Determinants of technical efficiency in the Spanish hotel industry: regional and corporate performance factors

Abstract

Using a two-stage procedure, this paper examines the determinants of efficiency in the hospitality industry for a sample of 1385 Spanish hotel firms during the period 2001–2010. First, the efficiency scores of hotel firms are calculated using data envelopment analysis. The segmentation of the sample across all Spanish regions allows us to evaluate the efficiency of hotel firms, to observe their evolution across the period and to compare regional efficiency. Second, the paper introduces an alternative perspective to hotel efficiency. Using a Tobit regression model, the relationships between the efficiency score and the regional and corporate performance factors are tested. The evidence suggests that the hotel efficiency score is significantly influenced by regional and corporate factors, such as the tourist flow driven by each region, hotel location and hotel size.

Keywords:

• Spanish hotels
• corporate performance
• tourism decision-making
• regional factors
• efficiency indicator

Notes

1. Cross-sectional data refer to data collected by observing several units (firms, countries or regions) at the same point of time, or without regard to differences in time.

2. This survey is published by the Instituto Nacional de Estadística (INE –Spanish National Statistics Institute).

3. Because of the small number of observations located in Navarra and La Rioja and the similar characteristics presented in these two regions, the observations are grouped together. The same occurs with Cantabria and Asturias.