Measuring efficiency of the hotel and restaurant sector: the case of India

Abstract

Purpose -The purpose of this research is to provide exploratory insights on measurement of efficiency of the hotel and restaurant companies operating in India. Design/methodology/approach -This study will use a linear programming-based approach, data envelopment analysis (DEA), to evaluate the efficiency of hotel and restaurant companies operating in India. DEA is a method of evaluating the relative efficiency of decision-making units (DMUs). In this study the decision-making units are the hotel and restaurant companies. The study further explores if there exists a relationship between the efficiency and size of the hotel and restaurant companies. Findings -The DEA model used in this study assigns efficiency scores to each of the hotel and restaurant companies taken in the sample of 68 companies for the year 2004-2005. The study also explores whether there is a relationship between the efficiency and size of the hotel and restaurant companies.Practical implications -As this study evaluates the efficiency of the hotel and restaurant sector, it separates the most efficient hotel and restaurant companies from the non-efficient ones. The study identifies the top performers in this sector. Also, managers get important insights for their strategic and operational decisions to improve performance. Originality/value -There are very few known studies that have measured the efficiency of the hotel and restaurant companies. This study is one of the few exploratory initiatives in the Indian context.

Efficiency in the hotel industry: an empirical examination of the most influential factors

“…A possible argument for this could be that smaller hotels manage smaller levels of resources and it is easier for them to maximise their occupancy rate. Our research results are in contrast to the studies of Hwang and Chang (2003), Wang, Hung and Shang (2006) and Sanjeev (2007) where no difference has been found.…”

“…It is especially valuable, while in contrast to other research, it uses hotels internal results. This study also contributes to the ongoing debate concerning the difference in efficiency among hotels of different size (Assaf & Knežević, 2010;Davutyan, 2007;Hwang & Chang, 2003;Sanjeev, 2007;Wang, Hung & Shang, 2006).…”

“…Research in Crete has shown that nationally-branded hotels are most efficient, followed by local brand and independent hotels and internationally-branded hotels are the least efficient (Manasakis, Apostolakis, & Datseris, 2013). Sanjeev (2007) explored the relationship between the efficiency and size of hotels in India and found no clear link. Assaf and Knežević (2010) examined the effect of the hotels' business year, star rating and size and found that they are positively related.…”

Data Envelopment Analysis (DEA) for Measuring the Efficiency of the Hotel Industry in Ecuador

“…Another study on the hotel sector that the DEA applies to is that by Sanjeev [23], to evaluate the efficiency of hotel and restaurant companies operating in India. The results show 16 out of 68 hotel and restaurant companies are fully technically efficient, having obtained a score of 1 (or 100 percent).…”

An Analysis of the Operational and Management Efficiency of Five-Star Hotels in Taiwan

“…It was discovered that the number of rooms (scale) was one of the factors influencing service quality and operational efficiency. Sanjeev (2007) adopted financial indices to analyze the efficiency of 68 hotels in India and found that 18 of them were efficient; the average efficiency of the www.ccsenet.org/ijef International Journal of Economics and Finance Vol. 6, No.…”