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Article

Application of Natural-Resource-Based View to Nature-Based Tourism Destinations

by
Xi Wang
1,*,
Jewoo Kim
2,*,
Jaewook Kim
3 and
Yoon Koh
3
1
Culture, Creativity and Management, School of Culture and Creativity, BNU-HKBU United International College, Zhuhai 519085, China
2
Department of Apparel, Events, and Hospitality Management, College of Human Sciences, Iowa State University, Ames, IA 50011, USA
3
Conrad N. Hilton College, University of Houston, Houston, TX 77204, USA
*
Authors to whom correspondence should be addressed.
Sustainability 2024, 16(6), 2375; https://doi.org/10.3390/su16062375
Submission received: 14 February 2024 / Revised: 8 March 2024 / Accepted: 11 March 2024 / Published: 13 March 2024
(This article belongs to the Section Tourism, Culture, and Heritage)
Review Reports Versions Notes

Abstract

:
The present study investigates the impact of natural environments on tourism destinations in a holistic approach. Specifically, the impact of accessibility to beaches and environmental quality aspects (temperature, visibility, air quality, and water quality) on tourism businesses can be accessed based on a natural-resource-based view. Dynamic panel estimation is employed to analyze the financial performance of U.S. coastal hotels between 2008 and 2017. By employing the Generalized Method of Moments (GMM) analysis, this aims to estimate coefficients consistently and impartially, thereby addressing endogeneity issues. According to findings of the present study, as hotels are close to beaches, they earn higher revenues and higher revenue per-available-room. Also, all four environmental factors are significant on coastal hotels’ financial performance. These findings underscore the importance of beach and environmental factors as location-specific tourism resources that provide a competitive advantage and demonstrate the application of natural-resource-based view to tourism destinations.

1. Introduction

The majority of tourists prefer destinations with richness in natural resources (e.g., beaches, forests) and unique natural environments (e.g., climate) where they can experience the values of a magnificent natural landscape [1]. Such nature-based tourism (NBT), which includes a variety of entertaining and leisure activities from natural resources and environmental factors, can provide multiple values such as excitement, exploration, relaxation, and adventurous experiences to tourists [2]. NBT destinations with attractive natural resources and favorable natural environments have been taken into priority consideration regardless of demographic attributes and tourists’ preferred travel types. The consistent popularity of NBT has benefitted tourism businesses, which can readily access and use natural resources in tourism destinations. Accordingly, many destination marketing organizations (DMOs), including convention and visitor bureaus (CVB), highlight the value of natural resources (Michigan CVB), environmental factors (Galveston CVB), the value of eco-tourism (Florida CVB), and environmental sustainability (Iowa CVB) with nearby attractions, activities, accommodations, dining, and shopping information.
Beach and coastal areas have been considered as one of the most popular NBT choices. According to TripAdvisor [3], more than 57% of global tourists took their vacation at beach destinations, generating a spillover effect on the local economy. Cruises, sailing, and beach tours among U.S residents increased 122% between 2019 and 2021 [4]. In this light, a beach has become a value-added natural resource that provides a competitive advantage for a destination as well as its local businesses [5]. Indeed, beaches have contributed to 85% of tourism revenues in coastal states [6]. In particular, coastal hotels near beaches had 13% to 17% higher room prices than non-coastal hotels [7]. Moreover, beach destinations are likely to attract overnight tourists who can bring three times more revenue to local businesses [8]. When hotel guests have easy access to beaches, this natural resource can be fully utilized, which ultimately improves the attractiveness of the hotels. Thus, it is imperative for hotels located near beaches to highlight coastal resources as one of their key resources for achieving a competitive advantage that distant competitors cannot match.
The environmental quality of beaches and coastal areas plays a pivotal role in enhancing the viability of coastal resources for tourism and hospitality businesses. Hart [9] highlighted in his natural-resource-based-view (NRBV) that natural resources and the environment create a unique value to visitors and a set of competitive advantages to firms. Nelson et al. [10] highlighted regarding tourism areas that the environmental quality and pollution of beach areas are critical in terms of tourists’ perception toward the beach as a leisure resource. Da Costa Cristiano et al. [5] further stressed the importance of environmental quality and pollution control in beach areas as critical factors for tourism and leisure resources. Chen and Bau [11] noted that climate and natural environments surrounding beaches are pivotal determinants of travel quality and the attractiveness of tourism destinations. Many researchers have emphasized the significance of environmental factors on destination quality and experience quality, noting that environmental quality forms coastal destination images and determines the utility of coastal resources for the competitive advantage of tourism business. However, despite such a critical influence of coastal resources (beach and sand) and environmental factors (climate and environmental quality) on competitive advantages of tourism destinations, few efforts have been made to examine the effect of these factors from a tourism business perspective. As a result, it has been challenging to understand how tourism businesses, such as coastal hotels, develop competitive strategies leveraging their location specificity driven by accessible natural resources and environment quality.
Therefore, the present study aims to cover this research gap by conducting a comprehensive investigation into the impact of accessibility to beaches and coastal areas, as well as four environmental factors reflecting climate and destination quality, on the hotel industry. Specific objectives of this study are trifold: (1) estimating the effect of the accessibility to a beach on hotels’ financial performance; (2) measuring the impacts of environmental factors, including temperature, visibility, air quality, and water quality, on hotel performance; and (3) initiating and evaluating marketing strategies that take advantage of these coastal resources and environmental quality comprehensively.
The present study has substantial implications for both tourism academia and industries. Theoretically, we investigate the holistic impacts of coastal resources and environmental factors on hotels’ financial performance. This approach can appeal to the body of the NBT literature and the hotel industry by revealing the role of natural resources in making tourism destination choices and further determining business performance. In addition, the study extends the range of corporate resources that can offer a competitive advantage to the accessibility to public resources. Practically, the study provides guidance for designing effective destination images and NBT products for hotels and governmental entities. Further, for effective destination marketing and promotion, hotels and DMOs are advised to develop marketing strategies that deliver such NBT destination images with relevant tourism product information. Finally, the findings of our research would provide important business-related considerations for local governments seeking to formulate infrastructure investment plans and environmental policies.
The article is organized as follows. The next section reviews the literature of the theory of natural-resource-based view and the natural resources’ influence on performance of coastal hotels. The third and fourth sections describe the research methods, database, and the GMM analysis results. The fifth section presents and deliberates upon the primary findings derived from the empirical analysis. Subsequently, the concluding section offers the principal implications and conclusions drawn from the study.

2. Literature Review

2.1. Theoretical Background of Nature-Based Tourism

2.1.1. Resource-Based View (RBV) and Natural-Resource-Based View (NRBV)

The resource-based-view (RBV) has long been acknowledged as a theoretical foundation of strategic management [12]. The RBV emphasizes the importance of corporate resources and capabilities on competitive advantage [13]. Resources include physical, financial, organizational, social, and intellectual assets that firms own and/or can process [14]. For sustainable competitive advantage, resources must be valuable, rare, inimitable, and supported by organizations so that they are able to generate additional value to the organizations [13].
The natural-resource-based view (NRBV) further highlights a role of natural environment and resources in creating a sustainable competitive advantage [9]. The key distinctive contribution of this theory is to fill out the theoretical hole of RBT representing the lack of interaction between an organization and its natural environment. The NRBV encompasses three key strategic capabilities: product stewardship (e.g., exclusive access to resources), pollution prevention (e.g., preventing waste and emission), and sustainable development (long-term social, economic, and environmental sustainability). Based on these three capabilities, the NRBV strengthens systematic examination of the relationship between environmental and natural resources and financial performance. This approach ultimately enables researchers to define a bridge between a broader range of resources and strategic outcomes by expanding resources from what firms own to what firms process or access.

2.1.2. Nature-Based Tourism (NBT)

NBT has long received much attention from researchers and tourism industries, due to the appeal of environmental sustainability and ecological values [15]. NBT refers to activities in which people engage when visiting natural attractions outside their regular neighborhood [16], allowing them to fulfill different travel motivations by experiencing and exploiting diverse NBT products [17]. Natural resources, one of the most fundamental attractions, are frequently evaluated and considered in tourism destination decisions [1]. When people travel away from home for recreation in nature, experiences derived from outdoor activities typically depend on the specific natural environments and resources [18].
Extraordinary natural resources, including landscapes and beaches, and flora and fauna, can bring unique experiences to tourists and, therefore, are actively promoted to attract tourists [19]. As natural resources are essential for the value of tourists’ experiences in natural environments, it is important to identify and effectively manage such resources in the NBT system [20]. In response to the increasing popularity of tourism destinations with attractive natural resources, prior studies have demonstrated the importance of natural resources and their contribution to tourism demand based on the supply and demand theory [21]. For a more complete understanding of the effect of natural resources on NBT, the relationship between natural resources and tourism business requires further attention.
As discussed, NRBV provides theoretical foundation that natural resources are fundamental as a site (landscape) and a place for activities (arena) or attractiveness (attraction) [22,23], which contribute to financial performance and competitive outcomes. Melián-González et al. [24] specifically pointed out that natural resources can provide important tourism attractiveness along with surrounding environmental conditions, such as climate and cleanliness for sun and beach destinations. However, a number of studies have raised particular concerns about the sustainable use or development of natural resources and environmental factors for business continuity [25,26].
NBT resources pose their own economic value that can be lost from the degradation of the natural environment. Thus, risk-reducing and sustainability strategies should be implemented to add “economic diversification of the region through establishment of a range of ecologically sustainable tourist and recreational areas and activities based on the region’s natural and man-made attractions” [27]. In most cases, the discourse at NBT destinations revolves around issues of how to meet tourism needs while sustainably managing natural resources of destinations. Thus, stakeholders’ (e.g., local businesses, community, visitors, and DMOs) value assessment of natural resources and their sustainability is increasingly important in resource management at NBT destinations [28]. Those assessed values are essential in NBT destination management and marketing for tourists, business operators, and governments and DMOs, so they help in evaluation and development of NBT destinations in a sustainable way [1].

2.2. Interaction between Natural Resources and Environment and Coastal Hotels’ Performance

2.2.1. Product Stewardship Perspective

Product stewardship includes the entire value chain of the NBT product systems, which creates a potential competitive advantage stemming from strategic preemption. This preemption can be substantiated by secured exclusive access to resources (e.g., distance to beach, accessibility to any raw materials). Tourism destinations with valuable coastal resources can provide a variety of sources of enjoyment and entertainment, such as marine recreational activities [11]. The Federal Aviation Administration [29] defined coastal resources to include all natural resources occurring within coastal waters and their adjacent shore lands. Coastal resources include transitional and intertidal areas, beaches, dunes, and coral reefs, as well as fish and wildlife and their respective habitats within these areas [29]. Tourism destinations are exploiting values of such coastal resources. The unique “sea, sun and sand” and “a relaxed friendly” atmosphere [30] ultimately provide a competitive advantage to the NBT destinations. In this respect, comprehensive coastal resources and the ease of access to those resources have been important considerations when tourists make hotel selections [30].
Previous studies have identified significant attributes of beaches and sand that drive tourism demand [31]. For example, the positive effects of a beach’s water quality [32], the quality of the beach itself (e.g., beach length, erosion, and cleanliness) [30], beach-related attractions including water sports and recreational activity [33], and beach-related facilities and services [11] on destinations’ competitiveness have been widely acknowledged. However, accessibility to coastal resources has not gained attention despite their importance.
Previous studies focused on the importance of accessibility to coastal resources have focused primarily on attributes of accessible beaches from a tourism demand perspective [11,30], given the previous findings that beaches, along with their attractive attributes, can contribute to destination demand, this natural resource can bring economic benefits to the local community, particularly local tourism businesses [34]. However, few studies have empirically examined the effect of beaches on the financial performance of local tourism businesses. To the best of our knowledge, Pompe and Rinehart’s exploration [35] is the only study that showed a glimpse of financial impacts of beaches. They investigated the value of beaches to hotels based on the hedonic pricing model and found that the distance to a beach is a significant determinant of hotels’ real estate value in a beach destination [35]. Accordingly, an empirical investigation of financial impacts of coastal resources accessibility on hotels can help better understand the entire economic values of natural resources for relevant local businesses in NBT destinations. Therefore, the first hypothesis was formulated as follows:
H1. 
Beach access has a positive impact on coastal hotels’ financial performance.

2.2.2. Sustainability Development Perspective

Most sun and sand beach destinations are sensitive to temperature because a preferred temperature zone exists that allows tourists to enjoy coastal resources better [36]. Similarly, as tourists are more aware of the climate conditions of beach destinations, their willingness to travel to the specific destinations increases [37]. Weather information, including average daily and nightly temperatures, affects pricing strategies of NBT businesses, which confirms the critical value of temperature to stakeholders [36]. Martin [38] noted that temperature is closely related to tourists’ perceptions of comfort within a geographical area. These findings could be interpreted as tourists’ overall perceived values and use of those coastal resources varying based on temperature [36]. Thus, tourists are highly likely to choose certain activities within a specific temperature zone. For example, when a temperature increases 1 °C to 4 °C at a beach destination, tourists change their activity locations or switch to indoor activities, because they would be comfortable only when doing those activities within a particular temperature zone [38].
The fact that tourist activities are influenced by temperature suggests that temperature can be related to the tourism demand for a beach destination [39]. Average daily temperatures could be a quality cue that tourists utilize to make destination decisions; consequently, temperature produces seasonal fluctuations in tourism demand at beach destinations [37]. Moore [40] empirically showed that temperature changes could lead to at least a 1 percent change in both tourist volume and tourism revenue in Caribbean areas. Friedrich et al. [41] found that increased temperature positively affects beach destinations because more tourists felt comfortable with changed weather conditions. Given the significant effect of temperature on tourism demand, this study investigated the effect of temperature on hotel performance.
H2. 
Local temperature has a positive impact on coastal hotels’ financial performance.
Visibility is identified as a critical environmental factor that differentiates values of NBT destinations as well as tourists’ overall experiences [42]. Visibility can be defined as the greatest distance at which a black object of suitable dimensions, situated near the ground, can be seen and recognized when observed against a bright background [43]. Visibility depends on such factors as humidity, fog, haze, mist, storm, yellowness, dust, and other weather conditions. The condition of visibility mainly affects tourists’ sense of enjoyment and perceived attractiveness of the site [44]. Consequently, visibility influences destination preference, tourists’ recreational activity, traffic of local transportation, and even destinations’ public health and safety [42,45]. The low level of visibility in tourism destinations is likely to hurt the aesthetic attractiveness of tourism destinations, lowering the tourism demand [46]. In contrast, an excellent visibility condition allows for ensuring the safety conditions for a bunch of outdoor activities, such as crafting and kayaking [47], which can further lead to longer stays by contributing to destinations’ attractiveness [46,48]. Cardoso-Andrade et al. [49] demonstrated that visibility is one of the keys to assessing the coastal resources of a beach destination. Reduced visibility conditions have been found to decrease tourists’ satisfaction levels [50]. Given these negative effects of low visibility conditions on tourists’ perceived values of NBT destinations and tourism demand, a hypothesis regarding the relationship between local visibility and hotel performance was drawn as follows:
H3. 
Local Visibility Has a Positive Impact on Coastal Hotels’ Financial Performance.

2.2.3. Pollution Prevention Perspective

Pollution prevention entails seeking to prevent waste and emissions so that natural resources and environmental factors keep on working as driving forces for competitive advantages [9]. Not only securing environmental quality, but also highlighting the cleanness of natural resources contributes to destination image as well as destination sustainable competitive advantages. For coastal hotels, these environmental factors can improve the utility of the resources and play a vital role in their business performance [51]. Han et al. [52] stated that climate changes and their derivative consequences pose significant potential threats to beach destinations and local tourism business (e.g., coastal hotels). Thus, it is important to investigate whether, and to what extent, environment quality contributes to the financial performance of local businesses in NBT destinations.
In this sense, air and water quality have been another environmental consideration in destination selection in addition to hotel selection [53]. Air quality is mainly related to the emissions of sulfide, nitrous oxide, or carbon dioxide [54], whereas water quality is primarily affected by the dumping of sewage or wastewater. Despite some relationship with local visibility, air quality at beach destinations, as a separate factor, plays a significant role in appealing to tourists’ aesthetic values [55]. Jedrzejczak [56] analyzed the reasons why people visit the beach. In this study, 26% of the participants highlighted fresh air as the main reason for visiting the beach destination, and 25% stated that water activities directly related to the water quality were another main reason for their destination selection. These findings indicate that coastal hotels could benefit from a clean and fresh image and the attractiveness that such an image of the beach destination produces; thus, coastal hotels cannot be completely ignorant of how air and water quality affect their performance.
As NBT destinations are becoming popular, environmental factors that provide unique values with clean water and fresh air can deteriorate due to pollution; therefore, these values can easily vanish, which reduces the attractiveness of the destinations [57]. Polluted air and water conditions may cause unwanted climate alterations, including acid rain and the destruction of natural habitats in marine and coastal areas, which interfere with tourism activities such as water sports at beaches [58]. Such polluted air and poor water quality leads to tourists’ health and safety concerns and, thus, are perceived as risks [59]. It has been empirically shown that improved water quality at destinations is positively related to visit intention as well as revisit intention [57], which ultimately affects coastal hotels’ attractiveness and performance. Thus, it is worthwhile to investigate the effects of air and water quality on hotel financial performances.
H4. 
Local air pollution has a negative impact on coastal hotels’ financial performance.
H5. 
Local water pollution has a negative impact on coastal hotels’ financial performance.

3. Methods

3.1. Variables and Models

To explore the effects of coastal resources and environmental quality on hotels’ financial performance, this study investigated accessibility to beaches and four environmental factors: temperature, visibility, air quality, and water quality. Hotel revenue and revenue per available room (RevPAR) were adopted as dependent variables given that these financial indicators have been widely used performance measures in the hotel industry [60]. In addition, this study controlled for seasonality, macroeconomic factors, the time-variant effect, and the geographic effect to improve the accuracy of the models.
lnREVt = β1 + β2lnDISt + β3lnTEMt + β4lnVISt + β5lnAIRt + β6lnWATt + β7lnCPIt + β8lnGDPt + β9YEARk + β10REGIONl + ε (Model 1)
lnREVPt = β1 + β2lnDISt + β3lnTEMt + β4lnVISt + β5lnAIRt + β6lnWATt + β7lnCPIt + β8lnGDPt + β9YEARk + β10REGIONl + ε (Model 2)
Table 1 presents a detailed key of the variables. Two dependent variables were hotel revenue (REV) and RevPAR (REVP). The distance from hotels to the nearest beach (DIS) was one of the main independent variables and represented accessibility to beaches. Environmental factors—temperature (TEM), visibility (VIS), water quality (WAT), and air quality (AIR)—were also measured as annual averages. This study added several control variables to the models. Economic variables of gross domestic product (GDP) and the consumer price index (CPI) were included to control for macroeconomic impacts. Finally, seasonal, time-variant, and geographical effects were controlled by including yearly (YEAR), and regional (REGION) dummies in the models, respectively. The natural logarithm transformation of dependent and independent variables was taken, which can not only transform the data into a more normalized distribution, but also allow us to interpret complicated estimation results as proportional changes [61].
To determine an estimation method for the specified models, we first conducted the panel unit root test of Im et al. [62] (IPS test hereafter) and found that the dependent variables (REV and REVP) only were not stationary at the level while independent variables were stationary (see Table 2). Further, the first differences of the dependent variables were found to be stationary. These findings suggested dynamic panel models that include first-differenced dependent variables (REVt−1 and REVPt−1) as independent variables. However, the inclusion of such lagged dependent variables could cause an endogenous problem with error terms [63]. Especially when the timespan of the dataset is less than the number of subjects (T < N), lagged dependent variables could lead to biased estimates with ordinary least squares and fixed-effects estimation [64,65]. Therefore, this study employed the system-generalized method of moment (GMM) analysis introduced by Arellano and Bover [66] and Blundell and Bond [67] to estimate consistent and unbiased coefficients while addressing the endogenous problem. In addition, the system GMM method is effective in dealing with unobserved heterogeneity across subjects (unobserved time-invariant differences among hotels) [68]. To test the validity of the system GMM estimator, this study conducted the serial correlation test of Arellano and Bond [69] and the overidentification test of Hansen [70].

3.2. Data

Our data were obtained from different databases. Hotels’ financial data (i.e., REV, REVP) were acquired from Smith Travel Research (STR), which delivers lodging industry benchmarking performance data. For DIS, the addresses of hotels and beaches were collected from TripAdvisor. This study retrieved environmental quality data (i.e., TEM, VIS, AIR, WAT) from the National Oceanic and Atmospheric Administration and the United States Environmental Protection Agency databases. Economic variables (i.e., GDP and CPI) were collected from the Bureau of Economic Analysis and the Bureau of Labor Statistics, respectively.
All hotel data were aggregated at the zip code level due to the privacy policy of Smith Travel Research (STR), which provided hotels’ financial data. Eighty-eight zip codes were identified from five well-known tourism regions in coastal areas (Honolulu, Maui, Houston, Miami, and San Diego) [71], where are very rich in natural resources. By taking advantage of the sufficient number of zip codes used, this zonal data aggregation method would not affect the overall data analysis results based on the regression estimation [72]. The final sample included hotels’ financial performance indicators, distance to beach, four environmental factors, and macroeconomic variables over a 10-year span of panel data from 2008 to 2017. Despite some temporal and geographical limitations in data availability, the study still benefited from a compelling dataset comprising 788 observations for the analysis.

4. Results

The descriptive statistics of the variables are presented in Table 3. The average distance to the nearest beach was 31.6 miles while the average temperature was 16.36 °C. A correlation analysis was conducted to preliminarily detect relationships among the variables (see Table 4). No independent variables were found to be highly correlated. This study also tested the variance inflation factor (VIF) to check multicollinearity. The VIF values of independent variables ranged from 1.59 to 6.40, which was acceptable in the regression analysis [73].
Table 5 presents the estimation results of two specified models. Two model validity tests (Arellano–Bond test and Hansen test) showed that there were no serial correlation and overidentification problems with the dynamic panel estimator. In Model 1, DIS (β = −0.358, p < 0.000) had a negative effect on REV, implying that, when hotels are closer to a beach, they generate higher revenues. Therefore, H1 is supported. Lagged REV (β = 0.719, p < 0.000) showed a significant positive effect on REV, indicating that hotel revenues in the previous year affect revenues in the subsequent year. Regarding the environmental factors, TEM (β = 0.506, p < 0.000) and VIS (β = 0.113, p = 0.021) showed significant positive effects on REV. These findings reveal that hotels generate higher revenues in warmer weather conditions while better visibility levels can lead to increases in hotel revenues. Hence, H2 and H3 are supported. In line with the financial impact of VIS, AIR (β = −0.577, p < 0.000) and WAT (β = −0.020, p < 0.000) were negative on REV, showing that hotels in a destination with cleaner air and water quality earn higher revenues. These results support H4 and H5. Turning to the control variables, CPI (β = 4.887, p < 0.000) and GDP (β = 0.407, p < 0.000) exerted a positive effect on REV, meaning increases in overall product prices and overall economy contribute to hotel revenues.
The analysis of Model 2 with the dependent variable of REVP showed the same results as Model 1. DIS (β = −0.514, p < 0.000) was negatively related to REVP, implying that, as the distance to a beach decreases, hotel RevPAR tends to increase. Lagged REVP (β = 0.403, p < 0.000) was significant on REVP, indicating that higher hotel RevPAR of the previous season leads to an increase in RevPAR in the subsequent season. Regarding the environmental factors, TEMt (β = 0.173, p = 0.027) and VISt (β = 0.081, p = 0.041) were positive on REVPt, showing that an increase in temperature and visibility level leads to higher hotel RevPAR. AIRt (β = −0.675, p < 0.000) and WATt (β = −0.010, p < 0.000) had a negative effect on REVPt, meaning that hotel RevPAR is lower at a destination with heavy air pollution and water pollution compared to cleaner destinations. These estimation results from Model 2 confirm that the proposed hypotheses (H1 through H5) are supported by our empirical analysis. The economic variables of CPI (β = 4.957, p < 0.000) and GDP (β = 0.942, p < 0.000) had a positive impact on REVPt, indicating the presence of an economic impact on hotel performance.

5. Discussion

This empirical analysis provided important results for the tourism and hotel industries. First, a negative relationship was found between the distance to a beach and hotel financial performance. A 1% closer location of hotels to beaches increased hotel revenues and RevPAR by 0.36% and 0.51%, respectively. This finding demonstrates that beaches, a coastal resource, are an important consideration in tourists’ decision making, particularly hotel selection, which is consistent with Botero et al. [30] and Hart [9]. According to the RMT and NRBV, resources characterized as being valuable, rare, inimitable, and supported organization-wide can contribute to strategic capabilities including pollution prevention, product stewardship, and sustainable development [9,12]. As being highlighted by the product stewardship of NRBV, this study reaffirms that secured and exclusive access to a beach is a valuable resource that generates competitive advantages in the tourism context by enhancing location specificity. Second, this study highlights that environmental factors are critical in NBT-related purchases. The importance of the pollution prevention and environmental conditions, which is one of capabilities specified by NRBV has often been manifested in explaining seasonal fluctuations in demand for NBT [74]. Such seasonal preferences arise as a result of tourists’ systematic efforts to avoid uncertainties regarding environmental factors, including weather and climate. However, although tourists visit NBT destinations in the best season, environmental risks cannot be completely removed. Therefore, it is necessary to understand how changes in such external environmental factors translate into tourism business performance. Our findings theoretically confirm that pollution prevention and environmental quality directly interact with hotels’ financial performance and provide empirical evidence of all four location-specific environmental factors’ significant financial impact.
Specifically, this study proves the positive effect of temperature on hotel performance, which is consistent with Moore [40]. A 1% increase in temperature leads to a 0.51% increase in hotel revenues and a 0.17% increase in RevPAR. According to Scott et al. [55], there is an optimum temperature zone for tourism activities at coastal destinations. Our results show that hot temperatures are preferred by coastal tourists. The significant relationship between visibility and hotel performance is also confirmed. A 1% increase in visibility results in a 0.11% increase in hotel revenues and a 0.08% increase in RevPAR. Extant tourism studies have claimed that, the farther tourists can see objects, the better it is for tourism activities [46,48]. The visibility level of a destination influences NBT because high visibility enables tourists to appreciate the greatness of landscape and enjoy the uniqueness of the natural resources [74]. Regarding coastal destinations, high visibility allows various marine leisure activities, such as aircraft flying, skydiving into water, and even snorkeling [75,76]. Consistent with the previous literature, our empirical finding demonstrates the positive effect of visibility on hotel revenues.
The last environmental factors investigated were air and water quality. The commercialization and growth of coastal destinations are inevitably accompanied by the deterioration of air and water quality. Polluted air and water can bring health problems [12], interfere with tourism activities [58], and further negatively influence tourism demand [77]. This study corroborates the previous findings by showing the negative effects of air and water quality on hotels’ financial performance. When air quality improves by 1%, hotel revenues and RevPAR increase by 0.58% and 0.68%, respectively. With a 1% improvement in water quality, hotel revenues and RevPAR increase by 0.02% and 0.01%, respectively. These significant effects indicate that the level of air and water pollution is substantially considered in tourism destination selection, thereby implying that tourists prefer to visit beach destinations with clean environmental conditions so that they can enjoy healthy beaches and natural resources in coastal areas. However, the findings may not necessarily mean that checking the level of pollution is one of the prevailing tourist behaviors when selecting beach destinations. Rather, a reasonable inference drawn from the finding is that, when there are pollution issues that can seriously degrade the hedonic values of beach destinations, they affect tourists’ destination decisions. Moreover, the serious pollution status of tourism destinations can readily be shared in almost real time through online platforms. These active information exchanges among tourists can facilitate the consideration of pollution in their destination selections. In order to summarize, the findings of the financial effect of the four environmental factors emphasize their pivotal role as location-specific tourism resources in destination selection and purchase decisions.

6. Conclusions

In conclusion, this study investigated the pivotal role of leveraging both internal capabilities and external location-specific resources, particularly coastal and environmental factors, in driving the competitiveness and profitability of tourism firms operating in beach destinations. Specifically, the study indicates that
−
The presence of coastal resources like beaches significantly impacts hotel revenues, indicating natural attractions can be valuable assets for local tourism businesses if leveraged effectively.
−
Environmental factors such as clean environments play a crucial role in determining hotel revenues and shaping competitiveness of tourism businesses in beach destinations.
−
A hotel’s competitiveness depends not only on its internal resources but also on its ability to capitalize on location-specific resources provided by the destination.
−
The findings have theoretical implications, highlighting the relationship between natural/environmental factors and firm performance.
−
The findings also have practical implications, suggesting that by understanding and leveraging location-specific resources adeptly, tourism businesses can boost competitiveness and financial performance.

7. Implications

7.1. Theoretical Implications

The theoretical contributions of this study are threefold. First, we analyzed the effects of coastal resources and environmental factors in a holistic approach to support the NRBV approach. By including product stewardship capability and pollution prevention capability, sustainable development strategy has been crystalized in terms of financial performance. This approach enables us to theorize NRBV in the body of NBT from a tourism perspective. Rather than spotlighting a single factor, such as temperature [78], climate [79], or pollution [80], this study extensively investigated five coastal resources or environmental factors in major U.S. tourism destinations. Using this holistic analysis approach, this study can draw a comprehensive picture of their systematic effects on customer decisions in the hotel industry.
Second, this study contributes to the literature by extending the RBT to NRBV including natural resources and environmental factors available in tourism destinations. Under the NRBV, valuable and inimitable resources are the key drivers of superior performance over competitors. This study provides empirical evidence that natural attractions and environmental conditions in NBT destinations can be such underlying location-specific resources that make the destinations distinctive. Such distinctiveness of the NBT destination provides economic benefits to local businesses, confirming the NRBV in the tourism context. Further, our findings show that the corporate ability to utilize or access publicly available resources can bring competitive advantages to hotel businesses, thereby demonstrating the importance of organizational capabilities to capitalize on resources.
Third, this study contributes to the tourism literature by identifying determinants of firm-level performance in an NBT context. As defined by Valentine [81], “nature-based tourism is primarily concerned with the direct enjoyment of some relatively undisturbed phenomenon of nature”, and factors such as pollution and aesthetic loss actually affect nature tourists’ activities and experiences. Although NBT has long been one of the most popular preferences of tourists [82], few tourism studies have explored the contributions of natural attractions and their environmental conditions to financial performance. Therefore, this study prospectively extends the research area of NBT into financial and managerial domains.

7.2. Practical Implications

Our findings also have implications for tourism stakeholders. First, the findings reveal that location-specific coastal resources and environmental factors are the primary considerations in hotel selection. Thus, hotels should not only make it easier for customers to access natural resources around the hotels, but also develop various programs that allow customers to fully enjoy them. Furthermore, tourism marketers are advised to focus more on their natural attractions and clean environmental conditions in destination or business promotions. Second, our findings highlight the importance of location selection for operations as a way to obtain key resources driving superior firm performance in the tourism industry. Location has been one of the most critical attributes for hotels [83]. Entering a new tourism destination means that hotels can access location-specific resources available in that destination. Especially when location-specific resources are unique and valuable, hotels can gain the competitive advantage of having easy access to resources by being located close to them. In this sense, location selection becomes a strategic imperative for determining hotels’ competitive position over their competitors.
Third, this study demonstrates that, as hotels are close to coastal resources and located in clean environment areas, they experience better financial performance. This finding can help new hotels entering destinations with natural resources and good environment quality secure financial stability in the development phase by attracting investors. To provide accommodation services, hotels should construct new buildings for hotel operations or convert existing buildings into operational hotel facilities. This development phase at the beginning of the hotel business requires high capital investment and a considerable amount of time for construction (1–3 years) [84]. Therefore, hotels are generally exposed to significant financial risk in the development phase. However, such development risk can be less for hotels that can effectively take advantage of natural resources and environmental conditions in tourism destinations. Hotels with location-specific advantages are proven to outperform their competitors so that their business projects are appealing to investors as a safe and stable investment option. These hotels should be able to utilize locational competitiveness to raise the capital, thereby stabilizing the financial status during the development phase.
Fourth, DMOs should promote natural resources as well as environmental factors to attract tourists. This study successfully reaffirmed that coastal resources and environmental factors influence hotel performance under NBT. These results could imply that promotion campaigns emphasizing clean environmental conditions with customized seasonal tourism products and activities could be mutually beneficial to an NBT destination and local hotels. For example, the Hawaii CVB (https://www.gohawaii.com/, accessed on 13 February 2024) shares magnificent scenic views through its website, which have been posted by not only the CVB but also tourists. This tourism organization also provides environmental conditions of each key location, travel tips based on weather, and customized travel plans for seasonal visits. Likewise, providing the combined information of natural coastal resources and social and community resources (events, cultural heritage, and experiences) could be an effective marketing option that makes the synergistic effects for both destinations and tourism businesses. The Galveston CVB further informs tourists and surfers of water conditions, water temperature, and recommended beaches with nearby accommodations. This information could be shared with hotels that are one of the constituents of the NBT at the destination, so more tourists can enjoy various coastal resources at the destination. As a result, it is desirable for coastal hotels to work closely with local DMOs or CVBs to leverage information sharing and communication with prospective tourists.
Fifth, social responsibility and eco-tourism could be derivative consequences that coastal hotels and destination CVBs can pursue together. The Florida CVB (www.visitflorida.com, accessed on 13 February 2024) highlights eco-tourism by introducing tips for eco-friendly travel in Florida. The organization also shares Florida’s natural attractions along with a list of eco-friendly resources as part of its sustainable tourism campaign called “Going Green in Florida”. In addition, hotels are encouraged to be part of this eco-friendly tourism movement in this state. Therefore, tourists visiting Florida may expect more eco-tourism and sustainable tourism focusing on the value of being in nature. Moreover, the Florida CVB equally highlights “voluntourism” to establish another sustainable development model together with tourists, the end product users. In other words, information including natural environment and pollution is purposely shared not just to let tourists know of unpleasant facts related to tourism, but also to invite them to be part of the conservation efforts, and hence creates value. These various tourism resources were created from collective efforts for sustainable tourism, and the resulting clean environmental conditions should be utilized as a marketing tool for NBT destinations as well as tourism business.
Finally, understanding natural and environmental determinants of financial performance is important not only for tourism firms, but also for local governments. With a deeper understanding of such factors, governments can develop effective communication and marketing strategies as well as resource allocation plans and tourism policies to protect the quality of natural resources and environments while promoting their tourism destinations. For example, continuous investments for beach nourishment and clean environments and tourism policies to cap the number of beach users can be viable protection measures for maintaining the competitiveness of NBT destinations in the market. Further, it is important to secure sustainable funding sources to carry out tourism resource protection measures in the long run. Thus, governments may consider the introduction of environment taxes to be paid by tourists or municipality taxes.

8. Limitations

This study is not without limitations. Aggregated hotel data were used for the data analysis. Although the data analysis revealed the overall financial impacts of coastal resources and environmental factors, this limitation may make it difficult to apply the findings to individual hotel operations. In addition, the sample included only large and popular tourism destinations in the U.S. Thus, the external validity of the findings should be verified in different tourism destinations to ensure the generalizability of the findings. Furthermore, we did not consider characteristics of individual hotel operations, such as brand and size, which may moderate the effects of coastal resources and environmental factors on hotels’ financial performance. Future research should identify firm-level moderators on their relationships.

Author Contributions

Conceptualization, X.W., J.K. (Jewoo Kim) and J.K. (Jaewook Kim); Methodology, X.W.; Software, X.W.; Validation, J.K. (Jewoo Kim) and J.K. (Jaewook Kim); Formal analysis, X.W.; Investigation, X.W., J.K. (Jewoo Kim), J.K. (Jaewook Kim) and Y.K.; Resources, J.K. (Jaewook Kim) and Y.K.; Data curation, X.W. and Y.K.; Writing—original draft, X.W. and J.K. (Jewoo Kim); Writing—review & editing, J.K. (Jewoo Kim), J.K. (Jaewook Kim) and Y.K.; Visualization, X.W.; Supervision, J.K. (Jewoo Kim) and J.K. (Jaewook Kim). All authors have read and agreed to the published version of the manuscript.

Funding

This work was supported in part by the Guangdong Higher Education Upgrading Plan (2021–2025) of “Rushing to the Top, Making Up Shortcomings and Strengthening Special Features” with No. of UICR0400031-21.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

The data presented in this study are available on request from the corresponding author.

Conflicts of Interest

The authors declare no conflict of interest.

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Table 1. Key to variables.
Table 1. Key to variables.
VariableDescription
ln Log transformation indicator
REVTotal room revenue per zip code
REVPAverage RevPAR per zip code
DISAverage distance (mile) from hotels to nearest beaches per zip code
TEMAverage temperature (°C)
VISAverage visibility
AIRAverage air quality
WATAverage water quality
CPIState consumer price index
GDPState GDP
YEARYear dummy
REGIONDummy for regions
Table 2. Panel unit root test.
Table 2. Panel unit root test.
VariableIPS StatisticVariableIPS Statistic
lnREV−0.493ln∆REV−4.489 ***
lnREVP−0.724ln∆REVP−4.660 ***
lnTEM−2.798 ***ln∆TEM−5.522 ***
lnVIS−2.129 ***ln∆VIS−4.525 ***
lnWAT−2.149 ***ln∆WAT−2.589 ***
lnAIR−2.902 ***ln∆AIR−8.583 ***
Note: The null hypothesis is a variable contains unit roots. *** p < 0.001.
Table 3. Descriptive statistics.
Table 3. Descriptive statistics.
VariableMinimumMaximumMeanStandard
Deviation
REV4.541794.4292.74192.78
REVP64.841010.38261.50136.35
DIS0.5073.7731.6520.45
TEM9.7920.3216.363.10
VIS7.759.918.820.65
AIR7.2223.8215.592.92
WAT1.56433.67117.2894.83
CPI190.00272.17223.2818.21
GDP0.2610.995.432.45
REV is in millions and GDP is in billions.
Table 4. Correlation analysis results.
Table 4. Correlation analysis results.
VariablelnREVlnREVPlnTEMlnVISlnWATlnAIRlnDISlnCPIlnGDP
lnREV1
lnREVP0.783 *1
lnTEM0.123 *0.125 *1
lnVIS0.322 *0.426 *0.545 *1
lnWAT−0.400 *−0.450 *−0.420 *−00.449 *1
lnAIR−0.323 *−0.261 *−0.803 *−0.513 *0.599 *1
lnDIS−0.512 *−0.449 *−0.078 *−0.377 *0.389 *−0.335 *1
lnCPI0.376 *0.569 *0.151 *0.663 *−0.515 *−0.243 *−0.398 *1
lnGDP−0.403 *−0.328 *−0.600 *−0.646 *0.611 **0.809 *0.519 *−0.291 *1
* Correlation is significant at the 0.05 level (2-tailed); ** p < 0.01.
Table 5. Estimation results.
Table 5. Estimation results.
VariableModel 1 (lnREV) Model 2 (lnREVP)
lagged term0.719 ***0.403 ***
lnDIS−0.358 ***−0.514 ***
lnTEM0.506 ***0.173 *
lnVIS0.113 *0.081 *
lnAIR−0.577 ***−0.675 ***
lnWAT−0.020 ***−0.010 *
lnCPI4.887 ***4.957 ***
lnGDP0.407 ***0.942 ***
Arellano-Bond test
AR(1)−5.95 ***−6.00 ***
AR(2)−0.100.27
Hansen’s J36.0836.53
*** log is the indicator of logarithmic transformation. p < 0.001, * p < 0.05.
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Wang, X.; Kim, J.; Kim, J.; Koh, Y. Application of Natural-Resource-Based View to Nature-Based Tourism Destinations. Sustainability 2024, 16, 2375. https://doi.org/10.3390/su16062375

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Wang X, Kim J, Kim J, Koh Y. Application of Natural-Resource-Based View to Nature-Based Tourism Destinations. Sustainability. 2024; 16(6):2375. https://doi.org/10.3390/su16062375

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Wang, Xi, Jewoo Kim, Jaewook Kim, and Yoon Koh. 2024. "Application of Natural-Resource-Based View to Nature-Based Tourism Destinations" Sustainability 16, no. 6: 2375. https://doi.org/10.3390/su16062375

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