Measuring DEA efficiency in international tourist hotels in Taipei

Abstract

Hotel companies are increasingly using their websites for online promotion and sales. Integrating the websites into business operation is critical for the survival of hotels. However, the efficiency performance of the hotel industry has mostly investigated financial efficiency, ignoring network marketing efficiency. This study evaluates the performance of 21 four-and five-plum international tourist hotels (ITH) in Taipei using data envelopment analysis (DEA) to combined financial data and web metrics. Two outputs (revenue and unique visitors) are taking into considered, since hotel companies have two primary objectives: to obtain revenues and to gain market share. In addition to overall efficiency, both revenue oriented efficiency and network marketing efficiency are investigated. The practical significance of this study is discussed.