The Impact of Sustainable Practice on the Indonesian Hotel’s Financial Performance: A Case Study of Cipaku Garden Hotel

Abstract

  The agenda of researchers and practitioners within the hospitality and tourism sector has focused on the need and demand for sustainable practice. Following this situation, the Cipaku Garden Hotel, as a small-to-medium-sized hotel operating in Indonesia, follows the trend that has taken place and conducts sustainable practice as part of its business activities. Accordingly, the objectives of this study are to examine the sustainable practice conducted by the Cipaku Garden Hotel, uncover the management’s perception concerning the benefits of the applied sustainable practice, and analyze the outcome and influence generated by the implemented sustainable practice on the hotel’s financial performance. Through a case study approach, it is found that the Cipaku Garden Hotel applies its sustainable practice within the form of waste management activities. Within those activities, the hotel recycles organic waste into catfish food and compost. As a result, the hotel’s waste management activities have improved its cost-saving capabilities, and it is marked by the reduction of cost on catfish care up to 49% and garden maintenance around 50%. Profit-wise, the hotel’s sustainable practice has also increased its gross profit margin and net profit margin by 8% and 4%, respectively, compared to its previous year. Thus, the sustainable practice conducted by the Cipaku Garden Hotel brings a positive impact to its financial performance.