Evaluating hotel productivity growth in Balearic and Canary islands

Abstract

This article examines the productivity of hotels operating in the two main sun and sand tourism markets in Spain, the Balearic, and the Canary Islands, from 2004 to 2013. In this manner, we can evaluate the impact of the global economic crisis on this sector. To tackle this issue, we apply alternative Malmquist productivity index decompositions to distinguish between different components of productivity. The results reveal that the economic downturn had major negative effects on hotel productivity for 2 years (2008 and 2009). After that period, hotels have increased their productivity levels driven by both technological and catching-up changes. This result provides new evidence supporting the fact that units operating in those destinations might avoid the process of decline predicted by Butler’s life cycle model.

Productivity in the Hotel Industry: An Order-α Malmquist Productivity Indicator

“…Following the relative literature of hotels’ efficiency and productivity measurements (Assaf & Agbola, 2014; Assaf & Barros, 2011; Assaf et al, 2011; Assaf & Josiassen, 2016; Cordero & Tzeremes, 2017; Tzeremes, 2019), we defined hotels’ production function having as inputs total employees and total fixed assets (measured in millions of euros). Moreover, our output is hotels’ total sales levels, which is also measured in millions of euros.…”

“…An essential part of the Malmquist productivity index (MPI) is the estimation of distance functions (DFs). The DEA approach for estimating DFs is very popular among scholars when measuring hotels’ efficiency and productivity levels (Brown & Ragsdale, 2002; Cordero & Tzeremes, 2017; Dolasinski et al, 2019; Goncalves, 2013; Walheer & Zhang, 2018). The studies by Hwang and Chang (2003) and Barros and Alves (2004) were the first to apply the DEA-based MPI in order to measure and decompose the productivity of different hotel sectors.…”

Do contextual factors matter? Evidence from Chinese hotel productivity with heterogeneity

“…This article considers also the possible scale effects in the productivity changes. Then, the decomposition suggested by Ray and Desli (1997) and recently applied for the first time in the hotel sector by Cordero and Tzeremes (2017) is adopted. The MPI can be rewritten as (Cooper et al, 2006: 215)…”

The Nature of Technological Change in the Chinese Hotel Sector

“…Cho and Wang (2017) adopted a cost metafrontier MPI model on Taiwan hotel industries and concluded that the international chain hotel is significantly superior to independent hotels. Cordero and Tzeremes (2017) applied the MPI approach to two main sun and sand tourism markets in Spain. They found that the economic downturn had major negative effects on hotel productivity in 2008 and 2009.…”