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.     

Cost structure and productivity growth of the Taiwanese international tourist hotels

This study investigates the cost structure and economic implications of the Taiwanese international tourist hotel industry. A multi-product translog cost function with three inputs and three outputs is estimated using seemingly unrelated regression estimation and three-stage least squares. A balanced panel dataset consisting of 47 international tourist hotels in Taiwan over the period 1997–2001 was obtained from Taiwanese Tourism Bureau and used to estimate the cost function. The results show that both scale and scope economies exist in the Taiwanese international tourist hotel industry. In addition, productivity growth is positive over the study period. Managerial and policy implications for the Taiwanese international tourist hotel industry are also discussed.     

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.     

Benchmarking the Asia Pacific tourism industry: A Bayesian combination of DEA and stochastic frontier

This study measures and compares the efficiency of leading tour operator and hotel companies across several Asia Pacific countries. We use an innovative methodology that is based on combining the stochastic frontier and data envelopment analysis in a Bayes framework. We show from the results that Australia, Singapore and South Korea are the most efficient in both their tour operator and hotel industries. We further show that international hotels in the region have a slightly higher efficiency than local hotels. We provide a listing of the most efficient tour operators and hotels in each country and discuss the implications of our findings.     

The Impact of Culture on Self-Service on Technology Adoption in the Hotel Industry

Abstract

Increasingly technology based solutions are being used to deliver customer service within the international hotel sector. Frequently, these are being driven by cost and operational efficiency concerns, rather than customer service concerns. The argument is presented in this paper that the undifferentiated use of these solutions across international hotel chains without consideration of the diversity of national cultures that may utilize these services may impact negatively on customer service and organizational performance. A number of propositions are suggested both for further academic research and as factors for consideration by hotel managers in this sector.     

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.     

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.     

Evaluating foreign market entry mode theories from a hotel industry perspective

This is a qualitative examination of the theories of new institutional economics (NIE) in the context of choosing between franchising and management contracts in the international hotel industry. In-depth semi-structured interviews were conducted with eight high-level hotel executives. The primary objective of this study is to empirically examine which of the predominant theories of NIE are the most appropriate for examining the specific choice between franchising and management contracts when internationalising a hotel or hotel chain. Transaction cost economics and the resource-based view emerged as the most appropriate theories, according to the executives interviewed. Moreover, several other important considerations were suggested by the respondents, including the size of the organisation, the importance of intangible assets and the level of investment into these assets. Finally, host country factors, such as legal and political risk, as well as the availability of capable local partners, were suggested as important considerations.     

The effects of Airbnb on hotel performance: Evidence from cities beyond the United States

Although Airbnb's impact on hotels has been quantified for major hotel markets in the United States, these effects have not been quantified in international hotel markets. Accordingly, the purpose of this study is to examine the effects of Airbnb listings on key hotel performance metrics in an international context. In particular, we examine the effects of Airbnb listings on hotel revenue per available room (RevPAR), average daily rate (ADR), and occupancy rate (OCC) in major international hotel markets, namely London, Paris, Sydney and Tokyo. The results show that Airbnb listings in these major cities have been increasing more than 100% year over year and that the effect of Airbnb on hotel RevPAR and OCC is negative and statistically significant. In particular, a 1% increase in Airbnb listings decreases hotel RevPAR by between 0.016% and 0.031% in these hotel markets. The implications of these findings for destinations and hoteliers are discussed.     

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.     

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.     

Accounting for customer satisfaction in measuring hotel efficiency: Evidence from the US hotel industry

Customer satisfaction, though an important output, is often ignored in hotel efficiency studies. Our study provides empirical evidence that excluding customer satisfaction may lead to significant difference in the mean and ranking of hotel efficiency scores. We derive our hotel efficiency scores using the distance stochastic frontier method based on a balanced sample of leading hotel chains in the US. We present and compare the efficiency results from two models, one that includes customer satisfaction and one that excludes customer satisfaction. The study discusses the difference in efficiency scores between the models. It also elaborates on the efficiency scores of some individual hotel chains and provides directions for future research.     

Determinants affecting comprehensive property-level hotel performance: The moderating role of hotel type

It is crucial for hotel managers to understand the main drivers of each property's financial performance. This study examines the key antecedents of both service-profit chain frameworks (customer and employee satisfaction) and strategic perspectives (size, customer mix) that influence a comprehensive hotel performance. The findings of this study show that customer satisfaction is a prominent driver of performance and that hotel size and customer mix also have significant effects on performance. This study also examines the moderating effects of hotel type on the following three determinants: customer satisfaction, hotel size, and customer mix and performance. The findings will offer useful insights to hotel chain firms and hotel investors who manage or own a portfolio of different hotel types.     

Measuring and Decomposing Efficiency in International Tourist Hotels in Taipei Using a Multidivision DEA Model

Traditional efficiency studies using data envelopment analysis (DEA) models considered all resource inputs as homogeneous, which appears to be unwarranted. In this article, we propose an output-oriented, multidivision DEA model considering the heterogeneity of different operating departments in a hotel when measuring its efficiency. Using the data of 21 international tourist hotels (ITHs) in Taipei during 2005–2007, we first measured each hotel's systematic efficiency by maximizing the performance of two different departments (i.e., rooms along with food and beverage) and then we decomposed the systematic efficiency by separately measuring the subsystematic efficiency of each department. Managers of the underperforming ITHs would find the model application and results of this study beneficial in helping them identify the operating department(s) that was causing the inefficiency for the hotel during 2005–2007. As a result, strategies and efforts for tackling the inefficiency could then be proposed by the managers in a more desirable direction. Implications are discussed.     

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.     

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.     

Measuring Personal Service Quality

Abstract

This study examined the personal service quality of international tourism hotels in China by measuring international hotel customer's satisfaction level and their perceived importance evaluation of personal service attributes. Six international hotels in Beijing and three departments (reception, food and beverage, and housekeeping) in each hotel were selected in this study. Responses from 472 customers were used for the data analysis of this study. It was found that customers identified friendliness and willingness to provide service in all three departments as service attributes with which they were very satisfied. Foreign language ability was identified as the least satisfactory in the reception and food and beverage departments. Customers also regarded friendliness and willingness to provide service as very important.     

Types of agglomeration effects and location choices of international hotels in an emerging market

When international chain hotels are seeking new locations in which to establish new properties, local knowledge of those locations is essential for success. By incorporating agglomeration and internationalization research, this study investigates how international hotels can acquire that local knowledge from the existing hotels. The study presents two different kinds of hotel agglomerations (same-country-of-origin and higher-differentiation agglomerations) as sources of local knowledge and shows how international hotels might select their locations based on types of agglomerations and their entry strategies. The study employs conditional logistic regression, using a sample of international hotels in China. Results indicate that international hotels, especially those with franchising, are more likely to choose a location where the hotels from the same country of origin are highly located. Because they share the same culture and business practices, new hotel entrants may more easily assimilate the local knowledge that compatriot hotels have accumulated.     

The determinants of hotels' marketing managers' green marketing behaviour

Little is known about the factors underlying the pro-environmental behaviour of marketing managers. This paper explores the determinants of green marketing practices in the Red Sea hotel sector in Egypt. The research model assesses green marketing practices against the personal and organisational values of the marketing managers, together with a range of organisational and demographic variables expected to influence hotels' environmental behaviour. From a valid sample of 89 marketing managers responsible for 194 hotels, it was found that organisational contextual variables, and in particular targeting Western tourists, being affiliated to an international hotel chain and the marketers' own demographics, including age, academic subject studied and gender, were the best predictors of more proactive green marketing. Personal environmental values did not explain the pro-environmental behaviour of marketers, and the organisational environmental values that had explained part of their ethical behaviour had resulted from voluntarism rather than utilitarian or conformance-based values. Government policies also appeared to be ineffective determinants. The implications for green marketing practices are also discussed.     

The Importance of Hotel Attributes in Contributing to Travelers' Satisfaction in the Hong Kong Hotel Industry

Abstract

This study surveyed 402 international travelers to explore their satisfaction levels towards service and facility quality in three Hong Kong hotel market segments, High-Tariff A, High-Tariff B and Medium Tariff. Six perception dimensions were extracted from 33 hotel attributes by a factor analysis. All six dimensions had a significant impact on the overall satisfaction of travelers with service quality and facilities in the three Hong Kong hotel market segments. Quality of Staff Performance was the most influential factor followed by Quality of Room Facilities, Value for Money, Variety and Efficient Services, Business Related Services, and Safety and Security respectively. It was found that travelers had the lowest satisfaction level towards the Medium-Tariff hotel segment. By identifying the most influential hotel dimension in influencing travelers' satisfaction levels, hoteliers will be in an advantageous position to formulate tactics to meet the changing needs and expectations of travelers. Implementing human resources training that emphasizes the fact that service quality is part of each employee's job should have a significant impact on guest re-purchase intention. The importance of value segmentation cannot be overlooked by hoteliers. Travelers will continue to expect hotels to provide more value-for-money services and facilities and they are expected to shift their purchasing decision to an economic value basis.