Sustainable development is a necessary part of hotel industry and precise efficiency measurement is required to have it, particularly in today's competitive environment. In this paper a method of efficiency evaluation and comparison is introduced which can categorize hotels with respect to their stars rating as well as size, place, budget and many other differences and protects the poor hotels from being compared with large hotels, international hotels and branded hotels. The outcome of the research can help the hospitality researchers to be able to compare (evaluate the efficiency of) hotels from different levels and categories.

As delivering consistent quality service is important in preserving customer's satisfaction, service failures are unavoidable in hospitality industry because of human frailties. Service failures can be dire to service providers as it may lead to customer complaints, bad word-of-mouth, reduces of customer's loyalty and erodes of firm's reputation. In this paper, the aim is to develop a Service Recovery Compensation Model based on integer programming to determine optimal recovery solutions for each tier of consumers. At the end an example is provided to show that a lower cost can be achieved using this model in a hotel while keeping the level of customer satisfaction.

No abstract