Research Note: Size, Efficiency and Productivity in the Spanish Hotel Industry — Independent Properties versus Chain-Affiliated Hotels

Abstract

This study analyses the size, efficiency and productivity of a representative sample of Spanish hotels. Using Data Envelopment Analysis, three different return-to-scale models are estimated. The number of full-time employees (FTEs), the staff cost and the number of rooms (inputs) and the total operating revenue (output) are used to estimate the levels of efficiency and productivity. The results show that independent properties must be more competitive if they are to survive in the medium and long terms. Three elements are essential to achieve greater competitiveness: (i) a higher level of differentiation; (ii) application of the results of technological innovation in the production process; and (iii) a more intensive level of cooperation.

Cost efficiency and its determinants in the hotel industry

“…The maximum efficiency of the hotels in the sample is 97.47% and the lowest is 38.47%, with about the same percentage of hotels operating above average efficiency as below it. In the case of Spain, this average level of efficiency is lower than that found by Alberca-Oliver ( 2014), but very similar to those found by Devesa and Peñalver (2013) and Jorge and Suarez (2014). It is, however, higher than the results of Parte-Esteban and Alberca-Oliver (2015).…”

“…Specifically for the hotel industry in Spain in recent years, Fernandez and Becerra (2013) used a DEA model to estimate the operational efficiency of 166 hotels between 2000 and 2009. Devesa and Peñalver (2013) also used a DEA model to estimate the efficiency of 424 hotels technique between 2004 and 2006 and found an average level of efficiency of 62.61%. In addition, Alberca-Oliver (2014) used a DEA model to estimate the efficiency of 303 hotels between 2000 and 2005, finding average levels of efficiency between 75.4% and 77.5%.…”

A two-stage DEA approach to analyse the efficiency of the hospitality sector

“…These findings provide economic agents with a more robust indication on the need to support more sustainable public policies. As highlighted in Such Devesa and Mendieta Peñalver (2013), an effort needs to be made in supplying a higher level of differentiation in the product to reach a higher level of competitiveness. In Sardinia, this aim can be pursued by encouraging alternative segments of tourism such as business, cultural, sport and ecotourism that can reduce seasonality and enhance an overall higher level of efficiency.…”

“…This outcome may be due to the complexity of the management and scale diseconomies in the production process. Such Devesa and Mendieta Peñalver (2013), for the case of Spain, find that the hotels managed by chains reached, on average, a higher level of technical efficiency of 68.61% compared with 60.84% of independently managed hotels. Moreover, the authors find that the sample of hotels with a greater scale (more than 81 rooms) and five-star hotels, regardless of their form of management, are characterized by a higher average level of technical efficiency.…”

Firm-level intra-industry links in Croatia’s tourism industry

“…Rufin (2007) argue that it might be that the hotels which are not integrated into large chains belong to a specific market segment essential to the tourist destination where they are located. In addition, the growing market share of hotel chains within the hotel sector in Spain advocate that a specific location and product differentiation alone are not enough for hotels to compete (Devesa et al, 2013). Having that in mind, the hotel industry in Croatia grew both in activity and productivity over the last ten years.…”