Research Journal of Management Sciences _______________________ ______ ____ ___________ ISSN 2319 – 1171 Vol. 2 ( 5 ), 6 - 13 , May (201 3 ) Res. J. Management Sci. International Science Congress Association 6 Do quality and Environmental Management Systems help Hotels to Achieve their Financial Goals ? : Evidences from the Egyptian Hotel Industry Abou Kamar M.S. Department of Hotel Studies, Faculty of Tourism and Hotels, Menoufiya University, EGYPT Available online at: www.isca.in Received 1 6 th April 201 3 , revised 24 th April 2013 , accepted 3 rd May 2013 Abstract The relationship between quality and environmental management systems and corporate financial performance has always been an important topic in the management literature. However, only few studies have mutually analyzed these two management systems. Most of th ese studies have focused on the industrial and business sectors (such as banks and insurance companies), but these studies have ignored the hotel and tourism sector, with a few exceptions. Therefore, the purpose of thi s study is to determine the level of c ommitment of Egyptian 4 and 5 - star hotels to implement quality and environmental management systems and to evaluate the impact of this commitment on the financial performance of these hotels. The study grouped hotels according to their commitment to qualit y and environmental systems, and a two - stage cluster analysis was used to identify the significant differences between groups of hotels. Then, ANOVA and regression analysis were used to test the relationship between the commitment levels and hotel financia l performance. The results determined three levels of quality and environmental commitment. These three levels have been classified as proactive, committed, and reactive. Moreover, the results indicated that 5 - star hotels can increase their investments in quality and environmental management systems to enhance both short - term and long - term financial performance. For 4 - star hotels, however, results showed that quality and environmental management systems have no simultaneous or particular effect on their fin ancial performance. This supports the findings related to this issue in other literature on quality management in the hotel industry. Keywords: Quality management, environmental management, financial performance, hotel industry . Introduction Quality and environmental management practices may influence corporate performance. The relationship between quality and environmental management systems and corporate financial performance has always been an important topic in the operations management literature. The vast majority of empirical studies have shown a positive correlation between implementing effective quality and environmental management systems and corporate financial performance 1, 2, 3 . For t hese systems to be an integral part of the company's management system there have to be linkages so that the boundaries between processes are seamless. Management systems, whether for quality or environmental protection, share the same implementation princ iples (e.g. long - term focus, continuous improvement, employee empowerment, integrated perspective, and participation by the whole value chain) and may positively affect a firm’s competitive position 3 . Due to these parity, and because research on quality ma nagement is more sophisticated than research on environmental, considerable benefits can be expected from applying what has been learnt about quality management to environmental issues 2,4 . Firms with experience of quality management practices develop a set of capabilities that may facilitate the implementation of environmental practices and provide a means for firms to minimize their environmental management implementation costs 5 . Accordingly, firms can utilize quality management practices to develop a syst em for the reduction and elimination of all waste streams associated with the design, manufacture and use of products . Therefore, the adoption of quality management practices may enable the development and implementation of environmental management practic es 3 . The impacts of quality and environmental management systems on firm performance have been analyzed in business and service industries, although to a lesser extent in service industries such as the hotel industry. Within the service sector, hotels show great interest to the implementation of quality and environmental management systems 6 because these systems can have positive effects on the competitiveness levels of hotels, as well as their profitability 7 . Quality and environmental management practi ces can affect performance within the hotel industry in two integrated approaches. It can have internal effect through processes and operations and external effect through the market. Internal approach is related to the internal operation of the hotels (fo r example, increase in productivity, improvement in efficiency and reduction in material and production costs and reuse materials through recycling). External approach, on the other hand, is related to the effects of these systems on customer satisfaction and demand (e.g. increasing sales and market share, attracting new customers, achieving higher satisfaction levels and improving hotel image) 8 . Research Journal of Management Sciences _______________________ ______ ____ _______________________ ISSN 2319 – 1171 Vol. 2 ( 5 ), 6 - 13 , May (201 3 ) Res. J. Management Sci. International Science Congress Association 7 The relationship between quality and environmental management systems and firm performance has not been examined as deeply in the hotel industry literature as in the quality management and environmental literature. Furthermore, a few studies have jointly a nalyzed these two management systems. Accordingly, there is a need for more research to fill this gap in the hotel industry literature. The aim of this research is twofold: i. to identify the quality and environmental management commitment levels at 4 - a nd 5 - star Egyptian hotels; and ii. to test the correlation between those commitment levels and hotels financial performance. The present study makes a contribution in two main areas. Firstly, it jointly analyzes quality and environmental management systems, together with their impacts on financial performance. Secondly, considering that only few studies have analyzed organizations belonging to the service sector in general and the hotel industry in particular, this paper tries to fill this gap through an exam ination of Egyptian hotels. Research Methodology Sample and Data Collection Methods : The population in this study is composed of 2 63 4 - and 5 - star hotels located in three significant tourist regions in Egypt; namely, Greater Cairo, South Sinai (Sharm - El S heikh), and Red Sea (Hurghada, Safaga, El Gouna, and Marsa Alam). These regions were chosen as the study setting because there is a wide range of international and domestic chains and because they might have more resources to withstand the costs of impleme nting managerial systems. This population considered all the hotels regardless of whether they implement quality or environmental management systems. A study of the whole population was performed using questionnaire with closed questions. The questionnaire was sent, from January to May 2012, to the chief executive officer (CEO) of each hotel because this is the only person in the hotel who can answer all questions related to quality management, environmental management, and firm performance. The questionn aire was developed through a prudent examination of similar studies found in the literature review. In order to avoid making respondents confused or misunderstand the questions, the researcher conducted a pilot test by emailing the questionnaire to ten hot el managers and three researchers who are specialized in hotel management , asking them to go through it and give the researcher feedback to adjust the questionnaire. Their opinions and suggestions, which were based on their experiences helped modify the qu estionnaire to be more effective and easily understood. The survey instrument was in the form of a questionnaire that used a five - point Likert scale. Then, the distribution of the questionnaire was performed, and a total of 142 hotel managers answered the questionnaire, that is, 6 0 . 1 % response rate. In order to investigate the link between quality and environmental management systems and hotel performance, the study focused on hotels that have implemented these systems effectively. This is important because while most hotels will claim that they have implemented quality management systems, few are doing it effectively. Effective implementation means that the key practices of quality a nd environmental management systems are well practiced and deployed within the hotel. The study used the obtaining of quality and/or environmental certificates as proxies for effective implementation of quality and environmental management systems. Based on the objectives of this study, questions were divided into three sections. The first section of the questionnaire asked the respondents to identify their commitment to ten quality management practices which were scored on a five - point Likert scale rangin g from 1 (low degree of commitment) to 5 (high degree of commitment). The reliability of this scale was checked and a Cronbach’s alpha of 0.75 was obtained, an acceptable level indeed 8 . The second section of the questionnaire asked the respondents to iden tify their commitment to twelve environmental management practices or initiatives. The items were measured using a Likert scale ranging from 1 (low degree of commitment) to 5 (high degree of commitment). This scale uses practices related to environmental m anagement as well as a number of aspects specifically related to hotel industry. The reliability of this measuring scale was checked and a Cronbach’s alpha of 0.78 was obtained. The third section of the questionnaire asked the respondents to assess their f inancial performance by measuring the hotel’s performance compared with their competitors. F ive variables have been measured: Average sales growth in the last five years, gross operating profit, market value, market share gain, and average occupancy rate i n the last five years. These variables were selected to measure the financial performance of hotels because they include revenues and costs of the hotel. Variables were measured using a Likert scale ranging from 1 ( worse than competitors ) to 5 ( better than competitors ). It should be noted that in order to increase the explanatory and predictive capacity of the results, one control dimension from the business environment was included: hotel characteristics. This control dimension was formed by: i. hotel loca tion; ii. category (4 - and 5 - star hotels); iii. chain affiliation (hotel chain and independent); iv. hotel size (number of available rooms). Data Analysis Procedure : In the first examination of the data, descriptive statistics which include frequency distributions and cross - tabulations were computed and used to summarize data. The collected data have been classified and tabulated to be thoroughly analyzed using Statistical Package for Social Science (SPSS) version 18.0. The mean and standard deviation have been calculated to classify the sets and determine how homogenous or discrepant (inconsistent) the sample is, regarding all research variables. Research Journal of Management Sciences _______________________ ______ ____ _______________________ ISSN 2319 – 1171 Vol. 2 ( 5 ), 6 - 13 , May (201 3 ) Res. J. Management Sci. International Science Congress Association 8 Table - 1 Measurement Items Variables/Measures Factor Quality Management Measures 1. Quality certification 0.626 2. Understanding of key customers’ needs 0.697 3. Cooperation with mediators to improve the quality of products offered in the hotel 0.632 4. Cooperation with suppliers to improve the quality of products offered in the hotel 0.625 5. Training of staff in quality - related issues 0.720 6. Encouraging self - motivated employee 0.722 7. Collective participation in the elaboration of the product offered 0.732 8. Continual service improvement process 0.749 9. Reasonableness of the hotel's compliance monitoring processes 0.866 10. Building a culture for continuous improvement and initiatives 0.759 Eigenvalue per factor 4.188 % of variance explained per factor 62.78% Accumulated % of variance explained 62.78% Environmental Management Measures 1.Environmental certification 0.633 2. Purchase of ecological products 0.796 3. Using of eco - friendly products 0.756 4. Energy and water conservation practices 0.840 5. Selective solid waste collection 0.872 6. Recycling and materials management 0.762 7. Training of staff in in environmental - related issues 0.713 8. Encouraging self - motivated employee 0.827 9. Use of ecological arguments in marketing campaigns 0.823 10. Organization of environmental activities by the firm 0.856 11. The hotel has a long - term environmental planning 0.678 12. The perceived costs and benefits 0.829 Eigenvalue per factor 4.99 % of variance explained per factor 59.94% Accumulated % of variance explained 65.17% Financial Performance Variables 1. Average sales growth in the last five years 0.904 2.Gross operating profit (GOP) 0.859 3.Market value 0.855 4.Market share gain 0.876 5. Average occupancy rate 0.765 Eigenvalue per factor 4.51 % of variance explained per factor 55.10% Accumulated % of variance explained 67.45% A two - stage cluster analysis was performed to identify the significant differences between hotels. Then, ANOVA and regression analysis were used to test the relationship between the commitment levels and hotel financial performance. Results and Discussion Regarding the sample, 55% of the respondents were 4 - star hotels whereas 45% were 5 - star hotels. The average number of employees in the investigated hotels was 146; the maximum number of employees was 627 employees. The average number of available rooms in the investigated hotels was 292 rooms and 341 beds. Finally, regarding the type of hotel managem ent, 56% of the establishments were chain affiliated, whereas the remaining 44% were independent. Average occupancy rates ranged from 30% to 75%. Occupancies of 50% or less were reported by 32% of the hotels. Almost one quarter of the hotels (23%) experien ced occupancies over 75%. A two - stage cluster analysis of the quality and environmental variables was performed in order to identify the different levels of commitment to quality and the environment. Cluster analysis Research Journal of Management Sciences _______________________ ______ ____ _______________________ ISSN 2319 – 1171 Vol. 2 ( 5 ), 6 - 13 , May (201 3 ) Res. J. Management Sci. International Science Congress Association 9 is a convenient method for identifying homogenous groups of clusters. Objects in a specific cluster share many characteristics, but are very dissimilar to objects not belonging to that cluster. First of all, a hierarchical cluster was used with the average linkage clustering method and the squ ared Euclidean distance served to find out the number of groups, after which a non - hierarchical cluster was applied 8 . After the hierarchical cluster analysis and the application of the percentual change criterion in the agglomeration coefficient, the ideal number of groups to be considered was found to be three. A non - hierarchical cluster for three groups was then prep ared using the given variables. Moreover, the following analyses were performed in order to validate the cluster solution. Firstly, a significant test for the variables used to obtain the clusters6 For this purpose, Pearson’s chi - square test was carried out, which verified that all varia bles were independent of the cluster variable and, therefore, that all variables are relevant for the interpretation of the group obtained, since all are significant with a 95% confidence level. Secondly, a discriminant analysis revealed that 96% of the or iginal grouped cases were correctly classified a posteriori after knowing the discriminant function that includes all the cases except the one being studied. Thus, the two - stage cluster analysis proved to be valid 8 . At this point, the quality and environm ental groups were defined and interpreted. Table - 2 provides the average scores for each group for each practice and the significant test for the variables used to obtain the clusters. The following three clusters were identified : Group 1: Proactive Hotels . This group formed of 32 hotels (22 % of the total). Hotels in this group have always achieved above the average in all quality and environmental measures and therefore achieved the highest scores in every single practice. Regarding descriptive variables, this group includes the hotels with a significantly higher number of rooms and with the greatest number of quality and environmental certificates. Most of the hotels in this group were affiliated to a hotel chain. Therefore, considering that it includes t he hotels with the greatest volume of resources and the most developed management levels, it would seem logical to assume that this should be the group showing a higher degree of quality and environmental commitment. Group 2 : Defensive or Committed Hotels . This group formed of 75 hotels (53 % of the total). Hotels in this group have always achieved above the average in its commitment to quality management practices, but in terms of environmental management practices, this group is below the average. Regard ing descriptive variables, the hotels belonging to this group are in an intermediate situation with r espect to the other two groups. Group 3: Reactive Hotels. This group formed of 35 hotels (25 % of the total). Hotels in this group have achieved the lowes t average scores for every quality and environmental practices which suggests that these hotels are not very interested in training, purchasing of ecological products, managing solid wastes, quantifying environmental economic benefits or in the use of ecol ogical arguments in marketing campaigns. This suggests that because these hotels may own fewer resources and their management level is not as highly sophisticated as that of group 1 hotels, these hotels will perhaps dedicate their efforts to areas other th an quality and environmental management which they consider more relevant for them to be able to compete. In order to complete the description of these groups, a comparison was made using a number of measures commonly used in the analysis of financial per formance as controls. These measures include: hotel location (city hotel or resort hotel); hotel category (4 - and 5 - star hotels); chain affiliation (independent or chain - affiliated hotel) and hotel size (number of available guestrooms). As can be seen in table - 3, quality and environmental management commitment increase in parallel with those dimensions. Thus, quality and environmental management proactive hotels are resort hotels, 5 - star hotels, have more guestrooms, and are chain - affiliated hotels This section tests the relationship between quality and environmental commitment levels and financial performance variables measured. As can be seen in table - 4, quality and environmental management proactive hotels have higher financial performance in all measu res. Therefore, a significant relationship seems to exist between the degree of quality and environmental proactivity and hotel performance. Consequently, the values of performance variables increase with the degree of hotel proactivity toward quality and environmental management. This result indicates that, to a certain extent, the greater level of quality and environmental proactivity of hotels will allow them to increase their chances of success due to the reasons related to differentiation and cost savi ng. These findings reveal that more proactive hotels tend to achieve better performance levels and, as shown in table 3, they are usually larger - sized and tend to have a higher category. It can be understood from table - 4 that group 1 got significantly hig her financial performance levels than other groups. The difference is significant at the 1% level in a two - tailed test. Proactive firms experienced higher growth in sales in the last five years when compared other firms. Proactive firms had a mean percent of 3.58 in sales compared to 2.93 for reactive firms. The difference is significant at the 0.01 p ≤ 0605 level6 Moreover, proactive firms appear to do better in improving gross operating profit, market value, and market share gain. Proactive firms’ averag e occupancy rates scored 65.55 % compared to a 61.76 % for reactive firms. A key implication of these results is that quality and environmental management practices do have a positive impact on the profitability of proactive firms. More significantly, proa ctive firms tend to benefit more from quality and environmental management systems when compared to committed and reactive firms. Research Journal of Management Sciences _______________________ ______ ____ _______________________ ISSN 2319 – 1171 Vol. 2 ( 5 ), 6 - 13 , May (201 3 ) Res. J. Management Sci. International Science Congress Association 10 Table - 2 Levels of Hotels Commitment to Quality and Environmental Management Variables Group 1 Proactive n= 32 Group 2 Committed n= 75 Group 3 Reactive n=35 Mean Sign. QM Commitment 4.29 3.73 2.11 3.38 0.000 1 Quality certification 4.16 4.31 3.08 3.85 0.000 2 Understanding of key customers’ needs 3.21 3.86 2.67 3.24 0.000 2 Cooperation with mediators to improve quality 4.46 3.52 2.12 3.37 0.000 2 Cooperation with suppliers to improve quality 4.42 3.77 2.59 3.59 0.000 2 Training of staff in quality - related issues 4.27 3.35 2.35 3.32 0.000 2 Encouraging self - motivated employee 4.21 3.50 1.93 3.21 0.000 2 Participation in the elaboration of the products 4.34 3.78 1.84 3.32 0.000 2 Continual service improvement process 3.97 3.84 2.89 3.56 0.000 2 Reasonableness of compliance monitoring processes 4.74 3.80 2.71 3.75 0.000 2 Building a culture for continuous improvement 4.09 3.49 2.27 3.28 0.000 2 EM Commitment 3.16 2.73 2.11 2.66 0.000 1 Environmental certification 3.55 2.43 1.75 2.57 0.000 2 Purchase of ecological products 4.52 2.24 1.83 2.86 0.000 2 Using of eco - friendly products 4.95 2.28 2.12 3.11 0.000 2 Energy and water conservation practices 4.46 2.44 2.50 3.16 0.000 2 Selective solid waste collection 4.33 2.22 1.89 2.81 0.000 2 Recycling and materials management 3.37 2.54 2.31 2.65 0.000 2 Training of staff in in environmental - related issues 3.22 2.43 1.67 2.44 0.000 2 Encouraging self - motivated employee 3.97 2.45 1.29 2.26 0.000 2 Use of ecological arguments in marketing campaigns 4.11 1.42 1.50 2.61 0.000 2 Organization of environmental activities by the firm 3.43 1.32 1.33 1.76 0.000 2 The hotel has a long - term environmental planning 3.01 2.11 1.25 2.11 0.000 2 The perceived costs and benefits 3.85 1.89 1.65 2.46 0.000 2 (1) ANOVA , (2) Pearson’s chi - square Table - 3 Comparison of Characteristics between the Identified Groups Variables Group 1 Group 2 Group 3 Sign. * Hotel Location (0: City hotel; 1: Resort hotel) 0.61 0.43 0.48 0.056 Hotel Category (4 - and 5 - star hotels) 5.00 4.49 4.22 0.044 Hotel Affiliation (0: independent; 1: chain - affiliated) 0.91 0.39 0.48 0.068 Hotel Size (smaller versus larger) 467.56 220.97 188.34 0.056 (*) Pearson’s chi - square Table - 4 Comparison of Financial Performance between the Identified Groups Financial Performance Variables Group 1 Group 2 Group 3 F ANOVA Average sales growth in the last five years 3.58 3.11 2.93 7.212 ** Gross operating profit (GOP) 3.90 2.89 2.67 4.207 ** Market value 3.92 3.57 3.44 7.627 * Market share gain 3.68 3.33 2.99 11.015 * Average occupancy rate 65.55 61.83 61.76 1.44 * p ≤ 0601 , ** 0.01 p ≤ 0605 Research Journal of Management Sciences _______________________ ______ ____ _______________________ ISSN 2319 – 1171 Vol. 2 ( 5 ), 6 - 13 , May (201 3 ) Res. J. Management Sci. International Science Congress Association 11 Table - 5 Multiple Regression Analysis between Research Variables Independent Variables Dependent Variables Sales Growth GOP Occupancy Rate Market Share Market value QM 0.122 0.124*** 0.143** 0.769*** 0.422 EM 0.174* 0.123 0.172** 0.125** - 0.114 Hotel Size 0.432*** 0.589*** 0.451*** 0.026 - 0.039 F 11.154*** 31.247*** 5.501*** 8.730*** 11.899 R 2 adjust 0.143 0.327 0.061 0.097 0.160 * 0.05 p ≤ 061 , ** 0.01 p ≤ 0605 , *** p ≤ 0601 Table - 6 Multiple Regression Analysis between QMEM and Financial Performance Independent Variables Dependent Variables Sales Growth GOP Occupancy Rate Market Share Market value QMEM 0.565*** 0.216** 0.198** 0.276*** 06030 Hotel Size 0 6 436*** 0.653*** 0.139* 0.023 0.018** F 18.089** 23.202*** 4.733** 10.608** 11.302 R 2 adjust 0.116 0.321 0.028 0.063 0.115 * 0.05 p ≤ 061 , ** 0.01 p ≤ 0605 , *** p ≤ 0601 Therefore, it seems advisable for these hotels to position themselves on an active commitment strategy in order to improve their financial performance. Moreover, multiple linear regressions were applied in which financial performance measures were used as dependent variables and quality and environmental commitment levels as the independent variables; and hotel size was used as a control variable. It can be seen from table - 5 that all the multiple regression values proposed are significant except for the market value. In addition, quite divergent rates are found for the determination coefficient adjusted between the different models. This shows that the different quality and environmental management commitment levels influence each performance variable to a different extent. Regarding financial performance variables, sales growth rate in the last five years is slightly influenced by environmental commitment ( p ≤ 0601 ). Quality management commitment affects this variable adversely. Quality management commitment increases the gross operating profit significant ly ( p ≤ 0601)6 Quality management commitment also influences hotel market share significantly ( p ≤ 0601), environmental commitment impacts hotel market share positively ( p ≤ 0601)6 Regarding occupancy rate in the last five years, quality and environmental management commitments have a positive influence (p 0.05). When quality and environmental management items are integrated together in the same variable (QMEM) (see table - 6), similar results are obtained. QMEM has significant regression coefficients in all financial variables analyzed except for market share. Furthermore, regression analyses show quite different values in the determination coefficient. Regarding hotel size as a control variable, this variable has a significant influence on dependent vari ables. Discussion and Conclusion : The purpose of this study was to determine the degree of commitment of Egyptian 4 and 5 - star hotels to implement quality and environmental management systems and to test the impact of this commitment on the financial perfo rmance of these hotels. The study grouped hotels according to their commitment to quality and environmental systems, and a two - stage cluster analysis was used to identify the significant differences between groups of hotels. Then, ANOVA and regression anal ysis were used to test the relationship between the commitment levels and hotel financial performance. The result of the cluster analysis indicated that the hotels could be grouped into three clusters, based on quality and environmental management commit ment. The first of these groups was composed of hotels that showed have always achieved above the average in all quality and environmental measures and therefore achieved the highest scores in every single practice. The second group was made up of defensiv e or committed hotels that have always achieved above the average in its commitment to quality management practices, but in terms of environmental management practices, this group is below the average. The final group was made up of reactive hotels that we re reactive in terms of both quality and environmental management. Each group had different features and reflected different levels of commitment to quality and environmental management practices. L arge hotels (in terms of number of available rooms) put in place more comprehensive quality and environmental programs than their counterparts. These results may be explained through the concomitant effect of economies of scale and the existence of slack resources. The latter aspect reveals that firms need a mi nimum quantity of financial and human resources to deploy Research Journal of Management Sciences _______________________ ______ ____ _______________________ ISSN 2319 – 1171 Vol. 2 ( 5 ), 6 - 13 , May (201 3 ) Res. J. Management Sci. International Science Congress Association 12 quality and environmental management programs, especially because returns on investments can only be achieved in the medium or long - term 1 . Furthermore, large firms are exposed to considerable environmental pressures from stakeholders because a their environmental impact is more visible; b it is easier to control centralized sources of pollution than disperse ones; c large firms are regarded as industry’s leaders and, thus, constitute models to imitate. Another stream of research contends that large firms develop more advanced environmental management because i. they have slack resources to be invested in environmental protection; ii. large firms usually ad opt a more formal management and this in turn implies a more formal environmental management; iii. they may have economies of scale for the reuse, recycling or valuation of waste. All these factors can influence the hotel industry in the same way 1, 8, 10, 11 . This study also found that chain - affiliated hotels are more likely to implement quality and environmental strategies because they may support individual units by: i. providing them with training on quality and environmental management techniques, meth ods and/or activities; ii. facilitating their inclusion in programs or activities already functioning or that are known to be useful; iii. providing technical advice to hotels that start up such activities; iv. easing their access to more ecological market s 1, 12, 13 . Similar to size and degree of internationalization, the higher the grade that the hotel has, the greater the volume of assets and employees per room it has and hence its ability to implement quality and environmental strategies. Therefore, fou r - star hotels need to carefully examine the effects of quality and environmental management systems on financial performance, when making quality and environmental management related decisions. Looking at the obtained results, it can be seen that the impl ementation of effective quality and environmental management strategies can improve hotel financial performance, although some aspects of financial performance may be improved more than others. The results indicated that quality and environmental managemen t commitment significantly and positively influence short - term financial performance. Those hotels whose quality and environmental management practices are more developed believe that their financial performance is better than their counterparts. These res ults are line with the findings of other studies in manufacturing and service industries 14, 15, 16, 17 . Therefore, although some findings pointed out that in the hotel industry there is no link between quality and environmental management practices and fin ancial success, the findings of this study extends the findings of previous studies in manufacturing and service industries to the context of the hotel industry. These positive effects of quality and environmental management practices on performance may ta ke different forms: for example, increasing profitability (through a cost reduction) and increasing sales (through an improved image) 8 . All the multiple regression values proposed are significant except for the market value. In addition, quite divergent r ates are found for the determination coefficient adjusted between the different models. This shows that the different quality and environmental management commitment levels influence each performance variable to a different extent. Regarding financial perf ormance variables, sales growth rate in the last five years is slightly influenced by environmental commitment. On the other hand, quality management commitment affects this variable adversely. Quality management commitment increases the gross operating pr ofit significantly. Moreover, quality management commitment also influences hotel market share significantly. Quality and environmental management commitments may have positive effects in increasing occupancy rate in the last five years. When quality and environmental management systems are jointly integrated in the same variable (QMEM), similar results are obtained. QMEM has significant regression coefficients in all performance variables analyzed except for market value. Hotel size as a control variable has a significant influence on financial performance in the regression analyses. Therefore, separate and joint quality and environmental management commitment levels exert a heterogeneous influence in terms of intensity and direction. This fact may explain the absence of homogeneous relationships between quality management and firm performance and between environmental management and firm performance obtained in previous studies, because they have used different performance variables. Conclusion The main findings of this study are consistent with some previous literature that evidences a positive and significant relation between the commitment to quality and environmental practices and firms financial performance. On the basis of the results obtained, f indings suggest that 5 - star hotel companies can confidently and strategically increase quality and environmental management investment to enhance both short - term and long - term performance. For 4 - star hotels, however, results showed that quality and environ mental management systems have no simultaneous or particular effect on financial performance . References 1. Álvarez J., de Burgos J. and Céspedes J., An analysis of environmental management, organizational context and performance of Spanish hotels, Omega , (29) , 457 - 471 (2001) 2. Kaynak H., The relationship between TQM Practices and their effects on firm performance , Journal of Operations Management , 21(4) , 405 - 435 (2003) 3. Pereira - Moliner J., Claver - Cortés E., Molina - Azorín F. and Tarí L., Quality management, en vironmental management Research Journal of Management Sciences _______________________ ______ ____ _______________________ ISSN 2319 – 1171 Vol. 2 ( 5 ), 6 - 13 , May (201 3 ) Res. J. Management Sci. International Science Congress Association 13 and firm performance: direct and mediating effects in the hotel industry , Journal of Cleaner Production , (37) , 82 92 (2012) 4. York K. and Miree C., Causation or variation: An empirical re - examination of the link between TQM and financial performance , Journal of Operations Management , (22) , 291 - 311 (2004) 5. Zeng S., Shi J. and Lou G., A synergetic model for implementing an integrated management syst em: an empirical study in China , Journal of Cleaner Production, (15) , 1760 1767 (2007) 6. Kimes S., How product quality drives profitability , Cornell Hotel and Restaurant Administration Quarterly , 42(3) , 25 - 28 (2001) 7. Antony J., Antony F. and Ghosh S., Evalua ting service quality in a UK hotel chain: A case study , International Journal of Contemporary Hospitality Management , 16(6) , 380 - 384 (2004) 8. Claver - cortés E., Molina - azorín J., Pereira - moliner J. and Tarí J., Quality management, environmental management and firm performanc e in the Spanish hotel industry, International Journal of Management Reviews , 11(2) , 197 - 222 (2008) 9. Wilkins H. , Merrilees B. and Herington C., Towards an understanding of total service qu ality hotels m, International Journal of Hospitality Management , (26) , 840 853 (2007) 10. Chan W., Partial analysis of the environmental costs generated by hotels in Hong Kong , Tourism Management , (24) , 517 - 531 (2005) 11. McNamara K. and Gibson C., Environmental su stainability in Practice? A macro - scale profile of tourist accommodation facilities in Australia’s coastal zone , Journal of Sustainable Tourism, 16(1) , 85 - 100 (2008) 12. Ayuso S., Adoption of voluntary environmental tools for sustainable tourism, analyzing the experience of Spanish hotels , Corporate Social Responsibility and Environmental Management , 13(4) , 207 - 220 (2006) 13. Bohdanowicz P., Environmental awareness and initiatives in the Swedish and Polish hotel industries - survey results. International Journal of Hospitality Management, 25 (4) , 662 - 682 (2006) 14. Melnyk S., Stroufe R., and Calantone R., Assessing the impact of environmental management systems on corporate and environmental performance , Journal of Operations Management , 21(3) , 329 - 351 (2003) 15. Sila I. and Ebrahimpour M., Critical linkages among TQM factors and business results , International Journal of Operations and Production Management , (25) , 1123 1155 (2005) 16. Bou - Llusar J., Escrig - Tena A., Roca - Puig V. and Beltrán - Martín I., An empirical assessment of th e EFQM Excellence Model: evaluation as a TQM framework relative to the MBNQA Model , Journal of Operations Management , (27) , 1 22 (2009) 17. Heras - Saizarbitoria I., Molina - Azorín J. and Dick G., ISO 14001 certification and financial performance: selection - effec t versus treatment - effect, Journal of Cleaner Production , (19) , 1 12 (2011)