The use of data envelopment analysis to monitor hotel productivity

Abstract

Data envelopment analysis (DEA) was used to monitor and benchmark productivity in a chain of 15 hotels over a 12-month period. Quarter results were compared with each other and with standard accounting data for the same period. In this way it was possible to identify and study units which showed anomalous behavour in terms of their measured productivity and gross profit. These were apparently related to factors other than size or staffing levels. Advantages and disadvantages of DEA are discussed, as well as its potential for the motivation and appraisal of local management and for optimizing budgetary control.

Using Data Envelopment Analysis for Measuring and Benchmarking Productivity in the Hotel Sector

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The information and communication technologies productivity impact on the UK hotel sector

“…By correlating the DEA scores obtained in step 1 with the disaggregated productivity inputs/outputs/factors, significant positive correlations between DEA scores and ARR (p ¼ 0:601; a ¼ 0:0000), number of roomnights (p ¼ 0:495; a ¼ 0:0004) and non-roomnights revenue (p ¼ 0:562; a ¼ 0:0000) revealed that the latter can significantly enhance productivity. This is compatible with previous findings (Johns et al, 1997). Thus, in step 2, these three productivity-determinant disaggregated outputs were used instead of the non-F&B total revenue.…”

Efficiency and Seasonality in the Balearic Hospitality Industry

“…All this is suited to circumstances in which the technology that relates the inputs and outputs of the production process is neither known nor observable, as is the case of the lodging industry. In this respect, most empirical efficiency analyses of the hotel sector have opted for DEA techniques as the assessment method (Morey and Dittman, 1995;Johns et al, 1997;Anderson et al, 2000;Avkiran, 2002;Brown and Ragsdale, 2002;Hwang and Chang, 2003;Barros and Alves, 2004;Chiang et al, 2004;Parra et al, 2004;Sigala et al, 2005;Barros, 2005;Wang et al, 2006). Among the major studies reviewed, Annex 1 summarizes those that address the preparation of the sample in order to ensure maximum homogeneity of the units, as well as the design of a specific questionnaire aimed to determine the most relevant outpus and inputs.…”