Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/286495 
Year of Publication: 
2019
Citation: 
[Journal:] SERIEs - Journal of the Spanish Economic Association [ISSN:] 1869-4195 [Volume:] 10 [Issue:] 2 [Year:] 2019 [Pages:] 115-139
Publisher: 
Springer, Heidelberg
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.
Subjects: 
Bayesian inference
Efficiency
Heterogeneity
Revenue function
Stochastic frontier analysis
JEL: 
C11
C13
Z30
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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