Performance benchmarking for Taiwan's international tourist hotels

Abstract

This study proposes an alternative data envelopment analysis (DEA) method to explore the managerial performance, the input congestion, and the benchmarks of international tourist hotels (ITHs) for a small open economy, Taiwan. Several empirical results are shown: (1) most ITHs operate at decreasing returns to scale, indicating that ITHs are facing a highly competitive environment; (2) the international chain ITHs are generally more efficient than independent-owned ones; (3) ITHs located in resort areas operate slightly better on average than ones located in metropolitan areas; (4) ITHs that are close to CKS international airport operate slightly worse on average than ones far from CKS international airport; (5) congestion analysis reveals that inefficient ITHs lack the ability to integrate their resources, especially in the total area of the catering division and the number of guest rooms; and finally, (6) the reference-share measure shows that efficient international chain ITHs are able to more easily become benchmarks. The findings show that efficient international chain ITHs are more competitive and they should provide examples of operating practice.