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

Abstract

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.

Using nonradial metafrontier data envelopment analysis to evaluate the metatechnology and metafactor ratios for the Taiwanese hotel industry

“…Huang, Mesak, et al (2012) used window DEA to measure the variation in aggregate efficiency over 6 years. Shieh et al (2017) and Wu et al (2013) employed dynamic DEA to assess hotel efficiency and defined hotel rooms to be the carryover variable linking various terms. Chen et al (2017) developed an intertemporal efficiency model to investigate technological progression and regression in the hotel industry.…”

Analyzing Destination Accessibility From the Perspective of Efficiency Among Tourism Origin Countries

“…To assess and rank efficiency in the tourism industry, DEA has generally been conducted under two scopes. The first focuses on micro-level perspectives by analyzing the efficiency of hotels, tour intermediaries, and air travel industries (Assaf, 2012; Calveras & Orfila, 2014; Chi, 2014; Shieh et al, 2017). The second scope focuses on macro-level perspectives by measuring the efficiency of the entire tourism industry.…”

Efficiency of Life Insurance Companies: An Empirical Study in Mainland China and Taiwan

“…The study of Shieh et al (2017) is the first study to integrate four-stage approach and dynamic DEA to assess the efficiencies of 45 Taiwanese international tourist hotels during 2002-2011.…”