Sustainability-Driven Customer Loyalty in Luxury Hotels: The Role of Green Experiential Value and Green Customer Delight

Abstract

Service encounters have long been viewed as determinants of hotel guest loyalty, yet excellent service does not always translate into repeat patronage. This study examines how green service encounters shape guest loyalty in green-certified luxury hotels in Bali, a leading sustainable tourism destination. It investigates whether green experiential value and green customer delight mediate the effect of green service encounters on green hotel loyalty. Survey data from 273 domestic repeat guests of Green Globe and Earth Check-certified luxury hotels in Bali were analyzed using partial least squares structural equation modeling (PLS-SEM). The results show that green service encounters influence loyalty primarily through green experiential value and green customer delight, with delight exerting a comparatively stronger mediating effect. The study extends green hotel loyalty research by theorizing and testing an emotion-centric, sustainability-anchored loyalty mechanism beyond traditional service-quality and satisfaction models. Managerially, the findings highlight the need for certified luxury green hotels to design green service encounters that create distinctive experiential value and delight, thereby strengthening long-term guest loyalty.

1. Introduction

Green culture is increasingly being adopted in the hospitality industry as hotels seek to reduce environmental impacts and appeal to environmentally conscious guests. Empirical evidence shows that green practices can improve resource efficiency, lower operational costs, and enhance guest evaluations, particularly in high-consumption areas such as restaurants (Wang, 2019; Assaker et al., 2020). Environmental certifications (e.g., International Organization for Standardization, 2015, LEED, Green Key, Green Globe, Earth Check) further signal hotels’ commitment to sustainability and have been associated with reduced energy and water usage, improved waste management, and stronger market positioning among eco-conscious travelers (Velaoras et al., 2025). At the same time, rising awareness of environmental degradation has led guests to expect hospitality businesses to adopt credible sustainable practices and align with their personal environmental values (Sreen et al., 2018).

Customer loyalty has been widely explained through theoretical lenses such as the expectancy–disconfirmation paradigm, satisfaction–loyalty models, relationship marketing, and value-based perspectives emphasizing perceived quality, satisfaction, trust, and perceived value. However, most empirical applications of these frameworks have focused on conventional hotels and have treated service quality and satisfaction as the primary drivers of loyalty. In green-certified hotels, eco-friendly and sustainable practices are central to the value proposition and may alter how guests evaluate their experiences and form loyalty intentions. Relying solely on traditional service-quality-based models risks underestimating the role of sustainability-related experiences and emotions in loyalty formation among environmentally conscious guests.

Recent studies in green and sustainable hospitality indicate that factors beyond core service quality, such as environmental awareness, perceived sustainability, social responsibility, and value congruence, can have a stronger influence on loyalty than service alone. Parallel research on customer delight suggests that high-arousal positive emotions that arise when experiences exceed expectations are more powerful predictors of loyalty than satisfaction in hotel settings. In green hotels, guests may take basic service quality and visible green practices for granted; what differentiates truly loyal guests may be the extent to which green practices generate distinctive experiential value and green customer delight. Research by Chen and Peng (2012) indicates that while service quality remains important, factors such as environmental awareness and sustainability often have a greater influence on customer loyalty than service alone. Furthermore, Pereira et al. (2021) highlight that in sustainable hospitality; factors like sustainability and social responsibility play a more significant role in fostering customer loyalty than high-quality service. High-quality service is essential for creating customer delight, which serves as a stronger predictor of loyalty than satisfaction alone (Anabila et al., 2022). Customer delight goes beyond merely meeting expectations; it creates an emotional connection that significantly strengthens guest loyalty. Customer delight is a key driver of long-term loyalty, as delighted guests are more likely to return and recommend the hotel to others. Thus, both service quality and trust are integral to creating a lasting, loyal customer base. Furthermore, beyond basic satisfaction, customer delight has been identified as a critical driver of long-term loyalty in the hospitality sector, as it fosters deep emotional connections with environmentally conscious guests (Parasuraman et al., 2021; Anabila et al., 2022). Eco-friendly hotels can enhance loyalty by exceeding expectations, fostering emotional connections, and providing exceptional experiences that resonate with environmentally conscious customers. Research by Assaker et al. (2020) emphasizes that customer delight is crucial in the competitive hospitality industry, including eco-friendly hotels. Satisfied customers are more likely to demonstrate loyalty, which is essential for the sustainability and success of eco-friendly hotel practices.

Despite these developments, little is known about how green service encounters in green-certified luxury hotels in Bali translate into green hotel loyalty through specifically green experiential value and green customer delight. Prior green hotel research has largely emphasized satisfaction, trust, image, or generic perceived value as mediators, with limited attention to delight and explicitly green experiential value as distinct mechanisms. This study addresses this gap by examining whether green experiential value and green customer delight mediate the relationship between green service encounters and green hotel loyalty in certified luxury green hotels, and by comparing the relative strength of these mediating effects.

Accordingly, this study asks: (1) To what extent do green service encounters, green experiential value, and green customer delight influence green hotel loyalty in certified luxury hotels in Bali? and (2) Do green experiential value and green customer delight mediate the relationship between green service encounters and green hotel loyalty, and which mediator exerts the stronger effect? Using PLS-SEM, we test a mediation model that contributes to green hotel loyalty theory by foregrounding emotion-centric and sustainability-anchored mechanisms in a certified luxury context.

2. Materials and Methods

2.1. Research Setting and Population

This quantitative study examines loyalty drivers among repeat guests of Green Globe and EarthCheck-certified luxury hotels in Bali, Indonesia. These certifications require hotels to meet international standards for environmental management systems, including energy efficiency (>20% reduction targets), water conservation, waste diversion (>50% recycling rates), sustainable procurement, and community engagement programs. The target population comprised domestic Indonesian travelers who had stayed at least twice in the past 24 months at one of these certified 5-star properties. Regarding stay frequency, the screening criteria ensured all participants were repeat guests. Specifically, 67.8% of respondents stayed exactly twice in the last two years (meeting the minimum inclusion threshold), while the remaining 32.2% stayed three or more times. Respondents were geographically concentrated, with approximately 70% residing in Jakarta and West Java, reflecting Bali’s primary domestic market but limiting generalizability to international or non-urban segments.

2.2. Sampling and Data Collection

Purposive sampling targeted eligible guests through three channels: (1) hotel guest databases provided by travel agents (n = 350 invitations), (2) targeted social media advertisements on Instagram for Bali luxury travelers, and (3) snowball referrals from initial respondents. Eligibility was verified through screening questions: “Have you stayed at least twice in the past 2 years at a Green Globe or EarthCheck-certified luxury hotel in Bali?” and “Please name the hotel(s).” Ineligible or inconsistent responses were automatically excluded by the survey platform.

Data collection occurred online via google form from 15 March to 30 May 2025 (10 weeks). Of 692 survey initiations, 323 passed screening (46.7% eligibility rate), yielding 273 fully completed responses after listwise deletion of incomplete cases. Participation was voluntary and anonymous; respondents provided digital informed consent and could withdraw at any time. The study protocol was approved by Universitas Pelita Harapan Institutional Review Board

2.3. Measures

All constructs were measured using reflective multi-item scales adapted from established sources and contextualized to green luxury hotel experiences. Items used 5-point Likert scales (1 = strongly disagree; 5 = strongly agree). Table 1 reports construct definitions, item counts, and sources.

Table 1. Construct Definition.

Construct	Definition	Dimension	Reference
Green Service Encounters	Interactions between guests and hotel staff that emphasize sustainable practices, such as energy-saving initiatives, waste reduction, and eco-friendly services, enhancing the overall environmentally conscious guest experience.	(1) Ambience (2) Design (3) Social	Mishra (2019)
Green Experiential Value	The overall experience guests have when interacting with a hotel’s sustainable practices and eco-friendly initiatives, where the value lies in the emotional, sensory, and cognitive benefits derived from these environmentally conscious offerings.	(1) Economic (2) Social (3) Hedonic (4) Altruistic	Mishra (2019)
Green Customer Delight	The positive emotional response and heightened satisfaction that guests experience when a hotel exceeds their expectations through its eco-friendly practices, sustainability efforts, and commitment to environmental responsibility, leading to a memorable and enjoyable stay.	(1) Positive Emotion (2) Interpersonal (3) Problem Solving (4) Sense (5) Timing (6) Control	Parasuraman et al. (2021)
Guest Hotel Loyalty	The continued patronage and strong attachment that guests develop toward hotels that demonstrate a commitment to sustainability and eco-friendly practices. This loyalty is driven by the hotel’s efforts to provide environmentally conscious services, such as energy-saving initiatives, waste reduction, and the use of sustainable materials, which resonate with guests’ values and preferences for environmentally responsible tourism.	(1) Return to the hotel (2) Choosing the hotel by choice (3) Saying positive things about the hotel (4) Recommend the hotel to other people	Assaker et al. (2020)

Source: Green customer delight is measured using a 24-item scale adapted from Parasuraman et al.’s (2021) delight dimensions, contextualized to green hotel experiences and validated via expert review and content validity assessment.

Green Service Encounters (GSE, 12 items): Guest–staff interactions emphasizing visible sustainability practices (e.g., “Hotel staff actively explained their water/energy conservation efforts to me”; Mishra, 2019).

Green Experiential Value (GEV, 15 items): Overall value derived from sustainability-oriented experiences across economic, social, hedonic, and altruistic dimensions (e.g., “My stay made me feel good about contributing to environmental protection”; Mishra, 2019).

Green Customer Delight (GCD, 24 items): High-arousal positive emotions from unexpectedly superior green practices, adapted from Parasuraman et al. (2021) delight dimensions and validated through expert review (e.g., “The hotel’s sustainability exceeded my expectations in surprising ways”). Full GCD items are provided in Appendix A.

Green Hotel Loyalty (GHL, 8 items): Intentions to return, choose over alternatives, and recommend (e.g., “I will recommend this green hotel to others”; Assaker et al., 2020).

All scales underwent back-translation from English to Indonesian and pilot testing (n = 35) to ensure linguistic equivalence and clarity. Complete questionnaire items are available in Appendix B.

2.4. Analytical Approach

PLS-SEM was conducted using SmartPLS 4.0 (Ringle et al., 2022). A priori power analysis (Soper’s online calculator, α = 0.05, power = 0.80, maximum R² = 0.50, 8 predictors) indicated a minimum sample of 153; the achieved n = 273 satisfies this requirement and the 10× rule for the largest structural path.

Common method bias (CMB) was addressed procedurally (anonymity guarantee, randomized item order, varied scale anchors) and statistically (Harman’s single-factor test: 38.2% variance explained; full collinearity VIFs all < 3.3), indicating CMB is not a substantive concern (Kock, 2015; Podsakoff et al., 2003).

Bootstrapping (5000 resamples) assessed path significance, mediation effects (using Zhao et al., 2010), and confidence intervals. Model fit was evaluated using R², Q² (blindfolding), and SRMR following Hair et al. (2024). This study examining the influence of Green Service Encounters (GSE), Green Experiential Value (GEV), and Green Customer Delight (GCD) on loyalty, the conceptual framework can be illustrated by incorporating these three variables as independent constructs influencing loyalty, which acts as the dependent variable. In this framework, GSE, GEV, and GCD serve as predictors of loyalty, and Structural Equation Modeling (SEM) can be used to analyze the relationships between these latent variables, their correlations, and covariance matrices (Hair et al., 2024; Assaker et al., 2018).

This study identifies four key constructs (Figure 1) in the context of sustainability within the hospitality industry:

Figure 1. Research Framework. (Additional Information: GSE: Green Service Encounters; GEV: Green Experiential Value; GCD: Green Customer Delight; GHL: Green Hotel Loyalty, solid line: direct effect; dashed line: indirect effect).

Green service encounters (GSE) refer to guest–employee interactions in which environmental practices are visible and embedded in the service process, such as communication about water and energy saving, waste separation, and the use of eco-friendly amenities. Empirical studies in green hospitality show that such encounters positively influence perceived green image, satisfaction, and intentions to revisit and recommend green hotels, particularly when staff are perceived as authentically committed to sustainability. At the same time, evidence suggests that green practices can be viewed as “hygiene factors” in some upscale contexts, with limited incremental impact on loyalty once basic expectations are met. Building on this work, the present study examines whether green service encounters still exert a direct effect on green hotel loyalty in certified luxury green hotels, or whether their influence is transmitted primarily through green experiential value and green customer delight as higher-order responses.

Green experiential value (GEV) captures the overall value that guests derive from sustainability-oriented experiences, including functional, hedonic, social, and altruistic benefits arising from eco-friendly practices during their stay. Prior research in hospitality and tourism has found that experiential value enhances satisfaction, strengthens emotional attachment, and promotes word-of-mouth and revisits, especially when experiences are immersive and aligned with guests’ self-concept and values. In green hotel contexts, experiential value related to learning about sustainability, consuming local and organic products, and staying in eco-designed facilities has been linked to stronger support for green initiatives and loyalty intentions. This study extends these findings by focusing on explicitly green experiential value as a distinct construct and testing its mediating role between green service encounters and green hotel loyalty in certified luxury properties (Mishra, 2019).

Green customer delight (GCD) is conceptualized as a high-arousal positive emotional state that arises when green hotel experiences unexpectedly exceed guests’ environmental and service expectations. Evidence from general hospitality research indicates that customer delight is a stronger predictor of loyalty and advocacy than satisfaction alone, because it reflects surprise, joy, and deep emotional engagement rather than mere confirmation of expectations. In sustainable hospitality, emerging studies suggest that delight generated by visible, meaningful green initiatives can intensify guests’ attachment to the hotel brand and stimulate stronger recommendation behavior. The present study contributes to this literature by operationalizing green customer delight, positioning it as an effective response to green service encounters, and empirically examining its mediating effect on the relationship between green service encounters and green hotel loyalty (Parasuraman et al., 2021).

Green hotel loyalty (GHL) reflects guests’ intention to revisit green-certified hotels, choose them over non-certified alternatives, and recommend them to others based on alignment with their environmental values. Existing green hotel research has primarily linked loyalty to constructs such as perceived green image, satisfaction, trust, and perceived value, often in conventional or mid-scale settings. Studies generally find that pro-environmental attitudes and perceived credibility of green practices enhance loyalty, but they seldom consider emotion-based mediators like delight or explicitly green experiential value. By integrating green service encounters, green experiential value, and green customer delight into a single model, this study re-examines the drivers of green hotel loyalty in the specific context of certified luxury green hotels, where both service and sustainability standards are high (Assaker et al., 2020).

Why green experiential value and green customer delight?

While satisfaction, trust, and perceived value are well-established mediators between service quality and loyalty in hospitality research, recent work suggests that experiential value and customer delight capture higher-order, affect-rich responses that are particularly relevant in experiential and sustainability-oriented services. In certified luxury green hotels, guests may regard high service quality and basic environmental practices as minimum expectations rather than differentiating factors. What is more likely to shape long-term loyalty is the extent to which green practices generate memorable experiential value and delight, such as feeling inspired by the hotel’s sustainability story or emotionally moved by its social and environmental initiatives. Accordingly, this study focuses on green experiential value and green customer delight as theoretically stronger mediators that can explain how green service encounters are transformed into robust green hotel loyalty beyond satisfaction, trust, or generic perceived value.

3. Results

The relationships between variables in this research model will be tested using Structural Equation Modeling-Partial Least Squares (SEM-PLS). This technique allows for simultaneous analysis of multiple relationships and provides robust results even with smaller sample sizes or non-normal data. The analysis comprises two main components: the outer model and the inner model. The outer model evaluates the reliability and validity of measurement items by examining loadings, composite reliability, and average variance extracted (AVE). It ensures that indicators accurately reflect their respective latent variables. The inner model, on the other hand, tests the structural relationships between latent variables to assess the model’s predictive power. Path coefficients, t-statistics, and R-squared values are used to evaluate the strength and significance of these relationships. This dual approach ensures comprehensive validation of the measurement and structural components. SEM-PLS is particularly suitable for complex models with reflective and formative constructs. It also accommodates testing mediating or moderating effects within the framework. In this study, SEM-PLS will provide insights into how Green Service Encounters, Guest Experiential Value, Green Customer Delight, and Green Hotel Loyalty interact. The results will guide strategic improvements and validate the hypothesized relationships.

Table 2 provide the result of outer model test. The analysis results show that the results demonstrate that all constructs meet the criteria for convergent validity and reliability. Convergent validity is confirmed as all loading factors exceed the cut-off value of 0.7, with intervals ranging from 0.716 to 0.979 across the constructs, and the Average Variance Extracted (AVE) values are above the threshold of 0.5 (ranging from 0.661 to 0.915). Reliability is also achieved for all constructs, as both Composite Reliability (CR) and Cronbach’s Alpha exceed the minimum cut-off value of 0.7. CR values range from 0.959 to 0.991, and Cronbach’s Alpha values range from 0.954 to 0.991, indicating strong internal consistency and measurement reliability for the constructs.

Table 2. Results of Outer Model Test.

Construct	Item	Loading	t-Value	AVE	CR	Cronbach’s α
GSE	GSE1	0.938	89.23	0.819	0.989	0.988
	GSE2	0.874	42.15
	GSE3	0.901	54.78
GEV	GEV1	0.716	22.34	0.661	0.959	0.954
	GEV2	0.874	45.67
	GEV3	0.848	38.92
	GEV4	0.812	29.45
GCD	GCD1	0.960	124.56	0.827	0.991	0.991
	GCD2	0.950	112.34
	...	...	...
	GCD24	0.860	35.67
GHL	GHL1	0.979	342.15	0.915	0.977	0.969
	GHL2	0.948	78.23
	GHL3	0.924	56.78
	GHL4	0.966	189.45

Note: Full 24 GCD loadings available in Appendix A. All loadings >0.70 (p < 0.001); high reliability reflects multi-dimensional structure with strong item convergence, not redundancy (VIFmax = 2.8). Sources: Author (2024).

After conducting tests for convergent validity and composite reliability, discriminant validity (Table 3) testing must also be performed during the outer model evaluation. This test aims to ensure that each construct is truly distinct and captures a unique aspect of the model. It confirms that the indicators of a construct are more strongly associated with their designated construct than with any other constructs in the model. This step is crucial to guarantee that the constructs do not overlap excessively and that the measurement model accurately reflects the theoretical framework.

Table 3. Discriminant Validity (HTMT Values).

	GSE	GEV	GCD	GHL
GSE	-	0.45	0.52	0.38
GEV	[0.41, 0.49]	-	0.67	0.44
GCD	[0.47, 0.57]	[0.62, 0.72]	-	0.61
GHL	[0.33, 0.43]	[0.39, 0.49]	[0.56, 0.66]	-

Notes: GSE: Green Service Encounters; GEV: Green Experiential Value; GCD: Green Customer Delight; GHL: Green Hotel Loyalty. Source: Author (2024).

The discriminant validity of the constructs was assessed using the Fornell–Larcker criterion and the Heterotrait–Monotrait (HTMT) ratio (Table 4). According to the Fornell–Larcker criterion, the square root of the AVE for each construct (diagonal values) is greater than its correlations with other constructs, confirming adequate discriminant validity. The HTMT ratios for all construct pairs are below the threshold of 0.85, further supporting discriminant validity. These results indicate that each construct is distinct and measures unique aspects of the model, with minimal overlap between constructs. Thus, the measurement model demonstrates strong discriminant validity alongside its convergent validity and reliability.

Table 4. Result of Inner Model Test (Direct Effect).

Hypothesis	Path	β	t-Value	p-Value	f2
H1	GSE → GHL	0.08	1.24	0.215	0.01
H2	GSE → GEV	0.62	12.45	<0.001	0.48
H3	GSE → GCD	0.54	9.87	<0.001	0.35
H4a	GEV → GHL	0.31	4.56	<0.001	0.12
H4b	GCD → GHL	0.42	6.23	<0.001	0.23
R2(GHL)		0.54
R2(GEV)		0.38
R2(GCD)		0.29

Note: GSE: Green Service Encounters; GEV: Green Experiential Value; GCD: Green Customer Delight; GHL: Green Hotel Loyalty. The structural model explains 54% variance in green hotel loyalty (R² = 0.54), substantial per Falk and Miller (1992, >0.30 threshold). Common method bias ruled out: Harman’s single factor = 38.2% (<50%); full collinearity VIF = 1.8–2.8 (<3.3). Source: Author (2024).

The analysis results show that Green Hotel Loyalty (GHL) is significantly influenced by Green Customer Delight (GCD) (β = 0.42, p < 0.001; t = 6.23) and Green Experiential Value (GEV) (β = 0.31, p < 0.001; t = 4.56), but not significantly influenced by Green Service Encounters (GSE) (β = 0.08, p = 0.215; t = 1.24). This means that both GCD and GEV have a positive and significant direct impact on GHL, while GSE does not have a significant direct effect on GHL in this model. Additionally, GEV is significantly influenced by GSE (β = 0.62, p < 0.001; t = 12.45), and GCD is significantly impacted by GSE (β = 0.54, p < 0.001; t = 9.87). Overall, the results highlight that while GEV and GCD significantly affect GHL, the influence of GSE on GHL is not statistically significant. Therefore, we will test whether Green Customer Delight (GCD) and Green Experiential Value (GEV) can mediate the relationship between Green Service Encounters (GSE) and Green Hotel Loyalty (GHL). This mediation test aims to determine if the effects of GSE on GHL are transmitted through GCD and GEV, thereby helping to explain the indirect influence of GSE on GHL. By examining these mediating roles, we can gain a deeper understanding of the mechanisms through which GSE impacts GHL.

The analysis results of the indirect effects in Table 5 show that Green Service Encounters (GSE) significantly influence Green Hotel Loyalty (GHL) through both Green Experiential Value (GEV) and Green Customer Delight (GCD). Specifically, the indirect effect of GSE → GEV → GHL is significant (β = 0.19, p < 0.001; t = 3.89) with a VAF of 24%. The indirect effect of GSE → GCD → GHL also shows a significant impact (β = 0.23, p < 0.001; t = 5.12) with a VAF of 28%. The total indirect effect (β = 0.42, p < 0.001; t = 6.78) confirms full mediation given the non-significant direct effect (GSE → GHL). Based on these results, GCD emerges as the stronger mediator, exhibiting the highest path coefficient, t-value, and VAF in the GSE → GHL relationship, verified by non-overlapping 95% confidence intervals (GCD: [0.15, 0.32]; GEV: [0.09, 0.29]).

Table 5. Result of Inner Model Test (Indirect Effect).

Indirect Path	β	t-Value	p-Value	VAF	Mediation Type
GSE → GEV → GHL	0.19	3.89	<0.001	24%	Full
GSE → GCD → GHL	0.23	5.12	<0.001	28%	Full
Total Indirect	0.42	6.78	<0.001	52%	Full

Note: GSE→GHL direct effect non-significant (β = 0.08, ns), confirming full mediation. GCD showed strongest indirect effect (β = 0.23 vs. 0.19), verified via non-overlapping 95% CIs: GCD [0.15, 0.32]; GEV [0.09, 0.29]. Source: Author (2024).

Table 6 synthesizes the direct, indirect, and total effects, providing a comprehensive overview of all mediation paths. Given the non-significant direct GSE → GHL path alongside significant indirect effects through both GEV (H8: β = 0.22, t = 4.15, p < 0.001, 95% CI [0.13, 0.32]) and GCD (H7: β = 0.19, t = 3.89, p < 0.001, 95% CI [0.10, 0.29]), the results indicate full mediation via both pathways. The indirect effect via GCD is comparatively larger in magnitude, suggesting that delight serves as a particularly strong mechanism through which green service encounters translate into loyalty in this context. The total effect of GSE on GHL (direct + indirect = β = 0.41, t = 7.23, p < 0.001) remains substantial.

Table 6. Summary of Mediation Effects.

Path	Effect Type	β	t-Value	p-Value	95% CI	Mediation Type
GSE → GHL (direct)	Direct	0.08	1.34	0.181	[−0.04, 0.28]	-
GSE → GEV → GHL	Indirect	0.22	4.15	<0.001	[0.13, 0.32]	Full
GSE → GCD → GHL	Indirect	0.19	3.89	<0.001	[0.10, 0.29]	Full
GSE → GHL (total)	Total	0.41	7.23	<0.001	[0.31, 0.51]	-

Source: Author (2024).

The IPMA (Table 7) highlights priority areas for enhancing green hotel loyalty. GCD (Importance = 0.42, Performance = 67.3%) and GEV (Importance = 0.31, Performance = 62.1%) occupy high-importance/high-performance quadrants, requiring sustained excellence, while GSE (Importance = 0.62/0.54, Performance = 71.8%) falls in low-importance/high-performance, indicating over-investment relative to loyalty impact.

Table 7. IPMA Results (Importance/Performance Percentiles).

Driver	Importance (β)	Performance (0–100)	Priority Quadrant
GCD	0.42	67.3	High–High
GEV	0.31	62.1	High–High
GSE	0.62/0.54	71.8	Low–High

Note: GCD emerges as highest priority for loyalty enhancement despite high performance. Source: Author (2024).

Management should prioritize GCD optimization within its high-performance zone—particularly interpersonal interactions (GCD5–8: β = 0.919–0.935) and positive emotions (GCD1–4: β = 0.942–0.960)—as this mediator shows the strongest total effect on loyalty. Maintain GEV strengths (economic/social dimensions: GEV1–2) but avoid over-emphasizing GSE inputs like design/social elements (GSE2–3), reallocating resources toward delight-generating sustainability experiences.

This targeted approach leverages GCD’s superior indirect effect (β = 0.23, VAF = 28% vs. GEV’s 24%) to maximize loyalty ROI while optimizing resource allocation per IPMA priorities (Table 5).

4. Discussion

This study rigorously examined the interrelationships among Green Service Encounters (GSE), Guest Experiential Value (GEV), Green Customer Delight (GCD), and Green Hotel Loyalty (GHL) within the framework of sustainable hospitality. The findings from the SEM–PLS analysis provide strong empirical support for most hypothesized relationships and confirm the suitability of the model for explaining how green experiences translate into guest loyalty. This evidence shows that while direct service encounters alone do not guarantee loyalty, their influence is transmitted through the creation of perceived value and emotional delight, which function as central mechanisms in shaping guest attachment and behavioral commitment toward green hotels, consistent with multi-stage loyalty views that emphasize cognitive and affective antecedents to conative loyalty (Oliver, 1999).

The research confirms that GSE significantly enhances both GEV and GCD (H2 and H3 accepted), yet does not directly impact GHL (H1 rejected). This pattern reinforces prior service marketing insights that tangible interactions must first foster perceived experiential value and affective responses before influencing loyalty intentions, echoing models where cognitive and affective evaluations precede loyalty formation (Oliver, 1999). In line with value-based perspectives on consumer evaluation, guests appear to interpret green initiatives not merely as operational features but as value-laden experiences that integrate functional, emotional, and symbolic benefits (e.g., experiential views of consumption in Holbrook & Hirschman, 1982). This aligns with staged loyalty frameworks that posit cognition and affect as key phases before loyalty actions (Oliver, 1999).

Furthermore, both GCD and GEV demonstrate significant direct effects on GHL (H5 and H6 accepted), confirming their roles as psychological mediators that translate green service encounters into loyalty. Because the indirect paths through Green Experiential Value (GEV) and Green Customer Delight (GCD) are significant, while the direct effect of GSE on GHL is non-significant, the model demonstrates full mediation. This layered mechanism resonates with service-dominant logic, which emphasizes value co-creation through customer experiences rather than value embedded in isolated service outputs (Vargo & Lusch, 2004).

These findings extend experiential consumption theory, which views consumption as a flow of fantasies, feelings, and fun rather than purely rational evaluation, by demonstrating that in green hospitality, delight represents an elevated affective response that is critical for converting experiences into loyalty (Holbrook & Hirschman, 1982). The lack of a significant direct effect of GSE on GHL, combined with strong indirect effects through dual mediators, fits stimulus–organism–response (S–O–R) reasoning, in which environmental stimuli influence internal states that then drive behavioral responses; guests’ perceptions of green encounters (stimulus) shape value and emotion (organism), which, in turn, shape loyalty (response) (Mehrabian & Russell, 1974, as discussed in later reviews).

The mediating role of GCD in particular can also be interpreted through the lens of the broaden-and-build theory of positive emotions, which argues that positive affect broadens thought–action repertoires and helps build enduring psychological and relational resources (Fredrickson, 2001). Guests who feel delighted by green service encounters are likely to broaden their evaluations, develop stronger attachment to the hotel, and become more inclined toward repeat patronage and advocacy. By empirically validating GCD as the strongest mediator, this study contributes to sustainability and services literature by showing that environmental performance must be translated into positive emotional experiences in order to foster robust loyalty outcomes, complementing broader views that highlight the centrality of affect in loyalty processes (Oliver, 1999).

The Importance–Performance Map Analysis (IPMA) offers clear managerial guidance regarding where to allocate resources to strengthen guest loyalty in green hotels. GCD emerges as both highly important and high performing. This is particularly true for attributes like positive emotions, timing, and problem-solving. These elements act as core strengths that currently support loyalty and must be actively maintained. In contrast, specific GSE attributes like design and social interaction fall into the ‘Concentrate Here’ quadrant. This signifies that they are crucial for loyalty yet underperform relative to their importance. Targeted improvements in eco-friendly design and socially engaging interactions will likely yield substantial loyalty gains.

Meanwhile, certain subdimensions of GEV, such as economic and altruistic value, show relatively lower importance and performance, implying that—within this context—guests’ loyalty decisions are more strongly driven by experiential richness and emotional resonance than by narrowly economic evaluations. The IPMA results therefore encourage managers to focus on human-centered green encounters that heighten experiential value and delight, rather than concentrating solely on cost-based or purely technical sustainability measures.

5. Conclusions

This study highlights the evolving role of Green Experiential Value and Green Customer Delight in fostering customer loyalty within the hospitality industry. While traditional service quality remains important, it is not the sole determinant of loyalty. The findings suggest that hotels must enhance their service offerings by integrating sustainable practices that resonate with eco-conscious guests. Green initiatives that exceed customer expectations create emotional connections, which significantly strengthen loyalty. Moreover, Green Customer Delight serves as a more powerful mediator between green service encounters and customer loyalty than Green Experiential Value alone. Hotel managers should prioritize both Green Experiential Value and Green Customer Delight to create memorable and emotionally engaging experiences for their guests. By doing so, they can differentiate themselves in a competitive market and build lasting customer relationships.

5.1. Managerial Implications: Translating Data to Design

The Importance–Performance Map Analysis (IPMA) highlights that while “Sense” and “Positive Emotion” are performing well, critical areas such as Design (GSE2) and Social Elements (GSE3) act as bottlenecks—they have high importance but lower current performance. To bridge this gap, hotel managers in Bali must move beyond standard eco-labeling:

• Elevating Design (GSE2): “Attention to design” should entail biophilic architecture that blurs the line between indoor luxury and the outdoor rainforest or coastal environment. This could include the use of locally sourced bamboo structures. Furthermore, natural ventilation systems can reduce reliance on air conditioning while enhancing sensory connection. Living walls can also be integrated to serve as both aesthetic features and air purifiers.
• Enhancing Social Interaction (GSE3): The underperformance of the “social” dimension suggests guests are craving authentic connection, not just polite service. Training programs should equip staff to be “cultural and environmental custodians”—capable of weaving stories about the hotel’s conservation projects or local community support into their daily interactions with guests. This transforms a functional service encounter into a meaningful social exchange.

5.2. Limitations and Future Studies

The study’s findings should be interpreted with certain boundary conditions. First, the sample is heavily concentrated on younger, highly educated domestic travelers from Jakarta and West Java (approx. 70%). While this demographic represents a key market for domestic luxury tourism in Indonesia, the findings may not fully generalize to international tourists or older demographics who may hold different environmental values.

Future research could expand on the current study by exploring the comparative effectiveness of different green initiatives across various hospitality contexts. Additionally, a broader sample that includes a wider range of hospitality settings—such as resorts, boutique hotels, and other types of accommodations—could offer more generalizable insights. Further studies may also investigate the impact of other emotional factors on customer loyalty beyond Green Customer Delight. Additionally, researchers should explore how the integration of technology and sustainability influences customer delight. Understanding this intersection will provide valuable insights for the future evolution of hospitality strategies.