Estimating efficiency and its determinants in the hotel sector using a profit function

Inefficiency in the hotel sector is normally estimated through cost and scale efficiencies. This paper estimates hotel profit efficiency and its determinants employing a stochastic frontier profit function and the inefficiency effects function. The key advantage of this methodology is its ability to estimate efficiency for each hotel and the factors that explain differences in efficiency in a single-stage sampling procedure. The sample consists of 231 hotels in Spain in the period 2008–2012. Empirical evidence shows that the average level of profit efficiency is 45.85% and that age, labour productivity and location are determinants of this efficiency. Policy implications for the improvement of less efficient hotels are noted.     

Efficiency and productivity growth in hotel industry

This paper analyses the relative efficiency and productivity of a representative sample of Portuguese hotels by using the directional distance function and the Luenberger productivity indicator. The key advantage of this approach is that both input contraction and output expansion are considered. The model generates hotel efficiency scores, ranking the hotels in the sample. We conclude that both inputs and outputs play a major role in hotel efficiency. Therefore, we suggest an alteration of management procedures in order to enable efficiency to be increased, based on an effective enhanced‐incentive policy and taking into account the small hotel characteristics of the sample. Copyright © 2008 John Wiley & Sons, Ltd.     

An environment-adjusted dynamic efficiency analysis of international tourist hotels in Taiwan

The paper is the first study to combine four-stage approach and dynamic data envelopment analysis (DEA) to investigate the efficiencies of 45 international tourist hotels in Taiwan during 2002–2011. Using the four-stage approach of Fried et al. [1999. Incorporating the operating environment into a nonparametric measure of technical efficiency. Journal of Productivity Analysis, 12(3), 249–267] and the dynamic DEA model by Tone and Tsutsui [2010. Dynamic DEA: A slacks-based measure approach. Omega, 38(3), 145–156], the study considers the effects of the external operating environments and carry-over activities between two consecutive terms, and calculates managerial efficiency of international tourism hotels in Taiwan. The empirical results show that dynamic DEA provides more stable pure managerial efficiencies than traditional DEA, reflecting the continuity of the links between terms. Then the study employs Tobit regression to estimate the effects of location, management style, and occupancy rate on input slacks. The location in resort area leads to less slacks of employee and room. The chain system helps reduce slacks in room and area of meal department. The slack of employee and room gets lower while occupancy rate gets higher. After controlling the three external environment variables, the efficiency scores of 28 hotels increase, 9 hotels fall, and other 8 hotels still sustain on the efficient frontier.     

How does demand uncertainty affect food and beverage capacity in the hotel industry?

This study investigates the effect of demand uncertainty on hotels’ food and beverage (F&B) capacity using the operation data of international tourist hotels in Taiwan. The empirical results of this study show that demand uncertainty leads to an increase in F&B capacity. Moreover, the magnitude of this effect increasingly strengthens for hotels with larger F&B scales. Our results together with other studies on room capacity collectively indicate that hotels’ overcapacity problem resulting from demand uncertainty considerably varies with hotel scales and between different hotel sectors.     

An integration of the multi-component DEA and GAR models to the measurement of hotel performance

The aim of this paper is to identify how well each hotel performs in each of its room and food and beverage divisions. To this end, this paper develops a multi-component data envelopment analysis/global assurance region (MDEA/GAR) model to fully gauge hotel performance where each hotel has its specific inputs and outputs for both divisions as well as shared inputs and common outputs between the two divisions. The application shows how the MDEA/GAR model can incorporate preferable hotels among the efficient ones with higher profit earning ratios when evaluating hotel performance. The results show that members of international chain-managed hotels perform significantly better than local chain-managed and independently managed hotels.     

The income elasticity gap and its implications for economic growth and tourism development: the Balearic vs the Canary Islands

ABSTRACT

The Balearic and the Canary Islands are two well-known tourism-led economies. They both experienced a tourism boom during the same decades, and, hence, they developed a similar productive-mix. Nevertheless, there are strong economic differences between the two regions. While the Balearic Islands enjoy a high GDP per capita, the Canary Islands show a more modest performance. The results of a panel data regression confirm our hypothesis that they differ substantially in terms of income elasticity of tourism. It is two times higher in the Balearic Islands than in the Canaries, which indicates the first is perceived as a more luxurious destination. Furthermore, the results of a dynamic computable general equilibrium model show that the Canaries would converge in GDP per capita with the Balearic Islands if they attracted tourists with a similar profile as the latter.     

The role of inter-island air transport in the Canary Islands

The Canary Islands depend almost completely on air transport for the inter-island distances usually exceeding 80–100 miles.¹ Apart from the transport of heavy cargo and that of low unit value by sea transport, the rest of the traffic tends to choose this means. What is more, tourism is developing in the main island and is highly dependent on air transport. The purpose of this paper is to analyse the quality of regular inter-island air transport in the Canary Islands, and how this is incorporated into the Trans-Insular Transport Axis as a social and economic integrating factor.     

Modelling roles of task‐technology fit and self‐efficacy in hotel employees' usage behaviours of hotel information systems

The purpose of this study was to examine the relationship between hotel information system (HIS) users' personal perceptions and beliefs of the given system and their daily routine usage intention via the technology acceptance model (TAM), considering the two external variables (motivational variables) of the model — ‘task‐technology fit’ (extrinsic motivation; system feature) and ‘self‐efficacy’ (intrinsic motivation; personal feature). Data were collected from hotel employees of 13 upscale hotels in Jeju, South Korea, and path analysis was utilised to test structural model and hypotheses. The results provided empirical support for an extended TAM, and verified its robustness in predicting hotel employees' intention to use a HIS. Copyright © 2010 John Wiley & Sons, Ltd.     

The economic return on education for hotel managers

This paper estimates econometrically the economic return on education among Portuguese hotels managers, based on a survey carried out in 2003. A Mincerian human capital model is estimated. The main findings indicate that the rate of return is in the range 12–15%, signifying that Portuguese hotel managers are better paid than the average population. The results also indicate that in this sector, the return on education does not depend on the number of employees in the hotels in which the individual works, nor on the region where the hotel is situated. Gender has an impact in this labour market. Being a foreign manager has a positive impact on earnings, as is also the case for partners in the hotel company. The research draws the attention of hotel managers to the need to acquire human capital to enable them to perform their tasks effectively in a globalised world. Copyright © 2007 John Wiley & Sons, Ltd.     

An analysis of demand uncertainty in the hotel market

This study proposes a two-step approach to investigate the impact of certain environmental variables on demand uncertainty within the hotel sector. Adopting a simultaneous-equation model and using the operation data of international tourist hotels in Taiwan, this study shows that chained hotels face less demand uncertainty than independent hotels. Additionally, hotels that are more distant from the airport or located in metropolitan areas face a significantly higher degree of demand uncertainty.     

Critical issues of globalisation in the international hotel industry

Competition in the international hotel industry is increasingly global as hotels seek new ways to grow and customers have more alternatives to choose from. Globalisation could lead to bland hotel images where hotels are similar wherever they are located. They could lose their local uniqueness and authenticity. This paper presents strategies for international hotel companies to operate in the globalised market. The main issues of globalisation in the international hotel industry are also discussed and ways to optimise the implementation of operating strategies given.     

Luxury hotels mushrooming and extravagant governments

This paper empirically examines the effect of nontax revenue on demands for luxury hotels in China where the strict public financial supervision is not well-established. Results indicate the nontax revenue significantly influences luxury hotel demands across the country and that government demands have crowding out effect on private demands for luxury hotels, all of which appear more salient in Chinese underdeveloped areas with more severely deficient public financial supervision.     

Monitoring hotel performance using occupancy time‐series analysis: the concept of occupancy performance space

Time series factor analysis is used to identify four temporal dimensions of occupancy performance in 279 English hotels over the period January 1992 to December 1994. These dimensions referred to as reference curves differentiate hotels on the basis of overall occupancy level (RC1), seasonality (RC2), long‐term trend (RC3) and length of season (RC4). The reference curves are used to define the dimensions of occupancy performance space in which the 279 hotels are positioned, with the hotels differentiated by hotel situation type. It is shown that the positioning of a hotel in occupancy performance space can provide a precise and effective basis for hotel marketing.     

Green hotel servicescape: attributes and unique experiences

ABSTRACT

The relationship between green hotel service attributes and consumption experiences remains unclear in the extant research, especially in the context of emerging economies such as India. This work uses a multi-method approach that combines in-depth interviews, word association and two-stage empirical validation to propose a three-dimensional framework for measuring a hotel’s green servicescape, composed of atmospherics, motifs and human encounters. Individual effects of each green servicescape sub-dimension on those of green experiential values, namely utilitarian, emotional, social and altruistic values, are examined. The results reveal interesting findings, some counterintuitive, which are expected to create new insights for academicians and practitioners alike.     

The performance of the Slovenian hotel industry: evaluation post‐privatisation

This study analyses the technical efficiency of Slovenian hotels using the data envelopment analysis method. Multiple inputs and outputs are included in the analysis, ranging over the period 2005–2007. The results reveal an increase in efficiency over the period analysed. The results also confirm that factors such as the hotel's year in business, star rating and size are positively related to efficiency variations between hotels. Copyright © 2010 John Wiley & Sons, Ltd.     

Post-2010 FIFA Soccer World Cup: oversupply and location of luxury hotel rooms in Cape Town

An excess of hotel rooms in cities preparing to host a mega-event such as the FIFA Soccer World Cup is not a new occurrence. Between 2007 and 2010 the number of five-star hotel rooms in Cape Town increased by 50% and four-star hotel rooms by 20%. A spatial database of three-, four- and five-star hotels was compiled for the hotel sector of Cape Town. This paper reveals the global–local nexus of luxury hotel development in Cape Town (South Africa) and three different contexts in which the oversupply of hotel rooms must be understood. First is South Africa as a developing country engaged in hosting a hallmark event and engrossed in concomitant inflated tourism-related expectations. Second is the vulnerability of Cape Town's hotel sector with its overdependence on long-haul holiday tourists from a narrow northern-hemisphere market experiencing the worst economic recession since the 1930s. Third is the favourable economic trends in South Africa from 1999 to 2007 that have trapped hotel developers in a ‘fallacy of composition’.     

Different Shades of Green: Environmental Management in Hotels in Accra

This paper assesses the environmental management practices of different categories of hotels in Accra, Ghana. Managers of 200 hotels were surveyed, employing the stratified random sampling method. Results of the study indicate significant differences in the extent of environmental management of the hotels suggesting that the better the quality of a hotel, the better the environmental management performance. Suggestions are made towards improvement in waste management and voluntary environmental programmes in small and medium hotels that did not perform well in those areas of environmental management Copyright © 2013 John Wiley & Sons, Ltd.     

The moderating effect of safety image on Guests' perceived risk and revisit intentions in luxury hotels

This study explores the relationship between perceived risk and intention to revisit, based on four core dimensions of the subjectively perceived risk of luxury hotel guests to hotel safety image. In particular, this study innovatively uses the four dimensions of hotel safety image as moderating variables to explore how the relationship between perceived risk and intention to revisit is affected. The results from the 573 valid questionnaires show that perceived risk has significant negative effects on revisit intention, hygiene control significantly and negatively moderates the negative relationship between perceived risk and revisit intention, and self-service technology significantly and positively moderates the negative relationship between perceived risk and revisit intention. These results complement the application of customer perceived risk and hotel safety image in luxury hotels in the context of natural disasters and provide hotel managers with new perspectives on marketing and decision making and how to improve competitiveness.     

Hotel performance and knowledge sources in Spanish tourism districts

The present paper brings together two of the research lines which have proved most relevant in the field of strategic management during the last few years: the importance of knowledge as a source of competitive advantage; and the ease of access to that resource within clusters and/or industrial districts. More specifically, our work focuses on the tourism sector, analysing the extent to which the profitability of Spanish vacation hotels located along the Mediterranean coastline depends on internal and external knowledge, that is, on the knowledge resources generated at each destination. A multiple linear regression is designed for the empirical analysis. The evidence supports the hypothesis that the external knowledge generated at each destination is statistically significant, even though internal knowledge turns out to be more relevant in terms of hotel profitability.     

Unionisation in the Dublin hotel industry

The Dublin hotel industry experiences significantly higher levels of union density than is the case amongst hotel workers in the UK. This paper examines the context in which these different experiences of union density take place. It provides an examination of the historical roots of union organisation within Dublin hotels and explores the factors that have contributed to effective organisation within the industry today. It concludes by arguing that although the structural characteristics of employment in the UK can act as a barrier to union organisation, these can, in certain historical periods, be overcome where there is a shifting balance of power between workers and employers affecting both the hotel industry and society as a whole. Copyright © 2003 John Wiley & Sons, Ltd.