Sustainable Destination Management in Luxury Tourism: Balancing Economic Development and Environmental Responsibility

Abstract

This study applied the Stimulus–Organism–Response Theory to investigate the impact of sustainable destination management on perceived luxury service quality, taking into account the mediating role of perceived environmental responsibility and the moderating effect of tourist environmental awareness. Data were obtained from 541 tourists in Northern Cyprus, and the analysis was conducted using Herman’s single-factor test in SPSS version 23 and partial least squares structural equation modeling in SmartPLS version 4.1.1.2. The study’s results revealed a significant positive influence of sustainable destination management on both perceived luxury service quality and environmental responsibility. Furthermore, the study showed a significant positive relationship between perceived environmental responsibility and perceived luxury service quality. Additionally, tourist environmental consciousness was found to be an important influencing factor in perceived luxury service quality. The mediating role of perceived environmental responsibility was revealed to be a significant partial mediator between sustainable destination management and perceived luxury service quality pathways. Although environmental awareness revealed an insignificant moderating influence on the relationship between sustainable destination management and perceived luxury service quality, it indicated a negative significant moderating influence on the relationship between perceived environmental responsibility and perceived luxury service quality. The study highlights how assessments of luxury services are contingent upon perceived environmental responsibility through sustainable destination activities. Emphasizing both academic and management perspectives, it encourages future research to explore broader psychological and contextual factors. Therefore, it underscores the strategic necessity of sustainability in enhancing the luxury tourism experience.

1. Introduction

The global hotel and tourism industry is undergoing substantial transformation, and industry professionals, policymakers, and stakeholders, are integral to this change. The sector is aligning sustainability standards with high-quality service delivery [1]. As tourists become increasingly environmentally aware as climate issues intensify, destinations face pressure to develop tourism strategies that mitigate ecological impact while maintaining economic viability and quality service [2]. This shift partially responds to the prevalence of mass tourism, which is marked by high volume, uniformity, and frequently, low expense, and can adversely impact the environment and culture. This addresses the escalating issue of overtourism, characterized by an excessive influx of tourists to a location simultaneously [3]. Consequently, individuals have begun to reconsider the dynamics of tourism, particularly in emerging regions or those facing vulnerabilities.

Sustainable destination management refers to the strategic planning and implementation of practices aimed at reconciling environmental stewardship, economic development, and social well-being at tourism sites [4]. It has emerged as an essential strategy for resolving conflicts among tourism development, environmental stewardship, and socio-economic progress within this context. Worldwide, this transformation is particularly evident in the luxury tourism sector, where premier experiences are evaluated not just for their distinctiveness and comfort but also for their alignment with environmental principles [5]. Luxury tourism is travel that provides premium, frequently all-inclusive experiences, characterized by personalized services, superior amenities, and exclusivity [6]. Such hotels typically attract affluent guests or upper-middle-class travelers seeking not only luxury but also a distinctive and authentic experience. Increasingly, these ideals are associated with environmental awareness.

Despite the growing significance of sustainability in tourism, limited studies have been conducted on the integration of sustainable destination management into perceived luxury service quality, which assesses service quality through both tangible (e.g., facilities and amenities) and intangible (e.g., personalized attention and experience) dimensions within luxury hotel settings [7,8]. Most scholarly research is on green marketing, eco-tourism, and ethical travel behavior; nevertheless, empirical data connecting destination-level sustainable management practices [9,10,11] with individual perceptions of service quality in luxury travel settings are few. By addressing this gap, this study may potentially enhance the service quality in luxury travel settings and promote a more sustainable approach. The perception of luxury and sustainability as opposing goals rather than complementary concessions undermines both philosophy and practice.

This study examines the complexity of tourist behavior through the lens of the Stimulus–Organism–Response Theory [12], a fundamental theoretical framework that underpins the research. The theory suggests that environmental stimuli, such as destination management practices, influence individuals’ internal evaluations or emotional states, particularly tourists’ perceived environmental responsibility, which in turn shapes their behavioral or evaluative responses, as evidenced in perceived luxury service quality [13]. Furthermore, individual-level factors, like tourist environmental awareness—the awareness, concern, and motivation of tourists towards environmental protection and sustainability [14]—can either amplify or dampen the processing of stimuli, thereby impacting this relationship. The Stimulus–Organism–Response paradigm is particularly relevant to tourism studies, as it elucidates the interplay between external environmental factors, such as sustainability initiatives, and individual cognition in shaping tourists’ perceptions and assessments [15,16]. The relevance of the Stimulus–Organism–Response Theory to this study underscores the solid theoretical foundation of the research, providing a comprehensive understanding of tourist behavior in the context of environmental stimuli.

Northern Cyprus holds significant relevance regarding this issue. The region is actively promoting itself as an emerging luxury destination in the Mediterranean by investing in luxury hotels, integrated resorts, and boutique travel experiences. The Turkish Republic of Northern Cyprus’ Ministry of Tourism and Environment observes that the pursuit of luxury tourism is linked to escalating environmental challenges, including the exploitation of coastal areas, ineffective waste management, and insufficient policy collaboration on sustainable destination development [17,18]. Furthermore, the growing awareness among guests regarding environmental issues necessitates a deeper understanding of how sustainability influences their enjoyment of luxury services.

Investigating the influence of sustainable destination management on perceived luxury service quality in Northern Cyprus, with perceived environmental responsibility as a mediating variable and tourist environmental awareness as a moderating variable, not only addresses the existing gap in the literature but also provides valuable insights for the tourism and hospitality industry. The research examines the influence of sustainability regulations at the destination level on tourists’ perceptions of luxury services, as well as the role of tourist environmental awareness in amplifying or mitigating this effect, offering practical implications for sustainable destination management.

This study presents a distinctive and empirical examination of these concepts within the context of luxury tourism. This research domain, particularly in newly explored regions such as Northern Cyprus, has received limited attention. However, it is of utmost importance, as contemporary research generally perceives sustainability and luxury as fundamentally distinct [19,20]. This study challenges that perspective by proposing that effectively managed sustainability can enhance the concept of luxury.

The study attempts to find answers to the following questions: 1. What is the effect of sustainable destination management on perceived luxury service quality and environmental responsibility? 2. What is the impact of perceived environmental responsibility on perceived luxury service quality? 3. What is the mediating role of perceived environmental responsibility in the relationship between sustainable destination management and perceived luxury service quality? 4. How does tourists’ environmental awareness moderate the relationship between sustainable destination management and perceived luxury service quality, and also between perceived environmental responsibility and perceived luxury service quality?

The significance of this study is twofold. Primarily, it provides insightful analysis for policymakers and tourism administrators in Northern Cyprus to develop more equitable and effective destination policies. Secondly, it contributes to academic knowledge by creating a quantitative model grounded in the Stimulus–Organism–Response Theory that associates destination-level sustainability with perceived service quality, mediated by environmental responsibility and moderated by tourist awareness. This achievement is particularly significant as it addresses a theoretical and contextual gap in hotel and tourism research, highlighting the importance and relevance of the study. The subsequent sections address the literature review and hypothesis development, followed by the methodology, data analysis, discussion of findings, and conclusion.

2. Literature Review and Hypothesis Development

2.1. Theoretical Foundation

The Stimulus–Organism–Response Theory, initially presented by [11], offers a robust psychological framework for understanding the impact of environmental influences on human perceptions, emotional states, and subsequent behaviors. The concept has gained prominence in consumer behavior and service contexts, as it clarifies the impact of external stimuli on internal evaluations, hence guiding customer satisfaction and behavioral intentions [21]. Its growing significance in hospitality research stems from its ability to integrate environmental, cognitive, and emotional factors that affect tourists’ experiences.

In the luxury industry, “stimulus” in hotels and tourism refers to several destination attributes and management strategies that impact the service environment, encompassing aesthetics, environmental initiatives, service infrastructure, and cultural richness. The “organism” refers to visitors’ cognitive or emotional reactions to stimuli, while the “response” indicates their attitudinal or behavioral outcomes, such as satisfaction, loyalty, or perceived luxury service quality.

The Stimulus–Organism–Response framework, which prioritizes sustainable development and the growth of luxury tourism [22], is particularly pertinent in Northern Cyprus. Northern Cyprus, an emerging Mediterranean destination attracting substantial investments in luxury resorts, casinos, and boutique experiences, faces mounting pressure to deliver exceptional luxury while safeguarding its fragile coastal and environmental ecosystems [23]. This situation necessitates an understanding of the sustainable destination management strategies employed and tourists’ perceptions of these measures and their commitment to luxury service.

This study examines, through the Stimulus–Organism–Response framework, the success of sustainable destination management as an environmental catalyst influencing tourists’ perceptions of luxury service quality. Perceived environmental responsibility is characterized as an “organism” variable that encapsulates the cognitive-emotional interpretation of sustainability signals [24,25]. The model identifies tourist environmental awareness as a moderating factor that affects the perception of stimuli.

This concept offers a systematic approach to assessing the impact of Northern Cyprus’s environmental initiatives on tourism experiences. Considering the ecological vulnerabilities of the region and fragmented regulatory frameworks [26], the Stimulus–Organism–Response paradigm facilitates an examination of how tourists perceive sustainable activities and their stance on luxury concepts. The concept highlights perceived environmental responsibility as an essential internal mechanism by which tourists evaluate destination indicators. Travelers are increasingly prioritizing environmental responsibility through investments in sustainable infrastructure, resource conservation, and minimizing resource consumption in their overall evaluation of trip quality [27]. Perceived environmental responsibility serves as the cognitive connection between perceived luxury service outcomes and sustainability inputs, thereby reinterpreting the value of luxury in light of environmental consciousness.

Additionally, the Stimulus–Organism–Response Theory reinforces the incorporation of tourist environmental awareness as a border condition influencing cognitively processed information. Environmentally conscious tourists exhibit heightened sensitivity to sustainability indices [28,29], which affects their propensity to assess sustainable destination management, hence enhancing the perceived quality of luxury services. Conversely, visitors with little environmental awareness may disregard or underestimate such initiatives [29], undermining the stimulus–organism connection. By modifying the intensity and orientation of the interaction between sustainable destination management and perceived environmental responsibility, tourist environmental awareness enhances the theoretical model with additional dimensions.

In luxury contexts, the Stimulus–Organism-Response framework enriches this study by providing a psychologically grounded theory on how a destination’s commitment to environmental sustainability might be transformed into perceived value for tourists. Implementing this notion in Northern Cyprus not only situates these theoretical connections within an emerging destination but also articulates how sustainability may enhance, rather than diminish, perceived luxury service quality in the hospitality industry.

2.2. Sustainable Destination Management

Sustainable destination management refers to the responsible and strategic planning, development, and governance of tourism destinations to attain enduring environmental, social, and economic sustainability [1]. A crucial part of this process is the use of sustainable tourism guidelines, which provide a clear framework and direction [2]. Sustainable destination management encompasses policies and procedures that safeguard natural resources, support local communities, and preserve the destination’s integrity [4,30]. This study operationalized sustainable destination management through indicators such as the existence of these guidelines, infrastructure supporting eco-friendly practices, and community-inclusive planning processes.

2.3. Perceived Luxury Service Quality

Perceived luxury service quality is a concept that empowers visitors. It is their subjective assessment of the excellence and uniqueness of services within a high-end travel environment that matters [6]. This concept encompasses attributes such as responsiveness, excellent amenities, individualized customer care, and the general ambiance of the service area [6]. Operationally, perceived luxury service quality is assessed based on tourists’ perceptions of premium service quality, their comfort levels, the attention to detail, and their satisfaction with service interactions that match or exceed luxury travel benchmarks.

2.4. Perceived Environmental Responsibility

Perceived environmental responsibility refers to tourists’ awareness or acknowledgment of a destination or service provider’s initiatives aimed at mitigating their environmental impact [24]. It illustrates tourists’ perceptions of the company’s commitment to environmental stewardship, evidenced by their recycling initiatives, energy conservation strategies, and sustainable sourcing procedures [25]. In this study, perceived environmental responsibility is operationalized by assessing tourists’ opinions regarding the environmental initiatives promoted by tourism service providers or destination management organizations in public discourse.

2.5. Tourist Environmental Awareness

Tourist environmental awareness refers to the degree of awareness and care that tourists possess regarding environmental issues, particularly those related to tourism [28]. It includes understanding the impact of actions on the environment, promoting a positive disposition towards sustainable practices, and demonstrating a commitment to responsible tourism [29]. To evaluate tourist environmental awareness, we examine tourists’ self-reported understanding of sustainability issues, their concern for environmental protection, and their propensity to select eco-friendly tourism alternatives.

2.6. Hypotheses Development

2.6.1. Relationship Between Sustainable Destination Management and Perceived Luxury Service Quality

Sustainable destination management has emerged as a significant focus within tourism research, particularly due to increasing environmental concerns and the necessity for destinations to ensure long-term viability [31]. Researchers assert that sustainable management practices are crucial for maintaining the competitiveness and attractiveness of tourism locations [32,33]. These initiatives include reducing waste, conserving energy, engaging community participation, and educating individuals about environmental issues. Sustainable destination management has been demonstrated to enhance a destination’s image, foster stakeholder collaboration, and increase tourist satisfaction [34].

Simultaneously, perceived luxury service quality has evolved into a multidimensional construct encompassing tourists’ perceptions of premium travel experiences. Historically, luxury service quality emphasized elements such as upscale hotels, bespoke services, and exclusivity [35]. A recent study suggests that luxury consumption and values-based consumption are converging, encompassing factors such as environmental sustainability and ethical considerations [36]. Tourists are increasingly evaluating service quality not just based on comfort and aesthetics but also on the service provider’s dedication to environmentally sustainable practices [37].

Scholars have noted that luxury and sustainability are no longer mutually exclusive concepts. They are becoming complementary in shaping tourists perceptions, particularly affluent travelers who are environmentally conscious [38,39]. Studies indicate that visitors see eco-certifications, ethical sourcing, and community-based tourism as enhancing the value and prestige of luxury experiences [40,41]. Implementing sustainable destination management concepts in the luxury tourist sector may enhance perceptions of service quality, particularly if environmental responsibility is regarded as a hallmark of sophistication and meticulousness.

Luxury resorts in Northern Cyprus’s emerging tourism industry are incorporating environmental concepts into their primary offerings. Luxury hotels in Kyrenia and Bafra have embraced energy-efficient technologies, implemented greywater recycling systems to cut water consumption, and incorporated ecological landscaping [42]. These events mitigate environmental impacts and enhance participants’ perceptions of sophistication and thoughtfulness. Contemporary luxury transcends mere opulence to encompass ecological sustainability and ethical considerations [43]. Tourists typically see destinations featuring well-managed, environmentally certified hotels, locally sourced cuisine, and impeccably maintained, pristine beaches as offering superior, authentic, and ethical luxury experiences.

When executed well, sustainable destination management harmonizes luxury with purpose, hence enhancing perceived luxury service quality. Tourists are more inclined to associate value with destinations that actively conserve their natural and cultural resources [44]; this alignment enhances their overall satisfaction with the quality of services. The tourism sector in Northern Cyprus mainly comprises ecological resources, including historical sites, indigenous flora, and pristine beaches. Eco-friendly travel surroundings ensure that high-quality hospitality remains pertinent in a competitive global travel landscape [45].

He et al. [46] bring to light the intricate interconnections among service quality, destination social responsibility, and environmental commitment. Their findings reveal a crucial insight: the link between destination social responsibility and employee perspectives on service quality, which in turn influences visitor behavior, is entirely mediated by environmental commitment. This means that poor service quality can negatively impact tourists’ environmentally conscious behavior, but the presence of destination social responsibility can mitigate these effects. This suggests that guests may uphold a positive perception of service quality when they perceive an establishment as socially and environmentally responsible [36], even if specific service encounters fall short of their luxury expectations. This reinforces the enlightening idea that, when effectively implemented, sustainability initiatives can significantly enhance visitors’ views of overall quality, particularly in premium travel contexts where expectations are more intricate and value-oriented.

Similarly, Akroush et al. [47] provide more evidence that service quality is crucial in defining a destination’s image, hence enhancing tourist loyalty to that location. In luxury travel, emotional and symbolic elements significantly influence brand perception and consumer allegiance. Implementing eco-friendly measures in service delivery can enhance the location’s prestige and distinctiveness. When affluent tourists observe services that benefit both the environment and society, they enhance the establishment’s reputation, thus reinforcing notions of quality and ethical responsibility. This link suggests that implementing sustainable destination management, characterized by consistent and high-quality service, may have a significant impact on perceptions of luxury service standards. From the discussion above, the following hypothesis was developed:

H1: 

Sustainable destination management significantly and positively influences perceived luxury service quality.

2.6.2. Relationship Between Sustainable Destination Management and Perceived Environmental Responsibility

The relationship between sustainable destination management and perceived environmental responsibility hinges on the notion that tourists assess a destination’s environmental commitment based on observable eco-friendly practices [48]. When a location actively employs and communicates sustainable management practices, such as conservation initiatives, green infrastructure, and ecological education, tourists are more inclined to perceive it as ecologically responsible [49]. Eco-friendly activities influence this perspective, as does their effective and transparent integration into the destination’s overall administration and service delivery.

This connection is supported by empirical research indicating that the strategic execution of sustainable policies positively influences tourists’ assessments of environmental responsibility. Locations that prioritize waste management, biodiversity conservation, and community engagement often receive elevated ratings from tourists for their ecological responsibility [50]. When such efforts are consistently implemented throughout all facets of the tourism experience, including accommodation, transportation, cultural activities, and dining, these concepts are significantly reinforced. Thus, sustainable destination management serves not only as a managerial approach but also as an indicator for tourists regarding the destination’s commitment to environmental principles.

Sustainable destination management has a significant influence on perceived environmental responsibility, which refers to a destination or service provider’s commitment to conserving the natural environment [4,51,52]. In Northern Cyprus, tourists’ environmental perceptions are significantly shaped by observable indicators of green policy execution: waste sorting bins in public spaces, electric shuttle services provided by resorts, and conservation messages incorporated into hotel communications.

Luxury hotels that explicitly convey their environmental commitments through sustainability reports, in-room digital tablets detailing green projects, or eco-tourism packages focused on nature conservation [53] can enhance their clients’ sense of environmental responsibility. A resort on the Karpaz Peninsula demonstrates environmental integrity by actively supporting the preservation of its marine ecosystem and collaborating with local NGOs to protect endangered species. This enhances visitors’ experience by ensuring their presence does not harm the local ecology, elevating their perception of the site’s moral and sustainable practices.

Through these sustainable management activities, the tourism assets of Northern Cyprus are protected, thereby influencing visitors’ cognitive and emotional perceptions of the island’s environmental ethics. Participants in these events are more likely to perceive the environment as ecologically responsible, which fosters trust, enjoyment, and a desire to return. Sustainable destination management enhances the perception of the environmental responsibility of the destination and elevates the anticipated level of service in luxury environments [4]. This synergistic advantage provides a strategic approach to positioning Northern Cyprus as a responsible and attractive luxury tourism destination where travel is commercially significant yet sustainably conscious.

An empirical study by Su et al. [15] and Su and Swanson [54] suggests that destination social responsibility has a positive influence on overall community well-being, encouraging residents to participate in environmentally sustainable activities and thereby enhancing their perception of positive visitor impacts. The hypothesis that destination social responsibility diminishes tourism was not supported. Favorable tourism impacts and overall community contentment thus contribute to mitigating the influence of destination social responsibility on residents’ environmentally responsible conduct. From the discussion above, we hypothesized the following:

H2: 

Sustainable destination management significantly and positively influences perceived environmental responsibility.

2.6.3. Relationship Between Perceived Environmental Responsibility and Perceived Luxury Service Quality

Perceived environmental responsibility refers to guests’ recognition of a hospitality provider’s commitment to environmental stewardship, encompassing explicit initiatives to promote sustainable practices, reduce pollution, and conserve resources, as well as visible actions to mitigate waste [4,51,55]. In luxury hospitality, this perspective is increasingly influencing the evaluation of service quality, as contemporary luxury is often associated with experiences that are ethical, socially responsible, and environmentally sustainable [56].

The traditional notion of luxury emphasized distinctive attributes, abundant resources, and personalized attention. Contemporary tourists, particularly those with sustainable consciousness, now associate luxury with responsibility and mindfulness [57]. Tourists perceive luxury hotels and resorts as enhancing the value and sophistication of the service experience when they explicitly integrate sustainable practices such as minimizing single-use plastics, employing energy-efficient systems, sourcing organic local produce, and endorsing conservation initiatives.

Luxury hotels that exhibit significant environmental awareness are more likely to be perceived positively in terms of service quality in Northern Cyprus, where tourism is intrinsically linked to natural beauty and a concern for sustainability. Tourists who discover that their resort promotes biodiversity conservation or renewable energy often have a more profound emotional and ethical connection with the service provider, leading to more positive assessments of the services [58].

Furthermore, perceived environmental responsibility can endorse concepts of authenticity and ethics within the luxury experience [59]. Tourists seek hospitality organizations that demonstrate a steadfast and transparent commitment to sustainability since they are increasingly skeptical of superficial “greenwashing.” When this commitment is genuine and distinctly demonstrated, the essential elements of perceived luxury service quality—trust, satisfaction, and brand loyalty, are reinforced [60].

Lee et al. [14] revealed that the disparity between performance and normative expectations accounts for less variation in overall service quality than performance alone. Moreover, the evidence suggests that perceived service quality precedes satisfaction rather than the other way around. Their results further indicated that physical factors are more significant in facility and equipment-based enterprises, but responsiveness is a more vital element in people-oriented industries. From the discussion above, the following hypothesis was developed:

H3: 

Perceived environmental responsibility significantly and positively influences perceived luxury service quality.

2.6.4. Relationship Between Tourist Environmental Awareness and Perceived Luxury Service Quality

The relationship between tourist environmental awareness and perceived luxury service quality has garnered increasing academic attention, particularly in the context of sustainable tourism. Han et al. [36] describe tourist environmental consciousness as an individual’s awareness, concern, and actions related to environmental preservation. Empirical research indicates that environmentally concerned travelers associate luxury not only with affluence but also with ethical and sustainable tourism [13]. Tourists are more inclined to see the quality of services positively when service providers align with their environmental values.

Environmental awareness appears to affect service ratings, as Han and Hyun [61] found that environmentally concerned clients exhibited greater pleasure and loyalty towards green hotels that demonstrated clear sustainability initiatives. Similarly, Khairy et al. [62] discovered that tourists’ environmental awareness enhances the perceived value of green luxury services, as these clients appreciate amenities such as sustainable sourcing, renewable energy utilization, and eco-friendly design. The Stimulus–Organism–Response hypothesis establishes a connection between human awareness (the organism) and the processing of environmental inputs (the stimulus) to produce evaluative judgments (the response) akin to perceived luxury service quality. Consequently, tourist environmental awareness is an essential psychological framework for assessing luxury service interactions.

Paul and Roy [63] reported that visitor satisfaction was significantly influenced by the quality of ecological services, which in turn enhanced participation in educational programs, visits, and referrals. Additionally, their finding indicated that visitors’ propensity to revisit ecotourism destinations is significantly affected by their environmental awareness. Furthermore, eco-activity-based learning significantly diminishes the correlation between eco-tangible quality (environmentally safe physical amenities provided in ecolodges or hotels) and tourist satisfaction.

H4: 

Tourist environmental awareness significantly and positively influences perceived luxury service quality.

2.6.5. Mediating Role of Perceived Environmental Responsibility

The relationship between sustainable destination management and perceived luxury service quality fundamentally relies on perceived environmental responsibility. Sustainable destination management factors would not directly influence tourists’ perceptions of luxury unless perceived as indicators of environmental responsibility [62].

When tourists prioritize sustainability, destinations appear environmentally responsible. This impression highlights the luxurious portrayal of the services provided at that location. According to Han et al. [48], ethical and environmental consciousness is transforming contemporary luxury beyond mere consumerism. A significant determinant affecting tourists’ evaluation of perceived luxury service quality and reputation is their perception of the environmental stewardship commitment of a location and its service providers [51]. Notable tourism destinations in Northern Cyprus’s hospitality sector include historical coastal sites and ecologically sensitive areas such as the Karpaz Peninsula.

Consequently, sustainable destination management projects, which involve investments in green infrastructure, eco-certification for hotels, and the establishment of marine conservation zones, are prevalent. Nonetheless, their impact on the perception of luxury service quality may remain limited unless these initiatives are demonstrated to guests as environmentally sustainable [58]. A luxury resort that implements “green guest programs” (such as linen reuse, organic amenities, and plastic-free dining) enhances its sustainability credentials and premium reputation, especially when visitors perceive these initiatives as vital to the hotel’s environmental integrity.

Empirical evidence substantiates this relationship. A study by Martínez and del Bosque [47] revealed that perceived corporate social and environmental responsibility positively influences service satisfaction and perceived luxury service quality in hotels. Further, Chen and Peng [58] demonstrated that perceived environmental responsibility significantly diminishes the relationship between green practices and perceived value in luxury hotel services, suggesting that environmental responsibility enhances trust and elevates customer service perception.

Perceived environmental responsibility serves as a cognitive relationship, facilitating the translation of overarching sustainable destination management goals into guest experiences that align with their expectations for luxury, sustainability, and ethics. This is particularly significant in regions such as Northern Cyprus, where environmental preservation relies on sustainable tourism, which concurrently enhances the long-term competitiveness of luxury travel offerings. From the discussion above, the following hypothesis was developed:

H5: 

Perceived environmental responsibility mediates the relationship between sustainable destination management and perceived luxury service quality.

2.6.6. The Moderating Role of Tourist Environmental Awareness

Tourist environmental awareness encompasses an individual’s understanding, concern, and values regarding ecological issues, hence influencing their evaluation and perspective on sustainable travel activities [64]. In luxury hotel settings, where expectations are complex and evolving, tourist environmental awareness shapes the dynamics and direction of interactions among sustainable destination management, perceived ecological responsibility, and perceived luxury service quality.

Prior studies, such as Li et al. [65] and Lin et al. [66], have examined environmental awareness as a mediating variable. This study examines it as a moderator within the Stimulus–Organism–Response (S-O-R) framework. This concept posits that individual characteristics influence the processing of information and subsequent outcomes [11]. Tourists possess an inherent awareness of the environment, independent of the presence of eco-friendly regulations. It is more logical to see it as a boundary condition that influences the strength of the relationships among perceived environmental responsibility, perceived luxury service quality, and sustainable destination management. Prior applications of the Stimulus–Organism–Response paradigm in tourism highlight that individual differences are significant contributors [36,64]. This enables a more thorough insight into tourists’ responses to environmental initiatives.

Sustainable destination management strategies, such as low-impact infrastructure, local procurement, and ecosystem preservation, could enhance tourists’ perceptions of luxury service quality [67]. The extent to which these strategies enhance perceived luxury service quality impressions is contingent upon the individual’s moral standards. Individuals with heightened environmental awareness are more inclined to recognize and appreciate sustainable initiatives, perceiving them as enhancements to the luxury experience [57,68]. Conversely, low tourist environmental awareness may lead tourists to disregard or undervalue environmental initiatives if they perceive them as merely superficial concessions rather than enhancements of luxury [29].

Environmentally conscious tourists who select green-certified resorts near natural reserves, such as the Karpaz Peninsula in Northern Cyprus, tend to perceive environmentally managed places as technically and ethically superior, thereby enhancing their perception of service quality [53]. If tourists prioritize traditional luxury indicators over environmental factors, individuals who neglect environmental issues may assess the same service less positively [64]. Tourist environmental awareness thus aligns sustainability with luxury standards, thereby enhancing the positive correlation between sustainable destination management and the perceived luxury service quality.

Similarly, for environmentally conscious tourists, the influence of perceived environmental responsibility on the assessment of perceived luxury service quality intensifies [51,69]. Customers, as essential components of luxury service quality, are more inclined to evaluate a hotel provider’s environmental performance, including carbon neutrality, waste reduction, and support for biodiversity [58]. Tourists with high environmental awareness perceive these gestures as manifestations of concern, individuality, and contemporary sophistication. Still, low environmental awareness among tourists may lead them to remain indifferent or regard these behaviors as superfluous or pretentious [70].

In luxury hotels in Northern Cyprus, particularly in ecologically sensitive regions, visitors’ environmental awareness levels may influence perceptions of eco-friendly initiatives, such as the provision of biodegradable amenities or the implementation of digital technology to reduce paper consumption. These initiatives can enhance the luxury brand image for those with significant environmental concerns by aligning with personal values, hence augmenting satisfaction and brand loyalty [71,72]. Conversely, tourists with low environmental awareness may see little added value, diminishing the anticipated impact of ecologically sustainable initiatives.

Empirical evidence substantiates this behavioral moderation. According to Kang et al. [71], environmentally conscious consumers exhibited more satisfaction and stronger loyalty intentions, particularly in response to eco-friendly initiatives at luxury hotels. Similarly, Han et al. [68] emphasized how tourists’ environmental consciousness differentiates their cognitive evaluations of luxury in terms of sustainability.

Consequently, the environmental awareness of tourists is a crucial determinant influencing the feasibility of sustainable hotel initiatives. Understanding the diverse environmental values of tourists is essential in luxury tourism contexts, such as Northern Cyprus, to align destination management strategies and service provision with evolving perceptions of luxury. From the discussion above, the following hypotheses were developed:

H6: 

Tourist environmental awareness moderates the relationship between sustainable destination management and perceived luxury service quality.

H7: 

Tourist environmental awareness moderates the relationship between perceived environmental responsibility and perceived luxury service quality.

The formulation of the hypotheses and the literature review (Figure 1) established the study model presented below:

3. Materials and Methods

3.1. Research Approach and Design

This study used a positivist, quantitative, cross-sectional approach to investigate the relationships among the specified variables of sustainable destination management, perceived environmental responsibility, perceived luxury service quality, and tourist environmental awareness. The quantitative approach employs statistical methods to establish relationships between variables, whereas the positivist paradigm facilitates objective measurement and hypothesis testing using empirical data [73,74,75]. Utilizing a cross-sectional approach to collect tourist perceptions and attitudes at a particular moment is appropriate. It may clarify the impact of sustainable practices on luxury service evaluations within the hospitality industry in Northern Cyprus. This strategy enhances the generalizability, reliability, and potential for replication in analogous hospitality settings.

3.2. Study Context and Participants

The target population comprises international tourists who visited Northern Cyprus and experienced exceptional hospitality services throughout their stay. Only tourists utilizing luxury tourism services were included, as their insights are invaluable for understanding sustainable destination management and the quality of premium services. Respondents were required to be a minimum of 18 years old, tourists who were not residents or hotel personnel and had recently utilized luxury tourism services in Northern Cyprus, possessing proficiency in reading and writing in English. This criterion was set to ensure that all respondents could understand and respond to the survey questions effectively. Excluded categories included individuals under eighteen, non-tourists, residents, hotel personnel, and those unfamiliar with luxury or eco-friendly travel experiences.

3.3. Sample Size Determination Sampling Technique

We determined the appropriate sample size by employing the 10-times rule recommended for partial least squares structural equation modeling (PLS-SEM) [76]. With 22 items, the perceived luxury service quality construct is included in most indications. The sample size must be a minimum of 10 times the most significant number of indicators associated with any single endogenous component, necessitating at least 220 responses. To enhance statistical power and generalizability, a total of 1560 questionnaires were distributed. Despite distributing 1560 questionnaires, incomplete and inconsistent responses were eliminated during data input to ensure data integrity for precise statistical analysis. After data cleaning, 541 valid responses were retained, resulting in a response rate of 34.68% or higher.

We employed a purposive sampling strategy to intentionally identify tourists with relevant experiences. Purposive sampling was not random; it effectively identified those who have utilized premium travel services emphasizing sustainability. To eliminate bias in the sample, data were gathered at various times of day from a diverse array of luxury hotels, resorts, and prominent tourist sites in Northern Cyprus. The polled individuals were globally diverse, encompassing all ages, genders, and nations.

3.4. Data Collection Procedure

The data were gathered between July and September 2024. Before data collection, the research team obtained consent from hotel and restaurant managers to utilize lobbies, lounges, and waiting areas for participant recruitment. Participants engaged in face-to-face discussions and received a brief overview of the study’s objective. Individuals who consented were provided with a standardized questionnaire to complete independently. Researchers were available to address questions during the surveys, resulting in a high completion rate and enhanced data quality. We exclusively recruited those proficient in English to ensure comprehension and correct responses. Following a briefing on the study’s objectives, each respondent was provided with an informed consent form that detailed their participation, confidentiality, and, importantly, the protection of their anonymity. The research received approval from the university’s Research Ethics Approval Board.

3.5. Measurement

This study measured the variables utilizing validated scales that have been previously assessed and derived from existing literature. A five-point Likert scale, with 1 representing “Strongly Disagree” and 5 representing “Strongly Agree,” was employed to evaluate each item [77]. Appendix A has a comprehensive list of all items. To assess sustainable destination management we adopted the unidimensional scale with 17 items developed by Khan et al. [4]. These items reflect essential elements of sustainable tourism governance: environmental management, stakeholder collaboration, infrastructure development, and promotion of sustainable travel. Considering the island’s increasing focus on tourism development within a fragile natural ecosystem, whose long-term viability relies on sustainable planning and location-specific regulations, the scale is optimal for Northern Cyprus.

Perceived luxury service quality, a multidimensional construct comprising two dimensions—tangibility and intangibility—was measured using a 22-item scale. This scale was developed by Nadiri and Hussain [7], who initially designed and explicitly evaluated it for hotels in Northern Cyprus. This scale is particularly relevant for assessing luxury service experiences in the sector, as it identifies just two principal variables: tangible aspects (e.g., facilities, décor, and cleanliness) and intangible factors (e.g., personnel competency, personal attention, and trust).

This study employs the unidimensional scale with five items developed by Khairy et al. [62] to evaluate tourists’ perceptions of the level of environmental responsibility exhibited by hotel service providers, using perceived ecological responsibility as a unidimensional construct. These items are suitable for evaluating the impact of such impressions on perceived luxury service quality ratings, considering Northern Cyprus’s efforts to enhance its environmental image amid increased global assessment.

Developed by Tavitiyaman et al. [13], the unidimensional two-item scale was adopted to assess tourist environmental awareness. These measures encapsulate the personal awareness and apprehension of guests regarding environmental issues associated with their vacation activities. Their presence is justified in the context of Northern Cyprus, where a growing contingent of environmentally aware visitors from Europe and other nations is advocating for a shift towards responsible and sustainable tourism options.

This study considered income level as a control variable, as it significantly affects customers’ perceptions of luxury and sustainability in hotel environments. Individuals with higher incomes are more inclined to appreciate and purchase sustainable luxury goods, which can affect their perceptions of service quality and expectations [61]. Moreover, income is often linked to environmental awareness, since affluent individuals typically have greater access to resources and information that promote pro-environmental behaviors [78]. The fixed income level ensured that economic disparities among respondents did not influence the observed relationships among the study variables.

The utilization of these adapted and contextually pertinent measures ensures that the study accurately reflects the perspectives, experiences, and values of visitors within the evolving luxury hotel landscape of Northern Cyprus.

3.6. Data Analysis Tools

Initial evaluations were performed utilizing SPSS version 23; the structural model was analyzed with SmartPLS version 4.1.1.2. Descriptive statistics, assessment of missing data, and initial screening in SPSS ensured data accuracy and readiness for subsequent modeling [76]. Utilizing SmartPLS in exploratory research—where theoretical frameworks are still evolving—is suitable for evaluating complex models with both reflective and formative attributes [79] and facilitated the study’s direction. The utilization of partial least squares structural equation modeling (PLS-SEM) will significantly aid studies aimed at predicting correlations and assessing mediation and moderation effects across numerous indicators [80]. Moreover, PLS-SEM is particularly suited for focusing on sustainable destination management and luxury service quality in the Northern Cyprus hotel industry, since it effectively manages non-normal data and small to medium sample sizes.

4. Results

4.1. Demographic Information of Respondents

Table 1. Demographic information of respondents.

Demographic Characteristics	Frequency	Percentage (%)
Gender
Male	310	57.3
Female	231	42.7
Age
18–24	48	8.9
25–35	245	45.3
36–45	160	29.6
>45	88	16.3
Education Level
High School	73	13.5
Diploma	212	39.2
Degree	189	34.9
Master	67	12.4
Tourism Experience (in years)
<5	95	17.6
5–10	183	33.8
10–15	162	29.9
>15	101	18.7
Monthly Income (USD)
<USD 1000	296	54.7
USD 1000 to <USD 2000	144	26.6
USD 2000 to <USD 4000	77	14.2
USD 4000 or more	24	4.4

highlights the demographic characteristics of the 541 study participants. It encompasses data regarding gender, age, education, travel experience (as tourists), and monthly income. Although the majority of respondents, 57.3%, were male, the data indicate that females constituted 42.7% of the sample. Regarding age distribution, 29.6% of the cohort was aged between 36 and 45 years, while 45.3% were aged between 25 and 35 years. Individuals aged 18 to 24 constituted 8.9%; those over 45 years accounted for 16.3%. This indicates a predominantly young to middle-aged demographic of respondents. The educational attainment suggests that a significant portion of participants possessed a diploma (39.2%) or a degree (34.9%), reflecting a well-educated populace. A total of 13% of the respondents were high school graduates, and 12.4% possess a master’s degree. Travel experience of 5–10 years constituted the most significant percentage, at 33.8%, among all categories. Approximately 29.9% possessed 10 to 15 years of expertise, while 18.7% reported having above 15 years. Travel experiences of less than five years constituted a mere 17.6% of the sector. This indicates that the majority of respondents are experienced travelers. Fewer than half of the respondents (54.7%) reported earning less than USD 1000 each month. Only 4.4% earned more than USD 4000; 14.2% received between USD 2000 and USD 4000; and approximately 26.6% earned between USD 1000 and USD 2000. This indicates predominantly low- to middle-income levels.

4.2. Measurement Model

Researchers have noted that reporting model fit indices are unnecessary in PLS-SEM due to its predictive nature [76,81]. Subsequently, we assessed the measurement model according to established PLS-SEM protocols, focusing on discriminant validity, convergent validity, and reliability.

4.2.1. Validity and Reliability

Utilizing SMART-PLS version 4, confirmatory factor analysis (CFA) was employed to assess the validity and reliability of the measurement model, as shown in

Table 2. Validity and reliability test.

Construct and Items	Standardized Loadings	Cronbach’s Alpha	CR	AVE
Sustainable Destination Management
STDMGT1	0.860	0.967	0.969	0.646
STDMGT2	0.884
STDMGT3	0.781
STDMGT4	0.789
STDMGT5	0.790
STDMGT6	0.787
STDMGT7	0.794
STDMGT8	0.887
STDMGT9	0.777
STDMGT10	0.873
STDMGT11	0.786
STDMGT12	0.781
STDMGT13	0.779
STDMGT14	0.828
STDMGT15	0.724
STDMGT16	0.734
STDMGT17	0.783
Perceived Luxury Service Quality
TAN1	0.954	0.969	0.977	0.915
TAN2	0.971
TAN3	0.930
TAN4	0.970
INTAN1	0.751	0.953	0.958	0.606
INTAN2	0.770
INTAN3	0.755
INTAN4	0.722
INTAN5	0.807
INTAN6	0.828
INTAN7	0.794
INTAN8	0.809
INTAN9	0.793
INTAN10	0.689
INTAN11	0.819
INTAN12	0.792
INTAN13	0.755
INTAN14	0.776
INTAN15	0.804
Perceived Environmental Responsibility
PER1	0.958	0.975	0.980	0.909
PER2	0.966
PER3	0.916
PER4	0.959
PER5	0.968
Tourist Environmental Awareness
TEA1	0.966	0.928	0.965	0.933
TEA2	0.967

Sustainable destination management (STDMGT), tangibility (TAN), intangibility (INTAN), perceived environmental responsibility (PER), and tourist environmental awareness (TEA).

and Figure 2. Cronbach’s alpha scores, ranging from 0.928 to 0.975, exceeded the recommended threshold of 0.70, indicating robust internal consistency according to Hair et al. [76] and Obeng et al. [82]. The composite reliability (CR) scores ranged from 0.965 to 0.980, indicating high reliability and hence affirming the robustness of the construct [83,84]. The average variance extracted (AVE) values were above the minimum acceptable threshold of 0.50 [85,86], ranging from 0.606 to 0.909. This resulted in the convergence of validity. Moreover, it indicates a robust level of reliability [76], with item loadings exceeding 0.650. Three items (INTAN16, INTAN17, and INTAN18) from the intangible component of perceived luxury service quality fell below the recommended loading threshold and were consequently excluded from the final analysis to maintain model consistency. These procedures ensured the psychometric integrity of the measurement model, hence enhancing the validity of the results.

4.2.2. Discriminant Validity

Discriminant validity was assessed using the heterotrait–monotrait ratio of correlations (HTMT), a more reliable and accurate criterion than traditional methods, such as the Fornell–Larcker criterion or cross-loadings [83].

Table 3. Discriminant validity: heterotrait–monotrait (HTMT) correlations.

Item	INTAN	PER	STDMGT	TAN	TEA	TEA × STDMGT	TEA × PER
INTAN
PER	0.144
STDMGT	0.073	0.474
TAN	0.047	0.579	0.449
TEA	0.03	0.55	0.442	0.685
TEA × STDMGT	0.042	0.462	0.286	0.432	0.433
TEA × PER	0.041	0.559	0.359	0.524	0.427	0.736

presents the HTMT results, all of which are significantly below the stringent threshold of 0.85, indicating adequate discriminant validity among the components. The HTMT values between perceived environmental responsibility and the dimensions of perceived luxury service quality—tangibility (TAN = 0.579) and intangibility (INTAN = 0.144)—are below the threshold, indicating that each construct represents a distinct aspect of the conceptual framework. Similarly, the HTMT values for interactions (e.g., TEA × PEC = 0.559 and TEA × STDMGT = 0.462) meet the requirement, reinforcing the notion that moderation categories are experimentally distinct. The findings confirm that the measurement model exhibits robust discriminant validity, hence ensuring empirical non-redundancy and theoretical distinctiveness [76].

4.3. Structural Model Assessment

4.3.1. Effect Size and Collinearity Test

Table 4. Multicollinearity and effect size results.

Path/Indices	VIF	f-Square
PER → PLSQ	1.815	0.059
STDMGT → PER	1.000	0.332
STDMGT → PLSQ	1.476	0.022
TEA → PLSQ	1.559	0.192
TEA × PER → PLSQ	2.563	0.027
TEA × STDMGT → PLSQ	2.299	0.001

presents the effect size (f²) and inner variance inflation factor (VIF) statistics to assess potential multicollinearity issues and the significant impact of each construct. Hair et al. [76] categorize small, medium, and large effects as f² values of 0.02, 0.15, and 0.35, respectively. This study demonstrates a substantial effect size (f² = 0.332) between sustainable destination management and perceived environmental accountability, indicating that sustainability practices at the destination level have a significant influence on tourists’ perceptions of environmental accountability. The moderating variable, tourist environmental awareness, exhibits a medium effect on perceived luxury service quality. The relationships between perceived environmental responsibility and perceived luxury service quality (f² = 0.059) and the interaction of tourist environmental awareness and perceived environmental responsibility demonstrate moderate yet significant effects. The minimal effect size of tourist environmental awareness x sustainable destination management (f² = 0.001) indicates negligible moderating effects in that specific pathway. Concerning multicollinearity, all VIF values are far below the 3.3 threshold, suggesting that collinearity does not induce any structural model issues [87,88]. The VIF value of 2.562 recorded for the interaction between tourist environmental awareness and perceived environmental responsibility underscores the reliability of the model projections and remains within acceptable limits.

4.3.2. Predictive Relevance (Q²) and Explanatory Power (R²)

Table 5. Coefficient of determination (R²) and predictive relevance (Q²) results.

Construct/Indices	Q2	R2
PER	0.242	0.249
PLSQ	0.421	0.512

presents the predictive relevance (Q²) and explanatory power (R²) of the significant endogenous constructs within the model. While the R² values indicate that sustainable destination management explains 24.9% of the variance in perceived environmental responsibility, the combination of sustainable destination management, perceived environmental responsibility, and tourist environmental awareness accounts for 51.2% of the variance in perceived luxury service quality. Hair et al. [76] categorize R² values of 0.25, 0.50, and 0.75 as weak, moderate, and substantial, respectively. Consequently, particularly for perceived luxury service quality, the model demonstrates a modest to significant level of explanatory power. Additionally, Q² values obtained by the blindfolding method assess the model’s predictive relevance; values exceeding zero signify relevance [89,90]. This analysis reveals that the Q² values for perceived environmental responsibility (0.242) and perceived luxury service quality (0.421) exceed the minimum criterion, hence confirming the robust predictive accuracy and significance of the model for both constructs.

4.3.3. Common Method Bias

We examined common method bias (CMB) utilizing Harman’s single-factor test (HSFT), as illustrated in Appendix B. The unrotated factor analysis indicated that the first component represented 32.607% of the total variance, which is below the recommended threshold of 50% [91]. This suggests that common method bias is not a significant concern in this study.

4.4. Hypotheses Testing

According to Hair et al. [76], hypothesis testing (see

Table 6. Hypotheses’ test results.

Hypothesis	Path	β	Standard Deviation	T-Value	p Values	Remarks
H1	STDMGT → PLSQ	0.125	0.048 **	2.590	0.010	Supported
H2	STDMGT → PER	0.499	0.043 ***	11.621	0.000	Supported
H3	PER → PLSQ	0.228	0.054 ***	4.235	0.000	Supported
H4	TEA → PLSQ	0.382	0.062 ***	6.143	0.000	Supported
H5	STDMGT → PER → PLSQ	0.114	0.030 ***	3.816	0.000	Supported
H6	TEA × STDMGT → PLSQ	0.019	0.059	0.325	0.745	Not Supported
H7	TEA × PER → PLSQ	−0.128	0.056 **	2.272	0.024	Supported
Control	MY → PLSQ	−0.010	0.032	0.325	0.745

*** p < 0.01, ** p < 0.05, and MY—monthly income.

and Figure 3) of the structural model was conducted using the bootstrapping technique with 5000 resamples at a 5% significance threshold. Seven opportunities were evaluated. Sustainable destination management has a direct impact on perceived luxury service quality (β = 0.126, p < 0.05), hence supporting H1. Additionally, H2, sustainable destination management has a positive and significant influence on perceived environmental responsibility (β = 0.499, p < 0.01).

Further, perceived environmental responsibility has a positive and significant impact on perceived luxury service quality (β = 0.224, p < 0.01), thereby corroborating H3. Furthermore, tourist environmental consciousness has a substantial and positive influence on perceived luxury service quality (β = 0.385, p < 0.01), thereby corroborating H4. The validation of H5 indicates that perceived environmental responsibility partially mediates the relationship between sustainable destination management and perceived luxury service quality (β = 0.112, p < 0.05), thereby supporting H5.

Tourist environmental awareness exhibited no significant moderating effect on the relationship between sustainable destination management and perceived luxury service quality (H6), with (β = 0.019, p = 0.745). Therefore, we reject H6. Conversely, tourist environmental awareness significantly moderated the relationship between perceived ecological responsibility and perceived luxury service quality, though in a negative direction (β = −0.128, p <0.05), confirming (H7). This study confirms six of the seven anticipated hypotheses.

The results of the control variable monthly income (MY) revealed a negative insignificant effect on perceived luxury service quality with (β = −0.010, p = 0.745) (Appendix C shows the path model). The assessment of income revealed that a tourist’s perception of luxury service quality was mostly unchanged by their income level. The negative sign suggests a little propensity among higher-income individuals to assign lower ratings to luxury services; nevertheless, this tendency is not sufficiently strong and consistent to draw definitive conclusions, as the effect is not statistically significant. The affluence of the examined group minimally influenced perceptions of premium service quality.

5. Discussion

This study contributes to the growing body of evidence that psychological mechanisms, including sustainable destination management and perceived environmental responsibility, influence perceived luxury service quality. The Stimulus–Organism–Response Theory posits that sustainability initiatives at the destination level serve as external stimuli that affect tourists’ internal evaluations, hence influencing their perception of service quality. The findings indicate that tourist environmental awareness significantly enhances and moderates the understanding of how individual differences affect the impact of sustainability on luxury service experiences.

The analysis corroborated H1, revealing a significant and positive association between sustainable destination management and perceived luxury service quality. This outcome underscores that effectively managed sustainability initiatives at the destination level can enhance the perceived quality among affluent guests. This aligns with previous research indicating that visitors prioritize ethical management and environmental awareness over comfort and exclusivity [36,92,93]. The findings substantiate the Stimulus–Organism–Response Theory by demonstrating how external cues, such as destination practices, influence visitors’ cognitive processing and evaluative assessments [11,94].

This indicates that Northern Cyprus’s hotel management and tourism planners should regard sustainability as a strategic asset rather than a secondary concern. Policies that enhance visitors’ perceptions of service quality encompass green building standards, eco-certification, community-focused tourism initiatives, and environmental conservation efforts. These techniques attract environmentally conscious tourists and foster sustained brand distinctiveness and competitiveness in the global tourist market.

Additionally, H2 was verified, demonstrating a robust and positive correlation between sustainable destination management and perceived environmental responsibility. This substantiates the notion that sustainable behaviors at the destination level affect tourists’ cognitive and emotional states, as well as their perceptions of the environment. The findings align with previous research, which demonstrates that when guests encounter visible and credible environmental initiatives—such as recycling systems, conservation programs, or sustainable architectural designs—they develop an increased awareness of ecological concerns and their responsibilities as conscientious tourists [4,13]. Tourists’ environmental consciousness is primarily influenced by contextual clues and environmental stimuli provided by their surroundings rather than solely by personal ideals.

This outcome underscores the vital importance of openness and transparency for societal advancement. Destination operators and hotels should incorporate educational and participatory elements into sustainability programs, including guided eco-tours, clean water initiatives, and energy conservation methods, along with engaging guest experiences. These tactics enhance visitors’ environmental awareness and foster a deeper emotional and psychological connection with the location, thereby building long-term loyalty and positive word-of-mouth.

The findings of the study confirmed that consumers identifying as environmentally aware are more inclined to assign favorable ratings to luxury-quality services (H3). This outcome aligns with findings from earlier research, including Khairy et al. [62] and Han et al. [61], which indicate that the environmental self-concept significantly affects visitors’ perceptions and evaluations of service experiences, particularly when these services align with their environmental ideals. In essence, environmentally aware tourists are more likely to evaluate services based on their sustainability, ecological impact, or ethical considerations.

Internalizing environmental responsibility enhances tourists’ awareness of sustainability indicators in the service environment [51,95,96], thereby improving their assessments, particularly of the perceived quality of luxury services. This illustrates how value congruence between service offerings and the environmental self-concept of visitors may enhance perceived quality and pleasure.

This underscores the necessity of integrating sustainable practices not only for environmental compliance but also as a strategy to enhance perceptions of service quality [97,98]. The promotion of eco-volunteering, green loyalty programs, or sustainable dining alternatives enables hotels, resorts, and other luxury service providers to align with guests’ environmental identities. Minor gestures, such as providing customers with reusable water bottles or offering carbon offset options at the register, reinforce their ecological beliefs, thus enhancing their perception of service quality and fostering repeat business.

Significant evidence suggests that tourists’ environmental awareness significantly enhances the perceived quality of luxury services. This aligns with findings by Tavitiyaman et al. [13] and Han et al. [36], indicating that environmentally conscious travelers value premium services that prioritize sustainability more highly. Individuals possessing greater environmental awareness generally perceive sustainability as an essential element of quality in premium contexts, where ethical consumption is anticipated rather than merely advantageous. The findings indicate that individual environmental attitudes substantially influence service evaluations, particularly when those services align with ecologically beneficial objectives.

Tourist environmental consciousness is the human propensity or internal structure that influences tourists’ perceptions of sustainability indicators integrated into premium service experiences [99,100]. Rather than simply accepting sustainability initiatives, environmentally concerned visitors proactively seek, identify, and evaluate them based on their values [101]. The outcome highlights the importance of individual attributes in shaping perceptions and interpretations of external stimuli, including sustainable practices.

This outcome provides luxury service providers in Northern Cyprus and neighboring counties with valuable guidance. Businesses must adhere to eco-friendly standards and ensure that their efforts are prominently visible to esteemed guests. Local sourcing, environmental certifications, and carbon reduction strategies must be prioritized in marketing efforts. Customizing the message to resonate with travelers’ ideals through website content, brochures, and staff training will significantly enhance the impression of environmentally conscious guests regarding the services. For instance, this could include offering ecologically conscious tours and sustainable dining options, or facilitating energy conservation initiatives through in-room amenities.

The study’s findings revealed that perceived environmental responsibility acts as a partial mediator between sustainable destination management and perceived luxury service quality, thereby supporting H5. This outcome corroborates [102], which suggested that ecologically conscious and sustainable practices at the location enhance tourists’ understanding, thereby affecting their assessment of luxury product quality.

This result aligns with [64], which asserts that environmentally responsible guests appreciate services that correspond with their ideals to a greater extent. In this context, perceived environmental responsibility is seen as a cognitive-emotional mechanism that transforms external sustainability signals into valuable evaluations of service quality [103]. The presence of this mediator underscores the significant role that tourists’ values and environmental identities play in comprehending and responding to sustainable tourism experiences.

From a managerial standpoint, this suggests that sites must go beyond merely implementing sustainable solutions. Transparent and proactive communication will facilitate tourists’ identification and engagement with these projects. Signage, narrative, staff engagement, and digital tools should all work together to present the location’s environmental commitments effectively. Promoting participation in sustainability-related events, such as eco-tours, recycling programs, or community preservation projects, will enhance tourists’ ecological awareness. Tourists who perceive themselves as engaged participants in sustainability initiatives are more likely to evaluate services positively, thereby improving the overall attractiveness and competitiveness of the destination within the hospitality sector.

The results of the study revealed that tourist environmental awareness had a minimal impact on the relationship between sustainable destination management and perceived luxury service quality; therefore, H6 was not supported. This outcome contradicts previous research, such as De Nardo et al. [104], which emphasizes the influence of personal beliefs on the interpretation and perception of sustainability signals.

Several explanations may account for this unexpected result. The sustainability policies of the location may lack the clarity or distinctiveness necessary to elicit varied responses from environmentally concerned tourists. Individuals with strong environmental values may deem sustainable programs ineffective if they appear superficial or generic [105], diminishing their moderating impact. Conversely, environmentally conscious tourists may adopt a more critical stance or require robust, third-party-verified sustainability initiatives before allowing such practices to enhance their evaluation of service quality.

These findings underscore the necessity of credibility and visibility in sustainable communication. Hotels and enterprises in Northern Cyprus must go beyond mere symbolic gestures and undertake substantial, transparent environmental initiatives. Third-party certifications (such as Green Key and EarthCheck), comprehensive sustainability reporting, and engaging educational opportunities enhance authenticity and foster trust. Individuals with heightened environmental awareness are more likely to positively adjust their perceptions of luxury service quality when they recognize that a site’s sustainability initiatives are genuine and seamlessly integrated into the service ecosystem.

Notably, H7 received support but exhibited an adverse moderating effect, indicating that as tourist environmental awareness increased, the positive correlation between perceived environmental responsibility and perceived luxury service quality weakened. A plausible explanation for this outcome lies in consumer skepticism and behavioral value. Environmentally conscious tourists typically uphold rigorous criteria for authentic and certified sustainable practices [106,107]. They may exhibit skepticism when a destination’s environmental responsibility fails to align with its real practices, due to insufficient transparency, lack of engagement, or superficial activities [108]. Individuals may doubt the assurances of sustainability [109,110] or the motivations underlying them. This may engender skepticism over the destination’s environmental stance, potentially resulting in diminished service quality ratings.

Tourists who prioritize sustainability do not consistently demonstrate it through exemplary behavior or evaluations, particularly when they perceive a discrepancy between promises and actual practices [111,112]. In this context, environmentally conscious tourists may perceive environmental responsibility as mere rhetoric or greenwashing if they do not observe, trust, and feel genuine sustainability.

This implies that, in addition to using sustainable practices, travel agencies in Northern Cyprus and similar locations must also be forthright and truthful about them. Third-party eco-certifications, comprehensive sustainability reports, employee participation in green initiatives, and environmentally conscious activities for guests are methods to bridge the disparity between tourists’ perceptions of environmental responsibility and their fundamental awareness thereof. This will diminish distrust and enhance service quality evaluations. Environmentally conscious tourists should see that their values are acknowledged and integrated into their luxury travel experience.

6. Theoretical Implications

This study contributes to theoretical frameworks in three significant aspects. It transcends mere novelty to provide substantive refinements to the Stimulus–Organism–Response model [11] within the domain of sustainable luxury tourism. This study expands on the concept of “perceived environmental responsibility” as a significant organismic variable linking external influences (sustainable destination management) to assessments of responses (perceived luxury service quality). Previous research such as Han et al. [36] and Lee et al. [64] examined general environmental attitudes or values during the organismic stage. This study employs “perceived environmental responsibility” as a more immediate and dynamic psychological construct to illustrate how tourists integrate sustainability cues into a particular context. This is a theoretical advancement as it enhances the “organism” component of the Stimulus–Organism–Response framework within luxury tourism contexts. It illustrates the consideration of sustainability metrics at the destination level and their subsequent application in evaluating service quality.

Additionally, this study indicates that perceived environmental responsibility is a statistically significant factor in the correlation between “sustainable destination management” and perceived luxury service quality. This indicates that, in addition to sustainability incentives, the quality of luxury service is also influenced by an internal assessment process that takes into account visitors’ attitudes toward their environmental obligations [113,114]. Most prior research employing the Stimulus–Organism–Response paradigm in the hotel sector has examined emotional responses such as loyalty or satisfaction [115]. Our findings offer novel theoretical insights by demonstrating that individuals’ perceptions of sustainability influence their views on luxury services. Moral judgments based on ethical reasoning and perceived value alignment are now included in the Stimulus–Organism–Response paradigm in addition to emotional and behavioral reactions.

This study demonstrates that tourist environmental awareness is a boundary condition that challenges prior assumptions on the Stimulus–Organism–Response paradigm. The study indicates that tourist environmental awareness significantly influences their perception of quality services through sustainable destination management. This aligns with contemporary theories of value congruence [116,117,118]. Nonetheless, it demonstrates an unforeseen adverse moderating impact between perceived environmental responsibility and perceived luxury service quality. This contradicts previous studies, which indicated that heightened environmental awareness consistently results in improved performance [13,36].

This study provides new theoretical insights into the constraints of the Stimulus–Organism–Response model. The organismic condition of perceived environmental responsibility does not consistently result in a favorable reaction of perceived luxury service quality when mediated by high ecological awareness. A potential explanation for this is consumer skepticism. Environmentally conscious tourists may perceive sustainability initiatives as insufficient or insincere in the absence of compelling evidence to substantiate them [119,120]. This leads individuals to evaluate service quality more critically. This introduces “green skepticism” as a theoretically significant boundary condition, which has been underutilized in prior Stimulus–Organism–Response applications.

7. Managerial Implications

The study’s findings are significant for managers in the hotel and tourist sectors in Northern Cyprus and other emerging luxury travel destinations. The significant positive impact of sustainable destination management on perceived luxury service quality indicates that sustainable practices can serve as both ethical obligations and strategic instruments to enhance individuals’ perceptions of luxury. To improve environmental sustainability, management should invest in reputable, customer-centric initiatives such as utilizing renewable energy, constructing eco-friendly structures, and marketing locally sourced products. These factors influence passengers’ evaluations of the overall service they receive. Such investments can redefine luxury to encompass sustainability, attracting more tourists who associate high-quality service with environmental stewardship.

Further, the study indicates that sustainable destination management significantly influences individuals’ perceptions of their environmental obligations. This suggests that tourists experience a sense of civic obligation towards the environment when destinations demonstrate their commitment through initiatives such as constructing low-impact infrastructure, engaging in conservation projects, or educating individuals about ecological concerns. Managers can enhance this by incorporating sustainability themes throughout the visitor experience, including in-room guides, eco-tours, and check-in materials. This will assist travelers in understanding the impact of their travel decisions on the ecosystem overall. This enhances their experience and fosters greater loyalty towards firms that align with their ideals.

Moreover, the findings indicate that tourist environmental awareness serves two functions. While environmentally conscious tourists tend to be more discerning and critical, particularly when perceived responsibility does not align with the level of service provided, they generally assess sustainable services more positively. This suggests that deceptive initiatives, such as greenwashing, within this category are likely to be ineffective. Hotel managers must ensure that sustainable practices are not just evident but also certified, adhered to, and consistently implemented. This can be achieved by disseminating open environmental impact reports, obtaining third-party sustainability certifications (e.g., Green Key and EarthCheck), or engaging guests in practical sustainability initiatives such as waste sorting or ecological restoration activities.

The insignificant moderating effect of tourist environmental awareness on the relationship between sustainable destination management and perceived luxury service quality indicates that the visibility and perceived authenticity of sustainability initiatives are more significant than guests’ prior environmental values. Policymakers and tourism boards should, therefore, endorse capacity-building initiatives that empower local enterprises to implement and disseminate sustainable practices effectively. In sustainable service design training, cooperation between the public and private sectors, along with government-endorsed sustainability labeling, has a significant influence.

The adverse moderating influence of tourist environmental awareness on the relationship between perceived ecological responsibility and perceived luxury service quality indicates a credibility deficit. Sensitive guests would scrutinize and challenge evident discrepancies between environmental discourse and service execution. This suggests that hotel management should strive to enhance operational uniformity across guest experiences and environmental cues. For example, discerning clients may experience dissonance if a hotel markets itself as eco-luxurious while using single-use plastics or failing to provide vegetarian options, thereby undermining the overall quality of its services. Staff training, internal audits, and regular assessments of sustainability communications are three effective methods to mitigate such inequalities. This work highlights the relationship between assessments of luxury services and the perceived environmental responsibility through sustainable destination initiatives. Highlighting both theoretical and managerial perspectives, it encourages subsequent research to explore broader psychological and contextual dimensions. Ultimately, it highlights the strategic importance of sustainability in enhancing the luxury tourism experience.

This study suggests that managers should encourage systems thinking, sustainability literacy, and environmental leadership qualities, including stakeholder engagement, to promote effective environmental management. Understanding the relationship between sustainability and service quality enables executives to align their resources, personnel, and marketing strategies with customers’ long-term expectations. Incorporating sustainability KPIs into performance management systems and incentivizing staff to propose eco-friendly solutions will facilitate the dissemination of these concepts across service delivery.

The study presents compelling evidence for integrating environmental considerations into destination-level planning. Tourism policymakers must recognize that ecologically responsible branding must align with systematic investments such as waste management systems, sustainable transportation infrastructure, and eco-tourist zoning regulations. This not only benefits service providers but also enhances the overall perception of destination quality among increasingly environmentally conscious guests.

8. Limitations and Direction for Future Studies

This study offers valuable insights into the relationship between sustainable destination management and perceived luxury service quality; however, it has several drawbacks that should inform future research. The study initially employed a cross-sectional design, limiting the ability to establish causality. Future research may employ experimental or longitudinal methodologies to enhance understanding of the evolution of tourists’ perceptions and environmental attitudes in response to varying destination experiences.

Secondly, although perceived environmental responsibility mediates the association between sustainable management and service quality, alternative mediators—such as eco-guilt, environmental pride, or moral satisfaction—could provide additional explanatory power. Future research may explore these psychological pathways to encompass the ethical and emotional dimensions of visitor evaluations more effectively.

Third, although tourist environmental awareness was examined as a moderator, subsequent studies could incorporate additional personal and contextual factors, such as cultural background, pro-environmental identity, or perceived authenticity of sustainability initiatives, to reveal more substantial contingencies influencing service quality evaluations.

This study is susceptible to social desirability bias and standard method variance due to reliance on self-reported data. Despite compliance with procedural and statistical adjustments, forthcoming research may incorporate triangulated data sources, such as behavioral data, observational studies, or third-party evaluations, to validate replies and enhance the robustness of conclusions. By mitigating these limitations, forthcoming research will be improved, thereby reinforcing the theoretical, empirical, and practical significance of sustainability in luxury tourism.

A significant issue with this study is that only 35% of the individuals solicited for the survey participated, which raises concerns regarding non-response bias and the extent to which the data accurately reflect the population. The resulting sample size of 541 respondents is sufficient for PLS-SEM analysis. A greater response rate in subsequent studies would enhance the reliability and applicability of the results to different contexts. Data collection was restricted to individuals proficient in reading and writing English, potentially excluding several tourists in Northern Cyprus, particularly those without English language skills. The language barrier inadvertently restricted the diversity of perspectives collected. To enhance the study’s accessibility for a broader audience, the questionnaire may be provided in more languages in the future. Collaborating with local travel agencies or tourism organizations to distribute the questionnaires could enhance participation and yield more diverse responses.

9. Conclusions

This study examined the influence of sustainable destination management on perceived luxury service quality while considering the mediating role of perceived environmental responsibility and the moderating influence of tourist environmental awareness. Data were obtained from 541 tourists and analyzed using SPSS version 23 to perform Harman’s single-factor test and confirmatory factor analysis, as well as the bootstrap technique in SMART-PLS version 4.1.1.2. The study’s results revealed a significant positive influence of sustainable destination management on both perceived luxury service quality and environmental responsibility. Furthermore, the study showed a significant positive relationship between perceived environmental responsibility and perceived luxury service quality. Additionally, tourist environmental awareness was found to be an important influencing factor of perceived luxury service quality. The mediating role of perceived ecological responsibility revealed a significant partial mediation between sustainable destination management and perceived luxury service quality. Although environmental awareness revealed an insignificant moderating influence on the relationship between sustainable destination management and perceived luxury service quality, it indicated a negative significant moderating influence on the relationship between perceived environmental responsibility and perceived luxury service quality. This study highlights how assessments of luxury services are contingent upon perceived ecological responsibility through sustainable destination activities. Emphasizing both academic and management perspectives, it encourages future research to explore broader psychological and contextual factors. Therefore, it underscores the strategic necessity of sustainability in enhancing the luxury tourism experience.