Dynamic efficiency assessment of the Chinese hotel industry

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Abstract

The paper introduces for the first time a totally dynamic two-stage approach to analyzing the hotel industry's technical efficiency at the sub-national level. The first stage uses data envelopment window analysis (DEWA) to assess regional hotel sectors' technical efficiency over time. Unlike previous studies, the second stage uses a dynamic Tobit model to investigate the impact of macro contextual factors on the hotel sector efficiency. The study chooses the Chinese hotel industry during the period 2001-2006 as its application setting. The findings of the investigation indicate that the Chinese hotel industry is approaching an efficient operation in general, recovering from a major dip in 2003 resulting from the Severe Acute Respiratory Syndrome (SARS) outbreak. In addition, the study introduces a novel two-dimensional efficiency-based matrix to assess the competitive advantage of different regions of the Chinese hotel sector. The paper presents strategic market implications for hoteliers, government decision-makers, and destination management organizations. The proposed methods are applicable for situations in which an exogenous event of a destabilizing impact (e.g., SARS) does occur. © 2011 Elsevier Inc.

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APA

Huang, Y., Mesak, H. I., Hsu, M. K., & Qu, H. (2012). Dynamic efficiency assessment of the Chinese hotel industry. Journal of Business Research, 65(1), 59–67. https://doi.org/10.1016/j.jbusres.2011.07.015

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