, the researchers referred to a
large number of textbooks, periodicals and online databases. Overall,
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previous literature reviews in this area imply that there is a gap in the
literature pertaining to enhancing the environmental performance by
decreasing the Ecological Footprint in the Egyptian five star hotels.
Reviewing literature was helped in formulating the research questions and
identifies the existing gap in the literature.
The problems that face most of the Egyptian hotels are how to enhance
sustainable development. This can be achieved through relating
Ecological footprint accounting model with the performance of the
hospitality industry in Egypt. Therefore, it was crucial to examine first,
how to integrate the Ecological footprint accounting model with the three
pillars of sustainable development in Egyptian five star hotels, second,
how to measure financial performance of the hospitality industry in Egypt
based on the Ecological Footprint proposed model.
A methodology was considered to be appropriate in view of the nature of
the data to be collected and the knowledge about environmental
conservation in Egyptian hospitality Industry. Moreover, reviewing
literature provided a valuable insight as to which of the materials and
methods could be most appropriate to collect reliable data from
hospitality industry in question. The questionnaire is a more appropriate
instrument for gathering large amount of data from the sample selected
than other data collection methods.
A pilot study was conducted on one of the five star hotels to test the data
collection instrument and examine the efficiency and effectiveness of the
methodology selected to achieve the objectives of this research study. In
addition, a wide-ranging and vigorous fieldwork was conducted; covering
10 luxurious five-star hotels was randomly selected in Great Cairo region.
The research was targeting 120 managers.
RESEARCH OBJECTIVES:
1. To integrate the Ecological footprint accounting model with the
three pillars of sustainable development in Egyptian five star
hotels.
2. To measure the financial performance of the hospitality industry
in Egypt based on the Ecological Footprint accounting proposed
19
model.
RESEARCH HYPOTHESES:
1. The integration of Ecological footprint accounting model has a
positive association with the three pillars of sustainable
development in the Egyptian five star hotels.
2. The Ecological footprint accounting proposed model enhances the
financial performance of the hospitality industry in Egypt.
Data collection instruments
Primary data were collected using structured questionnaires, targeting
managers from all departments. The questionnaire was composed of 3
clusters (Social, Environmental, Economic/Financial) of questions that
cover the efficient use, consume and dispose of Water, Energy and Solid-
Wastes at the following areas:
• Water:
o Questions covering to what extent the hotel use tap water in
the daily activities. How to measure water quality by Health
Safety Environment (HSE) programs and how it affects
organizational activities. What is the most efficient methods to
reduce water pollution (reuse, recycle….) and to rationalize
the use of water. Calculating the cost of tap water and the cost
of wastewater disposal and measuring the effect on the cost of
product and service provided to customer. Also, the effects on
organizational profitability. Determining the cost of water
quality enhancement and its effects on organizational
profitability (filtering, treatment, etc.). and finally assessing
the cost of water treatments and its effect on organizational
profitability.
• Energy
o Questions covering to what extent the hotel use the source of
electricity in all working activities for serving guests (cooking,
heating, lighting, and transportation). Questioning the other
sources of energy rather than electricity in working activities
20
(natural gas, gasoline coal…etc). Determining the different
techniques to decrease the volume of energy used. How to
measure the effectiveness of some of renewable resources of
energy come from (solar, wind, others) used by the
organization. Assessing how energy cost (electricity, natural
gas, other) affect the (cost) of product and service. Finally,
evaluating the cost of energy conservation program and its
effect on the cost of product and service
• Solid wastes
o Questions covering to what extent the hotel measure the
volume of solid waste generated by employees and guest
affects daily activates. How to use the effective program to
reduce the volume of solid waste (ISO 14001). Determining
ways of segregate solid waste at the source and its effect on
the hotel. Assessing the cost of disposing and recycling solid
wastes effect on the organization profitability. Finally,
expecting the ecological footprint impact to enhance the
financial profitability ratios (ROI, ROA, ROE…. etc)
Sample size
The sample was selected from 10 five-star hotels in Greater Cairo were
participating in the study, hotels totally declined exposing their names in
the study. The hotels were selected from the international chains
operating in Egypt.
Three stages clustering sample is a non-probability sampling method that
is based on: first selecting 2 governorates (Cairo and Giza (Greater
Cairo)) from the 27 Egyptian governorates. Second selecting samples
from hotels that represent the number of international chains in the
selected governorates. Third, randomly distribute the questionnaire forms
to the minimum number of employees who represent each hotel. In this
case, 15 forms were distributed to the three hierarchical levels (senior,
middle, and first line managers). In addition, this sampling technique
reduces cost and time in preparing the sample. 150 forms were distributed
to managers of the all departments in the hotels under investigation.
However, 107 valid filled in questionnaire forms were received from the
21
three managerial hierarchical levels. Therefore, the response rate is 71.33
% which is statistically acceptable for data analysis. Data obtained was
analyzed by using the Statistical Package for Social Sciences (SPSS).
Combinations of different techniques were used including: reliability,
intrinsic validity and logistic regression model.
THE PROPOSED MODEL:
The proposed model has three folds environmental, social and
economic/financial. The overall objective is to provide hospitality
managers with new analytical and comprehensive tool to help them
overcome the current socio-economic and environmental challenges for
overcome and reduce the damages happened by the tourists in the
environment. The proposed model is visually represented in table (1). The
model was designed using the views and opinions of hospitality
properties’ decision makers, professionals, hotel management,
environment and economic professors.
The following table includes the measures proposed by the researchers for
measuring the effect of the ecological footprint and the sustainable
development on the environmental and financial performance of the five
star hotels.
Table (1): proposed social, environmental and financial measures for
sustainability development in hospitability industry
Components
Data Required
Social
(Water) Employees using tap water in their daily activities for
serving guests
(Water) Health Safety Environment (HSE) programs for
measuring water quality (affect the activities of organization)
(Energy) Employees using only electricity in all working
activities for serving guests (cooking, heating, lighting, and
transportation)
(Energy) Employees using other sources of energy rather than
electricity in working activities (natural gas, gasoline,
coal…etc)
(Solid wastes) Volume of solid waste generated by employees
and guest affects daily activates
Environmental
(Water) The organization using efficient methods to reduce
water pollution (reuse, recycle….)
(Water) The organization using efficient methods to rationalize
22
the use of water
(Energy) The organization using different techniques to
decrease the volume of energy used
(Energy) Some of the energy used by the organization come
from renewable resources (solar, wind, others)
(Solid wastes) The organization using effective program to
reduce the volume of solid waste (ISO 14001)
(Solid wastes) The organization segregates the solid waste at the
source
Economic/Financial.
(Water) Tap water cost affects the cost of product and service
provided to customer.
(Water) The cost of wastewater disposal affects profitability.
(Water) The cost of water treatments affects profitability
(Water) The cost of water quality enhancement affects
profitability, (filtering, treatment, etc.).
(Energy) Energy cost (electricity, natural gas, other) affect the
(cost) of product and service
(Energy) The cost of energy conservation program affects the
cost of product and service
(Solid wastes) Cost of disposing and recycling solid wastes
affects the organization profitability.
The ecological foot print impact can enhance the financial
profitability ratios (ROI, ROA, ROE….etc.)
Description of the proposed model
Figure (1): proposed Ecological footprint model
The environmental issues may present themselves as temporary or
23
permanent change to the atmosphere, water, and land due to tourist
activities, which can result in impacts that may either reversible or
irreversible. The social issues may emerge in the workplace of a client’s
operations and also may impact the surrounding communities. A tourist’s
performance in the areas listed below can present environmental and
social risk to the operation:
• Water use and conservation (tourist’s operations use water in
various production processes, which vary from place to another.
Typically, water use at the facility level is associated with
different activities.)
• Wastewater and water quality (tourist’s operations generate
wastewater, which is treated on site and/or discharged either to
the municipal sewage system for treatment or directly to the
environment (surface water) without prior treatment.)
• Energy use and conservation (A tourist’s consumptions energy to
power processes such as heating and cooling; auxiliary systems
such as motors, pumps and fans; generating compressed air;
heating, ventilation and air conditioning systems (HVAC);
lighting systems.)
• Solid wastes (tourist’s operations may generate, store, or handle
any quantity of hazardous or non-hazardous waste across a range
of industry sectors. Hazardous materials are materials that
represent a risk to human health, property, or the environment
due to their physical or chemical characteristics like water supply
treatment plant, or air pollution control facility and other
discarded materials including solid, liquid, and semi-solid. Or
non-hazardous like any garbage, food waste, refuse, sludge from
a wastewater treatment plant)
The Economic/Financial performance of the firm play a pivotal role in
environmental management system. Many hotel managers suggest that
profitability is hurt by the higher production costs of environmental
management activities, while others cite that there is a positive evidence
of increased profitability. The proposed model suggests a positive links
between the environmental management associated with decreasing the
ecological footprint to improving the financial performance of the hotels.
The linkage to firm performance will be tested empirically using archival
data of firm-level environmental and financial performance. Both
24
practitioners and researchers can link between environmental
management and financial performance; this can be used as a measure of
the benefits experienced by industry leaders.
Guidelines for new model implementation:
Therefore, the appropriate way to enhance the service industry is to
implement the new model with its proposed three folds constructs by the
practitioners to achieve its ultimate goal, which is environmental
conservation. The next guidelines are a good starting point for the service
business by delivering:
• Benchmark or developing a stable standard for measuring the actual
consumption of water used during different level of occupation at the
selected hotels. Then compare the actual consumption with the
ecological footprint standards to reduce wastewater and work to
improve water quality in order to take action and correct the
deviations or find way to reduce the consumption and increase water
conservation. Finally, measuring the effectiveness of the action taken
on hotel profitability.
• Likewise, for energy conservation, practitioners must analyse the
ecological footprint standards to understand and measure the key
drivers or the close link between the energy use and energy
conservation. Then, find ways to reduce tourists’ consumptions of
energy with its different forms, like heating and cooling; fans;
ventilation and air conditioning systems and lighting systems, etc. to
give a clear evidence of how can these activities affect hotel
profitability.
• As for the solid wastes and the huge quantity produced by the tourists
at the hotels, hoteliers must find way to control this wastes either
hazardous or non-hazardous wastes by comparing the quantity
produced with the ecological footprint standards. There is no
universally applicable set of principles or rules by which to manage
and control the solid wastes at the hotels as most of them use the
segregation system. Hotel chains are individually different, face
different situations, and require different ways of managing.
Therefore, controlled experiments give better results and for sure
each chain search for ways to increase the profitability.
• Look over the economies of scale by concentrating on the
competitive advantages and the unique selling proposition to
25
differentiate the marketing offering and answer the question why
hotels apply environmental conservation techniques and ignore non-
environmental techniques. Therefore, hotels must capture the
opportunities to improve the financial profitability ratios (ROI, ROA,
ROE….etc.) while keeping the overall hotels budget constant.
Data analysis
The Factor Analysis as a technique was employed to the answers of
respondents pertaining the construct. Confirmatory Factor Analysis was
used to verify the proposed model construction and operationalization. In
this case, the scale was specified upfront as appears above in figure (5)
and (6) and it was known that a certain subset of the scale represents an
independent dimension within this scale. For example, it is known that
the questions pertaining to “noticeable management practices regarding
the utilization of available resource during crisis time: are: forced
employee downsizing, lower number of employee training and
development programmes, lower employee benefits, lower quality of food
and beverage items, and lower prices, undesirable market segments. If
there is a need to build a regression model that predicts the influence of
the previous elements on an outcome variable, in this case “employee
major concerns and behavioural patterns during crisis times” we would
start to model a confirmatory factor analysis of the questionnaire items
that load onto the above highlighted elements and then regress onto an
outcome variable.
An exploratory factor analysis was also employed. The data collection
instruments of this study consist of a lot of questions that represent 12
clusters (variables). Exploratory Factor Analysis attempted to bring inter-
correlated variables together under more general, underlying variables.
More specifically, the goal of this type of factor analysis is to reduce the
dimensionality of the original space and to give an interpretation to the
new space, spanned by a reduced number of new dimensions which are
supposed to underlie the old ones.
Results and discussion
26
Descriptive analysis was used initially in order to show the means,
standard deviation and coefficient of variation of the target sample under
study for the three folds environmental, social and economic/financial.
Table (2) shows reliability and intrinsic validity for research variables.
Table (3) presents descriptive statistics for social. Table (4) provides the
descriptive statistics for environmental. Table (5) shows the descriptive
statistics for economic/financial. Table (6) Confirmatory Factor Analysis
by standardized and unstandardized regression weights. Table (7) shows
the Goodness of Fit Indices in the Confirmatory Factor Analysis. Finally,
table (8) provides the Full Entry logistic regression model to determine
effect of Ecological footprint accounting model to Assess the Financial
performance of Hospitality Industry in Egypt.
The objective of this research study is to integrate the Ecological footprint
accounting model with the three pillars of sustainable development in
Egyptian five star hotels and to measure financial performance of the
hospitality industry in Egypt based on the Ecological Footprint proposed
model. The model is introducing new layers of depth measure to the
effect of the ecological footprint and the sustainable development on the
social, environmental and financial performance of the five star hotels.
The model is opening new thinking channels that urge managers to deal
with a sustainable development as an opportunity to generate more profits
and financial gains to hospitality properties. The employed data collection
instrument had few questions that aim at exploring and evaluating the
current situation within the hospitality industry in Egypt.
1- Reliability and intrinsic validity for research variables:
Table (2): Reliability and intrinsic validity for research variables
No
Dimension
Reliability
coefficient
intrinsic
validity
1
Social.
0.840
0.9165
2
Environmental.
0.877
0.9364
3
Economic/Financial.
0.893
0.9449
Total
0.949
0.9741
According to Table (2), we find out that reliability coefficient and
intrinsic validity for research dimensions are (0.949), (0.9741)
respectively; highly internal consistency based on the average inter-item
correlation. The most four dimensions with highly Reliability coefficients
27
are: Economic/Financial, Environmental, and Social, with Reliability
coefficient (0. 893), (0. 877), (0. 840) respectively.
1. Social:
Table (3): Descriptive statistics for Social
NO.
Statements
MEAN
SD
CV
RANK
1
(Water) Employees using tap
water in their daily activities
for serving guests
4.1321
0.64845
15.69
1
2
(Water) Health Safety
Environment (HSE)
programs for measuring
water quality (affect the
activities of organization)
4.1226
0.71318
17.30
2
3
(Energy) Employees using
only electricity in all
working activities for
serving guests (cooking,
heating, lighting, and
transportation)
3.9057
0.73715
18.87
3
4
(Energy) Employees using
other sources of energy
rather than electricity in
working activities (natural
gas, gasoline, coal…etc)
3.7642
0.81125
21.55
4
5
(Solid wastes) Volume of
solid waste generated by
employees and guest affects
daily activates
3.7642
0.85693
22.77
5
TOTAL
3.9377
0. 59096
15.01
--
According to Descriptive statistics in table (3), it can be concluded that:
▪ the most three homogeneous variables are: Employees using tap
water in their daily activities, admit your shortcomings, Health
Safety Environment, and Employees using only electricity in all
working activities with coefficient of variation (15.69%),
(17.30%), (18.87%) respectively.
While the value of total weighted mean for Social is (3.9377), with
coefficient of variation (15.01%), therefore we have sometimes direction
28
to the Social dimension.
2. Environmental:
Table (4): Descriptive statistics for Environmental
NO.
Statements
MEAN
SD
CV
RANK
1
(Water) The organization using
efficient methods to reduce
water pollution (reuse,
recycle….)
3.9340
0.69377
17.64
1
2
(Water) The organization using
efficient methods to rationalize
the use of water
4.0283
0.74906
18.59
2
3
(Energy) The organization
using different techniques to
decrease the volume of energy
used
3.8585
0.76144
19.73
3
4
(Energy) Some of the energy
used by the organization come
from renewable resources
(solar, wind, others)
3.6887
0.78514
21.29
4
5
(Solid wastes) The organization
using effective program to
reduce the volume of solid
waste (ISO 14001)
3.7170
0.80184
21.57
5
6
(Solid wastes) The organization
segregates the solid waste at
the source
3.6226
0.86688
23.93
6
TOTAL
3.8082
0.61196
16.07
--
According to Descriptive statistics in table (4), it can be concluded that:
▪ The most three homogeneous variables are: The organization
using efficient methods to reduce water pollution, the organization
using efficient methods to rationalize the use of water, and The
organization using different techniques to decrease the volume of
energy used, with coefficient of variation (17.64%), (18.59%),
(19.73%) respectively.
29
▪ While the value of total weighted mean for Social is (3.8082),
with coefficient of variation (16.07%), therefore we have
sometimes direction to the Environmental dimension.
3. Economic / Financial:
Table (5): Descriptive statistics for Economic / Financial
NO.
Statements
MEAN
SD
CV
RANK
1
(Water) Tap water cost
affects the cost of product
and service provided to
customer.
3.9333
0.72413
18.41
5
2
(Water) The cost of
wastewater disposal affects
profitability.
4.0381
0.73280
18.15
2
3
(Water) The cost of water
treatments affects
profitability
3.9905
0.74026
18.55
6
4
(Water) The cost of water
quality enhancement affects
profitability, (filtering,
treatment, etc.).
3.9238
0.71650
18.26
4
5
(Energy) Energy cost
(electricity, natural gas,
other) affect the (cost) of
product and service
3.6952
0.76112
20.60
7
6
(Energy) The cost of energy
conservation program affects
the cost of product and
service
3.9623
0.64623
16.31
1
7
(Solid wastes) Cost of
disposing and recycling solid
wastes affects the
organization profitability.
3.8962
0.80391
20.63
8
8
The ecological foot print
impact can enhance the
financial profitability ratios (
ROI, ROA, ROE….etc)
3.9717
0.72319
18.21
3
TOTAL
3.9262
0.55489
14.13
--
According to Descriptive statistics in table (5), it can be concluded that:
30
▪ The most three homogeneous variables are: The cost of energy
conservation program, The cost of waste water disposal affects
profitability., and The ecological foot print impact can enhance
the financial profitability ratios (ROI, ROA, ROE….etc), with
coefficient of variation (16.31%), (18.15%), (18.21%)
respectively. While the value of total weighted mean for Social is
(3.9262), with coefficient of variation (14.13%), therefore we
have sometimes direction to the Social dimension.
3- Confirmatory Factor Analysis (CFA):
The confirmatory factor analysis is conducted to test how well the
measured variables represent the constructs. The key advantage is that the
researcher can analytically test a conceptually grounded theory explaining
how different measured items represent important business measures.
When CFA results are combined with construct validity tests, the
researcher can obtain a better understanding of the quality of their
measures.
Table (6) shows the three constructs which were initially considered to
express the effect of Ecological footprint accounting model to Assess the
Figure (2): Confirmatory factor analysis results (path diagram for a
measurement model)
31
Financial performance of Hospitality Industry in Egypt. The construct
validity is the extent to which a set of measured items actually measures
the construct. This has been computed in the Confirmatory Factor
Analysis and variables shown in the table (6) were found to be valid.
Table (6): Confirmatory Factor Analysis by standardized and
unstandardized regression weights
Standardize
d
estimate
Unstandardiz
ed estimate
S.E.
t_tes
t
Signific
ant level
S1
<---
SOCIAL
1.000
0.564
S2
<---
SOCIAL
1.475
0.757
.258
5.713
0.001***
S3
<---
SOCIAL
1.453
0.721
.262
5.551
0.001***
S4
<---
SOCIAL
1.825
0.823
.305
5.991
0.001***
S5
<---
SOCIAL
1.688
0.721
.304
5.549
0.001***
EN1
<---
ENVIROMENT
1.000
0.745
EN2
<---
ENVIROMENT
.991
0.684
.141
7.039
0.001***
EN3
<---
ENVIROMENT
1.204
0.817
.141
8.561
0.001***
EN4
<---
ENVIROMENT
1.181
0.778
.146
8.104
0.001***
EN5
<---
ENVIROMENT
1.181
0.761
.149
7.916
0.001***
EN6
<---
ENVIROMENT
1.103
0.658
.163
6.750
0.001***
EC1
<---
ECO_FINANCIA
L
1.000
0.746
EC2
<---
ECO_FINANCIA
L
1.001
0.736
.131
7.624
0.001***
EC3
<---
ECO_FINANCIA
L
1.046
0.762
.132
7.920
0.001***
EC4
<---
ECO_FINANCIA
L
.925
0.697
.129
7.176
0.001***
EC5
<---
ECO_FINANCIA
L
1.109
0.790
.135
8.233
0.001***
EC6
<---
ECO_FINANCIA
L
.780
0.653
.116
6.694
0.001***
EC7
<---
ECO_FINANCIA
L
.950
0.640
.145
6.542
0.001***
EC8
<---
ECO_FINANCIA
L
.957
0.716
.129
7.395
0.001***
*** Significant at level less than (0.001).
According to Table (6), the researchers can conclude the following:
32
1. All standardized regression weights (factor loading) are greater
than 0.50 –which means that all measured variables are
statistically significant.
2. t- Test for all measured variables is significant at a level of
significance less than (0.001) respectively.
3. The significant linear positive relationship among the three latent
variables; social, environmental, and economic/financial have
coefficient values with (0.924), (0.880), and (0.913) at Significant
at level less than (0.001).
4- Measuring the Goodness of Fit of the (CFA) model:
Table (7): The Goodness of Fit Indices in the Confirmatory Factor Analysis
Chi-Square
268.756
Degree of Freedom
149
Level of Significance
0.001
Normed Chi-Square
1.804
Root Mean Square Residual (RMR)
0.036
Goodness of Fit Index (GFI)
0.772
Adjusted Goodness of Fit Index (AGFI)
0.710
Normed Fit Index (NFI)
0.804
Relative Fit Index (RFI)
0.775
Incremental Fit Index (IFI)
0.902
Tucker Lewis Index (TLI)
0.885
Comparative Fit Index (CFI)
0.900
Root Mean Square Residual Approximation (RMSEA)
0.087
The mean variance extracted
0.56
From table 7, the researchers noticed the following:
1. All the goodness of fit tests of the model showed significant
results or i.e., the majority of indicators at acceptable limits,
and then the possibility of matching the actual form of the
model estimated.
2. The mean variance extracted for all latent constructs is 0.56
i.e., there is adequate convergent validity
5- The logistic regression model
There are many important research topics for which the dependent
variable is "limited." or categorical response variable. Logistic regression
33
is useful for situations in which you want to be able to predict the
presence or absence of a characteristic or outcome based on values of a
set of predictor variables. It is similar to a linear regression model but is
suited to models where the dependent variable is dichotomous. Logistic
regression coefficients can be used to estimate odds ratios for each of the
independent variables in the model. Logistic regression is applicable to a
broader range of research situations than discriminant analysis.
Table (8): Full Entry logistic regression model to determine effect of
Ecological footprint accounting model to Assess the Financial
performance of Hospitality Industry in Egypt
Prob.
R2
Chi –square test
Wald test
Estimate
d
coefficie
nt
Independent
Variables
N
o
Sig.
value
Sig.
value
0.86
83.6%
***0.001
63.67
***0.001
263.30
2.02-
Constant
1
0.99
***0.001
14.333
2.019
Social
2
0.93
***0.001
26.959
1.757
Environmental
3
***0.001
28.267
1.545
Economic /
Financial
4
* Parameter is significant at the (.05) level
** Parameter is significant at the (.001) level
***Parameter is significant at the (.001) level
According to Stepwise multiple logistic regression model in table (8), it
can be concluded the following:
1- Chi –square test:
The chi-square statistic is the change in the -2 log-likelihood from the
previous step, block, or model. Use the “Model Chi-Square” statistic to
determine if the overall model is statistically significant, Like F test in
linear regression model, since The value of "chi square test" is (28.973)
with significant at the (0.001) level, then the researcher concludes that the
overall independent variables statistically significant impact on the
dependent variable or the model is fitted to logistic regression.
2- The Classification table:
The classification table helps you to assess the performance of your
model by cross tabulating the observed response categories with the
predicted response categories. For each case, the predicted response is the
category treated as 1, if that category's predicted probability is greater
34
than the user-specified cutoff. Cells on the diagonal are correct
predictions, whereas Cells off the diagonal are incorrect predictions.
3- Coefficient of determination:
The Independent Variables accepted in the model explain (83.6%) from
total variation of log odds ratio or logit model,i.e., dependent variable,
Financial performance of Hospitality Industry in Egypt, the rest
percent due to either the random error in the regression model or other
Independent Variables excluded from regression model. Larger pseudo r-
square statistics indicate that more of the variation is explained by the
model, to a maximum of 1.
4- Wald test:
It would be useful in determining the significant value of each of the
individual independent variables coefficient in the logistic regression
model. The ratio of B to S.E., squared, equals the Wald statistic. If the
Wald statistic is significant (i.e., less than 0.05) then the parameter is
useful to the model. The significant independent variables are: Social,
Environmental, and Economic / Financial, with significant at less than
(0.05), (0.001) level respectively.
5- Probability event:
The Probability event of each independent variable is the odds ratio
divided by Odds ratio plus one, then the important variables are Return on
equity and Institutional ownership with probabilities (0.86) (0.99), and
(0.93) respectively.
6- Logistic Regression model:
By substituting the values of independent variables, we can then predict
the dependent variable: financial performance of the hotels.
CONCLUSION
Sustainable development asks that social and economic needs are also
accounted for within the accounting reporting framework. In many
instances, hospitality also has negative social and cultural impacts in
destinations, and economic benefits may not be evenly distributed.
Nevertheless, hospitality undoubtedly has great potential to support
35
economic development and is an important element of many countries’
economies. It also has the potential to inform people about sustainable
development and conservation within their economy.
The results of the paper are to be considered among the first publication
to link the ecological footprint model with an accounting measures within
the hospitality industry in Egypt. The research showed the importance of
reporting the assurance reports about the impact of environmental,
economic and social factors on the resources of the companies within a
special emphasis on the Egyptian hospitality industry. The research also,
contributed to the literature by providing a proposed model that included
proposed measures for the different variables of the ecological footprint
concept from the accounting point of view and validated its application
the Egyptian environment.
The researchers concluded the following:
- The sustainable development has a positive impact on the
environmental performance of the hospitality industry in Egypt.
- The validity of the proposed model measures in reflecting the
impact of sustainable development on the financial performance in
the hospitality industry.
- The explanation power of the proposed measures is very high as
R2 is 84% of the variability of the sustainability of the hotels.
- The three constructs which were initially considered to express the
effect of ecological footprint accounting model to assess the
financial performance of hospitality industry in Egypt are valid
with potentiality of improvements in future researches to consider
the other variables not included in the research.
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