Evaluating the optimal occupancy rate, operational efficiency, and profitability efficiency of Taiwan's international tourist hotels

Abstract

This study uses the data envelopment analysis model to measure the optimal occupancy rate, operational, and profitability efficiency of Taiwan's international tourist hotels in a single implementation. The efficiencies calculated show that a high performance in operational efficiency does not necessarily ensure high profitability. Through optimal occupancy rate analysis, this study shows that increasing sales is not the best way to improve performance. For some hotels, it is actually better to decrease the occupancy rate in order to improve operational and profitability efficiencies. Additionally, evidence is presented that shows that inconsistent occupancy rate targets can be remedied through an empirical model.

Keywords:

• data envelopment analysis
• two-stage model
• profitability efficiency
• tourist hotel