A study of economies of scale and economies of scope in Taiwan international tourist hotels

This paper is to investigate economies of scale and economies of scope for the international tourist hotel industry in Taiwan. The research sample contains 50 international tourist hotels in Taiwan. Research data is from financial statements in the official annual report published by the Tourism Bureau, Ministry of Transportation and Communication, R.O.C., and the sample period is from 1993 to 1997. The empirical model contains the Translog cost function, which includes three output variables and four input factors, the cost‐share equations, and the constraints on the parameters in the simultaneous cost system. The seemingly unrelated regression (SUR) is used to estimate the parameters of the simultaneous cost system. The results show that, based on the 1997 data, international tourist hotels in Taiwan are in general not operating efficiently, in terms of cost efficiency. There are some cost incentives or benefits from expansion both in scale and scope of business.     

Do competitive strategy effects vary across hotel industry cycles?

We use metropolitan-level panel data of international tourist hotels (ITHs) in Taiwan to examine whether competitive pricing, quality and advertising effects differ across two business cycle phases of the Taiwanese hotel industry. Following Chen et al.’s (2014. Tourism Econ. 20 (3), 655) conclusion, the Taiwanese hotel industry over the period 2000 to 2010 is divided into two regimes: a high-growth regime (2007–2010) and a low-growth regime (2000–2002 and 2004–2006). We adopt the approach proposed by Enz et al. (2009. Cornell Hospitality Q. 50 (3), 325) on competitive strategies by computing the difference between the value of each hotel and its competitive set on merits of average daily rate, service quality and advertising expenditure. The empirical results indicate that: (1) Competitive pricing strategy has a positive influence on ITHs’ room revenue per available room (RevPar) in the high-growth regime (HGR). (2) Competitive pricing and service quality strategies are positively associated with RevPar in the low-growth regime (LGR). Moreover, service quality improvements relative to the competitive set lead to an increase in occupancy for ITHs in the LGR.     

A stochastic cost efficiency analysis of international tourist hotels in Taiwan

The one-stage stochastic frontier approach (SFA) is used in this study to simultaneously estimate cost efficiency scores and factors of cost inefficiency for 66 international tourist hotels in Taiwan during 1997–2006. An SFA model with three outputs and three inputs is defined. The three outputs are room revenue, food and beverage revenue, and other operation revenue while the three inputs are price of labor, price of other operation, and price of food and beverage. This model also takes into account five environmental variables, including dummy variable of the hotels located in non-metropolitan area, dummy variable of chain hotels, the number of tourist guides, the minimum distance from each hotel to Taoyuan international airport and the minimum distance from each hotel to Kaohsiung international airport. Empirical results show that international tourist hotels in Taiwan are on average operating at 91.15% cost efficiency. All nominal variables are transformed into real variables in 1997 prices by GDP deflators. Chain systems, tourist guides, and international transportation can significantly improve the cost efficiency of international tourist hotels in Taiwan.     

The influence of uncertain demand on hotel capacity

We examine the effects of uncertain demand on hotel capacity using the operation data of international tourist hotels in Taiwan from 1996 to 2008. Abel (1983) argued that demand uncertainty leads to an increase in the capacity of a firm if uncertain demand takes the form of output price uncertainty for the competitive market. We empirically test Abel's model. Our findings support the demand uncertainty hypothesis in Abel's model. Moreover, our results indicate that effective management of hotel capacities is a more important issue for managers of medium-sized hotels than for small or large-sized hotels in the Taiwanese hotel industry.     

Hospitality Industry Responses to Climate Change: A Benchmark Study of Taiwanese Tourist Hotels

Hotels are one of the tourism businesses most vulnerable to climate change because of their fixed assets. Results are presented of a baseline study that explores the awareness, attitudes, and behaviours of Taiwanese tourist hotels with respect to climate change and its potential impacts as well as their overall environmental practices. Tourist hotels are defined by the Taiwanese government as hotel establishments of over 80 rooms in rural areas and 50 rooms in city areas. Although the 104 tourist hotels represent only 3.7% of the total number of hotels in Taiwan, they account for over half of international guest nights and had a combined revenue of over TWD$43 billion in 2010. Questionnaires were distributed via email to all tourist hotels in Taiwan and 45 valid returns were received, representing an effective response rate of 43.3%. The results of research illustrate the level of understanding of climate change within Taiwanese tourist hotels and identify the specific climate change adaptation and mitigation strategies that tourist hotels have initiated. Access to such baseline data provides a potentially significant contribution to evaluating the response of the Taiwanese accommodation sector to environment change as well as providing a basis for further comparative studies and benchmarking.     

Does better service induce higher profitability? Evidence from Taiwanese Hospitality Industry

We adopt Wang et al. (2006) service quality measure to examine how the qualities of various hotel services affect hotel's profitability using panel data in the Taiwanese international tourist hotel sector. The empirical results indicate that there is a non-linear relationship between food and beverage service quality and hotel profitability, while the effect of room service quality on hotel profitability is not significant.     

How does hotel pricing influence guest satisfaction by the moderating influence of room occupancy?

Whether the product price increases customer satisfaction or rather decreases it has been actively debated for some time. A non-linear correlation between the hotel price and guest satisfaction, explored empirically in this paper, implies that the two phenomena are actually not inconsistent with one another At the low price level, room price and food and beverage (F&B) price leads to an increase in guest satisfaction whereas the high price level could have just the opposite effect The results suggests an inverse U shaped relationship between price level and guest satisfaction On the other hand, the room price guest satisfaction link could be affected by the moderating influence of room occupancy to be a U shaped function This paper reports results from a study on the influence of hotel pricing on guest satisfaction in the context of room products and F&B products in Taiwanese international tourist satisfaction It is found that the hotel pricing has a quadratic effect on guest satisfaction     

Cost Efficiency and the Choice of Operation Type: Evidence from Taiwan's International Tourist Hotels

This study investigated the endogenous relationship between the differences in cost efficiency and hotel owners' choices of either remaining an independently operated establishment or joining an international chain. We applied observations of 72 international tourist hotels in Taiwan from 1997 to 2008 to a simultaneous equations model with qualitative and limited dependent variables. The study results suggest that joining international chains significantly improves cost efficiency. We also found that net gains from improving both cost efficiency and hotel location are the two foremost determinants for an owner's decision to join an international hotel chain.     

Mainland Chinese Tourists to Hawaii: Their Characteristics and Preferences

Tourism is the most economically important industry to the United States' only island state, Hawaii. With Hawaii's highest spending and largest international tourist segment, Japanese, decreasing significantly (a loss from over 2,000,000 in 1997 to just over 1,000,000 Japanese visitors in 2009), Hawaii needs to prepare to replace the significant decrease of Japanese visitors with a new visitor market. The logical new international visitor target market would be tourists from the fastest growing economy in the world, that being China. The purpose of this study is to explore the differences in attitudinal and behavioral characteristics, and preferences of Chinese tourists in Hawaii according to key sociodemographic variables. The results of this study conclude that sociodemographic variables show significant differences in attitudinal and behavioral characteristics. For example, when comparing the number of times a respondent had visited Hawaii, first-time visitors showed the highest level of preference for a deluxe hotel while second-time visitors showed the highest level of preference for a budget hotel. Those who had visited Hawaii three or more times indicated the highest preference for a first class hotel and also to be more interested in high-end shopping. First-time visitors showed the highest percentage in the lowest category of estimated cost of gifts (US$0–US$300). This indicates that Hawaii tour operators should focus on introducing more discounted shopping to first-time visitors.

The results of this study are likely to be beneficial for understanding Chinese tourists and establishing marketing policies to enhance their satisfaction and raise their intention to revisit Hawaii. The findings of this study could be helpful for all stakeholders including local tour operators, the hotels, and Hawaii's tourism officials.     

Exploring the Factors Affecting Hotel Outsourcing in Taiwan

Two studies were conducted to examine factors affecting hotel outsourcing in Taiwan. In study 1, interviews with senior hotel managers were analyzed to explore the factors determining a hotel's outsourcing of different services. The results of the questionnaire survey used in study 2 indicated that the current and desired percentages of outsourcing for international tourist hotels in Taiwan were very low, indicating that strategic outsourcing has not received much attention in that part of the Taiwanese hospitality sector. The hotel departments that were most often outsourced were housekeeping, security, maintenance and information systems. Study 2 also showed outsourcing decisions were based only on a hotel's resources. The effect of predicting outsourcing was not significant for transaction costs. The results of this study provide both hotel management and outsourcing service providers with insights into hotel outsourcing in Taiwan.     

Scale and scope economies of international tourist hotels in Taiwan

Based on the survey data of Taiwan's international tourist hotels in 2000, this paper applies Zellner's seemingly unrelated regression technique to a simultaneous system of a translog multi-product cost function and its corresponding factor share equations to investigate the extents of scale and scope economies of Taiwan's international tourist hotels. The empirical results show that product-specific scale economies exist for accommodation, food and beverage, as well as other services. Ray scale economies are significantly present. Economies of scope exist in providing food and beverage and other services jointly, as well as accommodation and food and beverage services jointly. However, economies of scope may not be present when accommodation and other services are jointly provided.     

Privatization,market competition,international attractiveness,management tenure and hotel performance: Evidence from Slovenia

This paper tests several hypothesis related to the impact of privatization, market competition, management tenure and international attractiveness on the cost efficiency of tourist hotels. We measure efficiency using the innovative Bayesian frontier methodology. The data involve a sample of Slovenian hotels which operate in a highly dynamic environment. From the results, it is clear that hotel efficiency is positively related to privatization and international attractiveness, and negatively related to longer management tenure. No significant link, on the other hand, is found between market competition and hotel efficiency. Further discussions of these findings and related managerial implications are provided.     

A fuzzy multi-criteria decision model for international tourist hotels location selection

The main purpose of this paper is to present a fuzzy multi-criteria decision making (FMCDM) model for international tourist hotel location selection. In this article we created 21 criteria for selecting the international tourist hotel location acquired from literatures review and practical investigations. And the methods of fuzzy set theory, linguistic value, hierarchical structure analysis, and fuzzy analytic hierarchy process are used to consolidate decision-makers’ assessments about criteria weightings. Finally, an empirical study for identifying the international tourist hotel location selection in Taiwan is conducted to demonstrate the computational process and effectiveness of FMCDM proposed by this paper.     

Taking the Classroom into the Real World

Abstract

The increase in number of international tourist arrivals, the holding of the Olympic Games in Sydney in 2000, and a solid domestic tourism industry has had an effect on the meetings, incentive, convention, and exhibition (MICE) industry in Australia, worth A$7 billion in 1996/1997. To meet this increasing demand from the industry to train professionals for the tourism and hospitality industry, some institutions are offering specialized subjects to prepare students for employment in the MICE industry. One of the inherent problems in teaching such a subject is to introduce a practical and experiential element. This has been addressed successfully over the past two years by offering students an opportunity to take part as delegates attending a specifically designed conference while spending a night at one of the many 5-star international hotel properties with convention facilities on the Gold Coast. In 1999, 135 students stayed at an international 5-star hotel, with the hotel cooperating with the university to provide a full-day conference on conference management, including hotel inspections and workshops. Students were assessed on their experiences at the hotel with the completion of a semester report and a questionnaire on the perceptions of their stay. Almost three-fourths of the students surveyed responded that they had benefited from the visit by being able to apply theoretical concepts to real life scenarios and that this enhanced their individual understanding of the subject.     

An integrated approach for selecting corporate social responsibility programs and costs evaluation in the international tourist hotel

The purpose of this paper is to present an integrated approach and scientific techniques for corporate social responsibility (CSR) programs selection decisions and costs evaluation in the hotel industry. First, experts are chosen to conduct the analytic structure construction for CSR programs selection by identifying cost and differentiation advantage criteria and CSR program candidates that can benefit society and competitive advantage for hotels. Second, the DEMATEL (Decision Making Trial and Evaluation Laboratory) method is used to detect complex relationships and build a network structure among the cost and differentiation advantage criteria. Third, the ANP (Analytic Network Process) is used where the criteria are dependent. Fourth, the ANP results are applied to ZOGP (Zero–One Goal Programming) formulation to find the optimal CSR program portfolio under limited resources and constrained situations. Finally, ABC (Activity-Based Costing) model is used to calculate each chosen CSR program's costs in order to acquire accurate cost information. The result shows that the improvement on the image of an organization is the major dispatch for driving the international tourist hotel to fulfill CSR goals. The integrated approach can help international tourist hotels’ managers to select CSR programs more scientifically and to make decisions conforming to the reality.     

Preferences and Willingness to Pay for Green Hotel Attributes in Tourist Choice Behavior: The Case of Taiwan

Although many companies in the hotel industry aim to pursue more sustainable and socially responsible practices, the present literature shows mixed results with regard to tourist reactions to such moves, especially for the service quality perception impacted by implemented green practices and the willingness to pay more for such actions. Unlike previous research examining tourists’ preferences for separate green hotel attributes, this study identifies the determinants of tourists’ choice of green hotel attributes. Additionally, the study measures the willingness to pay (WTP) for such services, in the context of the Taiwanese market, using the stated preference of combined green hotel attribute scenarios. A multinomial logit (MNL) model is employed to estimate the relative influence of behavioral and facility attributes on choice behavior. Furthermore, the study examines determinants influencing respondents’ choice of green hotel attributes. A latent variable class model (LVCM) approach is applied in the estimation of the unobserved heterogeneity, and a total of 390 valid respondents were used in the analysis. The empirical MNL results indicate that while tourists prefer luxury rooms and the provision of personal toiletries, they are also willing to accept reduced service quality. Additionally, sex, income, and age have significant influences on tourist choice behavior. The results of the LVCM model demonstrate that respondents with high levels of the green consumption trait are more likely to choose hotels that have a greater number of environmentally friendly attributes. The implicit amount that tourists are willing to pay for room quality is around US$13, for the provision of personal toiletries is about US$22, and for service quality is US$12, but they also require a discount of approximately US$11 in order to accept the common practices of green hotels. This study is useful in providing the hotel industry and government with quantitative information that can be used to develop and implement better green hotel policies.     

Tourist motivation and place attachment: the mediating effects of service interactions with hotel employees

Using social facilitation theory, this study evaluates the mediating effects of service interactions with hotel employees on the relationship between tourist motivation and place attachment. The moderating effects of nationality and hotel star-rating on these relationships are also examined. The overall model tested on a sample of 545 international visitors to the island of Mauritius showed that service interactions mediated the relationship between tourist motivation and place attachment. Partial least squares-structural equation modeling (PLS-SEM) multi-group analysis found that the relationships among the constructs differed according to tourists’ nationality and the hotels’ star rating. The findings have important implications for hotel managers and destination marketing and management.     

The causality examination between demand uncertainty and hotel failure: A case study of international tourist hotels in Taiwan

The hotel business is highly sensitive to economic cycles, as the industry faces high frequency and high fluctuation of uncertainty over the demand for lodging services. Without a thorough consideration on the issue, hotels may undergo a business crisis. This research therefore investigates the influence of demand uncertainty on hotel failure by using the operation data of international tourist hotels in Taiwan during 1995–2008. The analysis applies two stages of estimation. The first stage employs a first-order autoregressive model, AR(1), to model lodging demand uncertainty. The second stage estimates the likelihood of hotels’ failure by using a logit model. The results are supportive to determine that the demand uncertainty causes hotel failures.