<p>As a service industry, hotel carbon dioxide (CO₂) reduction requires customers’ participation. However, participation in carbon reduction usually involves several specific sacrifices (e.g., inconvenience, lesser quality, or less luxury). Customers may have negative experiences when hotels adopt green practices. Some hotels give up these practices to avoid profit loss risk owing to lower customer satisfaction, which diminishes the effectiveness of CO₂ reduction in the hospitality industry. This paper analytically investigates how to realize a win–win situation that simultaneously reduces CO₂ emissions and increases hotel profit with customer involvement in CO₂ reduction. It is found that seasonal demand, emission costs, CO₂ emission reduction quantity, tourist willingness to involvement, and savings of room operations cost, affect win–win situation realization. This paper also examines the effectiveness of carbon trading, subsidy to low-carbon rooms, increasing public CO₂ reduction awareness, and different hotel low-carbon measure combinations for a win–win situation. Further, insights obtained in this study provide references for hotels on strategy decisions on carbon reduction and for policymakers guiding hotels to achieve low-carbon transformation.</p>