Techno-Economic Evaluation of Sustainability Innovations in a Tourism SME: A Process-Tracing Study

Abstract

In response to growing pressures for sustainability in tourism, this paper examines the techno-economic evaluation of green innovations in small and medium-sized tourism enterprises (SMEs). Focusing on a single case study of a hotel in Greece, the research investigates how and why specific sustainability interventions were implemented and assesses their operational and economic impacts. The study adopts an interpretivist approach, combining process tracing with thematic analysis. The analysis is guided by innovation diffusion theory, supported by organizational learning perspectives, to explain the stepwise adoption of sustainability practices and the internal adaptation processes that enabled them. The techno-economic evaluation draws on quantitative indicators and qualitative assessments of perceived benefits and implementation challenges, offering a broader view of value beyond purely financial metrics. Data were collected through semi-structured interviews, on-site observations, and internal documentation. The findings reveal a gradual, non-linear path to innovation, shaped by adoption dynamics and organizational learning, reinforced by leadership commitment, contextual adaptation, supply chain decisions, and external incentives. Key interventions, including solar energy adoption, composting, and the formation of zero-waste partnerships, resulted in measurable reductions in energy use and landfill waste, along with improvements in guest satisfaction, operational efficiency, and local collaboration. Although it is subject to limitations typical of single-case designs, the study demonstrates how even modest sustainability efforts, when integrated into daily operations, can generate multiple types of outcomes (economic, environmental, and operational). The paper offers practical implications for tourism SMEs and policymakers and formulates propositions for future testing on sustainable innovation in the tourism sector.