Evaluating operating and profitability efficiencies of hotel companies

Abstract

The study of supply side of the hotel sector is rare although hotels play an important role in generating revenues in tourism industry, which has a large contribution on global economic growth. This study fills the supply-side literature gap through discussing the operating and profitability efficiencies of US listed hotel companies in the recent five years through a data envelopment analysis (DEA) approach. Hotels are categorised into four groups according to the stability and trend of their operating and profitability efficiencies in this five-year period. Findings suggest that hotels' operating efficiency and profitability efficiency are highly correlated. Implications for improving hotels' operating and profitability efficiencies are provided.