Service outsourcing and hotel performance: three-stage DEA analysis

Abstract

This article is the first to apply the three-stage DEA procedure to analyze the impact of service outsourcing on the performance of hotels. In the first stage of analysis, outsourcing hotels are more efficient than nonoutsourcing hotels. However, after purging the effects of exogenous factors, this study found that the average managerial efficiency score computed in the three-stage DEA procedure was 0.917 or alternatively that hotels on average are 8.3% resources waste. Furthermore, service outsourcing is not the main determinant of the efficiency of international tourist hotels in Taiwan.