The effect of sustainability practices on financial performance: A research in the lodging industry

The Effect of Sustainability Practices on Financial Performance: A Research in The Lodging Industry As a new methodology of business accounting, sustainability performance management has expanded the coverage of firm performance to include the organizational impacts on its all stakeholders. Although various frameworks have been developed to measure sustainable development in recent years, those are at the country- or destination- level and hence the debate still continues on business sustainability performance. Given this gap, this study provides some measures for sustainability performance in the lodging industry consistent with the ETIS indicators. Although an important consensus on sustainability has been emerged, the effects of environmental and social sustainability performance and practices on financial performance remained as a less researched phenomenon in corporate governance studies. To this endeavor, this study aims to investigate the two parallel mediation effect of cost savings and revenue generation on profitability via sustainability management. A bootstrap method in SPSSPROCESS was employed to conduct statistical inference for causal mediation effects. The data obtained from the lodging industry in Antalya revealed that revenue-enhancing and cost-cutting effect of environmental participation exerts a positive impact over profitability. But no difference was found in the strength of the indirect effects. In the supportive model established, a positive relationship was found between the size of the green area reserved in the hotel area and profitability. In addition, the assumptions that social sustainability practices and the number of local suppliers are positively correlated with profitability and the employee turnover rate is negatively correlated with profitability were supported. Keywords: Triple Bottom Line Accounting, Sustainability Performance, Environmental Management Practices; Social Management Practices, Financial Performance; Lodging Industry