Are U.S. airlines really in crisis?

This study reflects on the technical efficiency of U.S. airlines using a Bayesian random stochastic frontier model. Inferences from the Bayesian estimation indicate that the random model fits the data well and outperforms the traditional stochastic frontier model. The technical efficiency results indicate that U.S. airlines are operating at a declining efficiency rate with an average of 69.02% in 2007. Results from returns to scale are also in line with the efficiency results. More specific discussions on the current industry trends and other contributions of this study are presented and discussed.     

低碳旅游服务提供效率评价研究——以张家界景区环保交通为例

文章基于投入产出分析,构建低碳旅游服务提供效率评价的数据包络法(DEA)和随机前沿函数法(SFA)。DEA优势在于不需要估计函数形式,但趋向于高估经营管理的无效率水平。SFA将低碳旅游组织低效率区分为干扰项无效率和纯管理无效率,通过测算其随机前沿生产成本函数来测算其低碳旅游服务的提供效率。文章以张家界市景区环保交通低碳旅游服务为研究对象进行实证分析显示:环保交通低碳旅游服务提供效率较低、存在较为严重的季节波动性,但呈现出递增的变化规律;旅游总人次、人力资本投资、固定资产投资对低碳旅游服务提供效率产生正向影响,而劳动者数量、燃料消耗对其产生负面影响。该研究为提供低碳旅游服务的旅游企业经营决策与公共政策制定提供了理论与实证依据。     

The cost efficiency of Australian airports post privatisation: A Bayesian methodology

This paper reports on the cost efficiency of Australian airports using a Bayesian panel stochastic frontier model. With data from 2002 to 2007, the paper focuses mainly on the post privatisation period of Australian airports. The results show that the cost efficiency of Australian airports has increased over time to reach a high value of 90.08% in 2007. The paper discusses the potential impact of factors such as privatisation, price cap regulations and capital investments on the current efficiency level of Australian airports.     

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.     

Higher tourism specialization,better hotel industry efficiency?

This study examines the effects of both specialization in tourism and market competition on the efficiency of the hotel industry. For this purpose, stochastic frontier analysis (SFA) was employed to evaluate the efficiency of the hotel industry on a provincial level in China and to analyze how it is impacted by specialization in tourism and market competition. The results confirm that tourism specialization and market competition exert a synergistic effect on hotel industry efficiency in China. This study finds that tourism development as represented by a high level of tourism specialization by a destination does not guarantee high efficiency in hotels but does enhance the negative effect of market competition on hotel industry efficiency. Significant policy and managerial implications stem from these findings.     

Impact of quality on estimations of hotel efficiency

This paper provides empirical evidence on the impact of output quality on hotel efficiency. It demonstrates how ignoring quality can lead to erroneous efficiency estimates. The study uses stochastic frontier methodology and the model proposed by Battese and Coelli (1995) to estimate the efficiency of 838 hotels in Spain in the period 2009–2013. The key advantage of this methodology is its ability to estimate efficiency and identify factors that explain differences in efficiency in a single-stage sampling procedure. Estimates of cost efficiency, which only include the costs of higher quality, are compared to those of profit efficiency, which not only consider costs but also the revenues generated by higher quality. Results show that quality has a negative impact on cost efficiency and a positive one on profit efficiency. Thus, hotel management should implement strategies that increase the value of their services as a way to achieve sustainable competitive advantages.     

Short-run and long-run performance of international tourism: Evidence from Bayesian dynamic models

Measuring the technical efficiency of the tourism industry is essential for evaluating tourism sustainability and reshaping tourism activities. This paper introduces for the first time a new dynamic stochastic frontier model to 1-measure and compare the short-run and long-run technical efficiencies of leading tourism destinations, and 2-provide impulse response functions and persistence measures to trace out the dynamic effect of shocks in technical inefficiency. We develop our model in a Bayesian framework using carefully constructed Markov Chain Monte Carlo (MCMC) techniques. We report efficiency results and persistence scores for individual destinations and discuss how different destinations recover from shocks in tourism performance.     

Tourism indicators and airports' technical efficiency

The Spanish airports are managed centrally by a government-owned company (AENA). The public investments made in the latest years, airports managers' inability to decide commercial policies and the lack of competition end with more than one under-used airport within an amenity distance. Airports' managerial decisions require considering regional needs. In the first stage, a stochastic frontier analysis is used to estimate airports' technical inefficiency with the inclusion of fixed effects. Tourism indicators related to the location of airports are used in a second stage regression. The results show that airports' geographical location affects efficiency in touristic areas. The type of accommodation becomes a driver of airports' efficiency with positive and negative impact. In non-touristic areas, touristic factors are not relevant.     

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.     

Cost efficiency modeling in health care foodservice operations

Cost efficiency and cost data in the health care foodservice sector have many interesting features. Traditional productivity approaches and empirical studies are yet to address many of these features, as they are limited to partial ratios and restricted parametric techniques. In this paper, we introduce and demonstrate the Stochastic Frontier Approach to this sector, and analyze the level of cost efficiency and its determinants. The approach is tested in a cross-sectional data set from a sample of 101 health care foodservice operations in Australia and the USA. Results indicate that the average level of cost efficiency is around 76.5% which suggests that health care foodservice operations could reduce their input costs by as much as 23.5% without decreasing their total output. Further, the coefficients of the inefficiency component, estimated simultaneously with the stochastic frontier model, indicate that both the level of manager's experience and the level of manager's education are significant determinants of cost efficiency.     

The effects of property and landowner characteristics on profit efficiency in salmon angling tourism in Norway

This paper analyzes how different property and landowner characteristics and other factors affect landowners’ profit efficiency from salmon angling tourism. The paper helps correct a lack of studies on the economic aspects of the triple bottom line approach to sustainability and suggests new areas of rural tourism research. A stochastic profit frontier function with an inefficiency module was estimated based on survey responses from 203 landowners along four Mid-Norway rivers. Profit efficiency decreased as the revenues from off-property and on-property activities increased relative to angling tourism. Factors increasing efficiency were long-term renting of fishing instead of permit sale or selling fishing packages with additional services and common property ownership instead of simple fee ownership. Cooperation, by merging several fishing rights into one unit rather than fishing on a single property basis, decreased efficiency. This study did not distinguish between different forms of cooperation; mandatory cooperation in the form of common property and voluntary cooperation between private properties are issues for further research. If sustainable economic efficiency is a public goal, policies should ensure a predictable economic environment for landowners specializing in salmon angling tourism and promote long-term renting, with a 10-year minimum period for the lease of fishing rights.     

A Bayesian non-parametric stochastic frontier model

In this paper, we introduce a new Bayesian non-parametric stochastic frontier (SF) model that addresses the endogeneity problem and relaxes problematic assumptions regarding functional form, and distributional properties. The model can be seen as a competitor to DEA. We show how the model outperforms its parametric counterpart in all critical diagnostic tests. The application we use covers a unique sample of US hotels that operate within competitive clusters. We utilize the efficiency results obtained from this model to shed light on the extent to which performance spillover (i.e. agglomeration effects) may differ based on the varied characteristics of hotels within these clusters. We obtain interesting findings and discuss their implications for hotels contemplating future co-location strategies.     

Product diversification and property performance in the urban lodging market: The relationship and its moderators

In this study, we investigate the relationship between product diversification and hotel property performance as well as the moderators of this relationship in the urban lodging market. Using stochastic frontier analysis with panel data, we calibrate the efficiency scores of 377 urban hotels in Beijing from 1994 to 2005. We then investigate the impact of product diversification on performance as measured by efficiency score. Results from panel data models indicate that the degree of product diversification exhibits a positive relationship with hotel performance. Hotel location, diversification expansion rate, and foreign ownership/operation are found to be significant moderating factors determining the effect of product diversification. Specifically, hotels that (a) are located farther from the city center, (b) expand diversification more slowly, and (c) are domestically owned are more likely to leverage the benefits stemming from product diversification. We provide a series of practical evaluation modules to help hoteliers improve performance.     

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.     

European vs. U.S. airlines: Performance comparison in a dynamic market

This study measures and compares the efficiency and productivity of European and U.S. airlines, over the period from 2001 to 2008. We measure efficiency by estimating a Bayesian distance frontier model subject to regularity constraints. Productivity estimates are also derived parametrically, based on the estimates of the distance frontier model. We estimate both a constrained (i.e. subject to regularity conditions) and an unconstrained model and we show the importance of imposing the monotonicity and curvature conditions on the distance function. The efficiency and productivity results based on the constrained model indicate that European airlines have slightly higher efficiency and productivity growth than U.S. airlines. A comparison based on the type of airlines indicates that low-cost airlines are on average more productive and efficient than full-service airlines. The decomposition of productivity growth and related market discussions are also provided.     

Does advertising spending improve sales performance?

Hotel managers and investors commonly analyze the impact of advertising spending on firm performance. This paper investigates such an impact using a comprehensive framework incorporating the moderating effects of hotel size and star ratings. We estimated sales performance via dynamic, stochastic frontier modelling. Using longitudinal data from a sample of Slovenian and Croatian hotels, we demonstrate that advertising spending has a positive impact on hotel sales performance, and that the relationship strengthens for larger hotels and hotels with higher star ratings. Theoretical and managerial implications along with directions for future research 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.     

Dynamic quantile stochastic frontier models

This paper introduces the concept of dynamic quantile regression to the context of stochastic frontier models. We develop a Dynamic Quantile Stochastic Frontier (DQSF) in a Bayesian framework to take into account possible shifts of production (i.e. outputs) over time. Not only does the model provide inefficiency measures by various quantiles but also controls for endogeneity and treats the quantile as a parameter and derives its marginal posterior distribution. The model also adopts a more general process for the time-varying parameters of the DQSF, where heterogeneity and dynamics are conveniently modeled using a panel vector autoregressive model. We test the model on a sample of US hotels.     

A review of research into performance modeling in tourism research - Launching the Annals of Tourism Research curated collection on performance modeling in tourism research

This paper presents a review of performance modeling in tourism research, with special focus on frontier models. We discuss the current status of the literature, identify the gaps, and highlight directions for future improvements across both parametric and non-parametric methodologies. More specifically, we elaborate on key methodological issues including endogeneity, bad outputs, dynamic formulations, heterogeneity, Bayesian estimation, bootstrapping, and stochastic DEA. For each of these areas we discuss and introduce some recent methodological breakthroughs that have been largely ignored in the tourism literature.This article launches a Curated Collection on performance modeling in tourism research, containing all articles published in Annals on the topic.     

A round trip on decentralization in the tourism sector

Although the performance of the tourism sector has been investigated extensively, the effects of institutional governance have largely been unexplored. This study uses a quasi-natural experiment setting owing to differences in tourism policy devolution between special and ordinary statute Italian regions. Using panel data for the period 1995–2010, we first assess the efficiency of each region by a smoothed bootstrapped Data Envelopment Analysis (DEA) and an order-m frontier estimator. Next, we adopt a difference-in-difference strategy and a fully non-parametric approach to assess whether decentralization affects the performance of regions as tourism destinations. We find that regions affected by decentralization worsened their performance, compared to unaffected regions. The results are robust to different estimators and empirical specifications.