Efficiency in the hotel industry: an empirical examination of the most influential factors

Figures & data

Table 1. Overview of variables used in research of the hotel industry.

Author	INPUT	OUTPUT
Johns, Howcroft, and Drake (1997)	Room nights available, labour hours, Food and beverage (F&B) costs, utilities cost	Room nights sold, covers served, beverage revenue
Hwang and Chang (2003)	Full-time employees, guest rooms, area of meal department, operating expenses	Room revenue, F&B revenue, other revenues
Chiang, Tsai, and Wang (2004)	Hotel rooms, F&B area, employees, total cost of the hotel	Yielding index, F&B revenue, miscellaneous revenue
Barros (2005)	Full time workers, cost of labour, rooms, surface area of the hotel, book value of property, operational costs, external costs	Sales, number of guests, nights spent
Barros and Santos (2006)	Labour, full-time-equivalent employees, capital	Sales, added value, earnings
	Electricity consumption, water consumption, liquefied petroleum gas, employees	Occupancy rate, revenue, number of guests
Önüt and Soner (2006)	Employees, electricity consumption, water consumption, liquefied petroleum gas consumption	Occupancy rate, revenue, number of guests
Chen (2007)	Price of labour, price of F&B, price of materials	Total revenue of hotel
Davutyan (2007)	No. of available beds, employees, operating expenses	Beds sold to return customers divided by number. of available beds, beds sold
Perez-Rodrıguez and Acosta-Gonzalez (2007)	Price of labour, price of capital, financial costs	Total annual revenue
Min et al. (2008)	Cost of sales, payroll and labour related expenses, other operating and non-operating expenses	Revenue from rooms, revenue from F&B, revenue from other services
	Rooms expenses, F&B expenses, expenses from other services	Revenue from rooms, revenue from F&B, revenue from other services
	Cost of sales, payroll and labour-related expenses, other operating and non-operating expenses	Occupancy ratio, profit margin
	Rooms expenses, F&B expenses, expenses from other services	Occupancy ratio, profit margin
Barros et al. (2009)	No. of employees, physical capital	Sales, added value
Neves and Lourenco (2009)	Current assets, net fixed assets, shareholders’ equity, cost of goods and services	Revenues and earnings (EBITDA)
Perrigot et al. (2009)	Age of the hotel chain in years, labour, Number of rooms in the chain, expansion costs: Number of hotel openings during the year, franchising contract: royalties in percentage, chain ranking	Room revenues: occupancy rate in percentage, other revenues, total sales
Yu and Lee (2009)	Full-time employees in the room service department, full-time employees in the F&B department, number of rooms, floor area in the F&B service department; expenses for each service sector, shared input	Rooms revenue, F&B revenue, other revenue
Chen, Hu, and Liao (2010)	No. of guest rooms; employees; floor space of catering division	F&B revenues; rooms revenues; other revenues
Hsieh and Lin (2010)	Accommodation costs, number of employees of the accommodation department, catering cost, employees of the catering department, rooms, catering floors	Accommodation revenue, catering revenue
Hsieh et al. (2010)	No. of rooms, number of employees, facilities expenses, management expenses	Occupied room rate, total revenue
Assaf and Magnini (2011)	No. of outlets, full time equivalent employees, other operational costs	Total revenues, occupancy rate
Avkiran (2011)	Full-time staff, permanent part-time staff, bed capacity	Revenue and cost of a double room
Chen (2011)	Employees, surface area of floors, guest rooms, operating expenses, depreciation expenses	No. of guests, occupancy rate, guest satisfaction index,room revenue, other revenue
Shahroudi and Dery (2011)	No. of rooms, full-time employees, area of hotel	No. of guests, number of rooms occupied
Yen and Othman (2011)	Room nights available, number of employees, book value of the property, total operating expenses, non-operating expenses, F&B costs	No. of room nights occupied, number of guests; average occupancy rate, operating revenues, other revenues, F&B revenues
Honma and Hu (2012)	No. of employees, number of temporary staff, number of seats in restaurants and bars, number of rooms	Real revenue
Ashrafi et al. (2013)	Standard average room rate, total international visitor arrivals, GDP	Hotel room revenue, hotel F&B revenue, occupancy rate, gross lettings
Manasakis et al. (2013)	No. of employees, number of beds, total operational cost	Total revenues, total number of nights spent

Source: Authors.

Table 2. Model – Hotel efficiency.

Inputs:	Output:
Energy expenses	Total revenue
Room expenses	Occupancy rate
F&B expenses
Expenses associated with other services
Labour expenses

Source: Authors.

Table 3. Correlation matrix.

	Total revenue	Occupancy rate
Rooms expenses	.697**	.198*
F&B expenses	.873**	.262**
Expenses associated with other services	.437**	0.163
Energy expenses	.746**	.378**
Labour expenses	.908**	.353**
Total revenue	1	.360**
Occupancy rate	.360**	1

^* Correlation is significant at the 0.05 level (2-tailed).

^** Correlation is significant at the 0.01 level (2-tailed).

Source: Authors.

Table 4. Hotel efficiency results.

Hotel	Efficiency	Hotel	Efficiency	Hotel	Efficiency	Hotel	Efficiency
1	87%	26	100%	51	52%	76	86%
2	100%	27	100%	52	42%	77	60%
3	100%	28	65%	53	69%	78	41%
4	66%	29	43%	54	71%	79	100%
5	100%	30	100%	55	84%	80	66%
6	100%	31	100%	56	51%	81	36%
7	77%	32	38%	57	45%	82	63%
8	100%	33	33%	58	88%	83	82%
9	100%	34	100%	59	100%	84	50%
10	52%	35	93%	60	100%	85	47%
11	91%	36	71%	61	57%	86	64%
12	66%	37	48%	62	58%	87	67%
13	81%	38	49%	63	100%	88	72%
14	77%	39	23%	64	98%	89	57%
15	100%	40	94%	65	73%	90	46%
16	95%	41	100%	66	57%	91	88%
17	98%	42	62%	67	100%	92	56%
18	100%	43	53%	68	100%	93	58%
19	100%	44	75%	69	65%	94	42%
20	100%	45	100%	70	96%	95	68%
21	81%	46	60%	71	67%	96	54%
22	94%	47	61%	72	100%	97	48%
23	50%	48	96%	73	34%	98	79%
24	88%	49	100%	74	97%	99	59%
25	45%	50	55%	75	59%	100	57%

Source: Authors.

Table 5. Descriptive statistics.

Variable	Observation	Mean	Std. Dev.	Min	Max
Room expenses	100	261912	206342	10498	865899
F&B expenses	100	517308	376073	20542	1678459
Other expenses	100	47408	71157	0,00	299916
Labour expenses	100	910295	658643	77667	2852492
Energy expenses	100	213728	192983	9252	1333582
Number of stars	100	3.75	0.69	2.00	5.00
Number of rooms	100	208.50	115.70	6.00	491.00
Total revenue	100	4057512	2710427	250950	12508186
Occupancy rate	100	43.88	12.58	15.82	70.17

Source: Authors.

Table 6. Analysis of variance.

	No. stars	Hotel size
Efficiency	W(3, 4.716)=0.352	F(2,97)=5.011

Source: Authors.

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