Ciência-IUL
Publications
Publication Detailed Description
Journal Title
SERIEs- Journal of the Spanish Economic Association
Year (definitive publication)
2019
Language
English
Country
Germany
More Information
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Abstract
The tourism industry, in particular the hotel sector, is a highly competitive market. In this context, it is important that an hotel chain operates efficiently if it wants to improve or maintain its market position. The objective of this work is to compare the relative efficiency of hotel chains operating in Spain. To do this, we have designed a stochastic frontier model to measure revenue efficiency as a function of various different inputs such as total staff or number of rooms. Given that chains vary considerably in size, both inputs and outputs are normalized by an appropriate size measure. In contrast to most previous work, we account for heterogeneity in hotel chains by introducing relevant variables, such as the proportion of hotels in the chain with three stars or fewer, into the efficiency term of the stochastic frontier model. Our results suggest that in the Spanish case, in the period of the economic crisis, hotel chains increase overall revenue by investing in fewer, big hotels rather than more, small hotels. Furthermore, in terms of revenue efficiency, it appears better for hotel chains to invest in hotels of three or fewer stars than in higher star rated hotels. Finally, there is no clear evidence of a relationship between the size of a hotel chain and its efficiency.
Acknowledgements
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Keywords
Bayesian inference,Efficiency,Heterogeneity,Revenue function,Stochastic frontier analysis,C11,C13,Z30
Fields of Science and Technology Classification
- Economics and Business - Social Sciences
Funding Records
Funding Reference | Funding Entity |
---|---|
ECO2015-66593-P | Spanish Ministry of Economy and Competitiveness |
UID/GES/00315/2013 | Fundação para a Ciência e a Tecnologia |
ECO2015-65701-P | Spanish Ministry of Economy and Competitiveness |
ECO2015-70331-C2-2-R | Spanish Ministry of Economy and Competitiveness |