Applying the stochastic frontier approach to measure hotel managerial efficiency in Taiwan

Ching Fu Chen

doi:10.1016/j.tourman.2006.04.023

Applying the stochastic frontier approach to measure hotel managerial efficiency in Taiwan

Ching Fu Chen

Department of Transportation and Communication Management Science

Research output: Contribution to journal › Article › peer-review

188 Citations (Scopus)

Abstract

This paper analyses the cost efficiency of Taiwan's international tourist hotel sector. A stochastic cost frontier function with three inputs (i.e. labor, food and beverage, and materials) and one output as the total revenue is specified and used to estimate hotel efficiency. The results reveal that hotels in Taiwan are on average operating at 80% efficiency. In addition, the factor of operation type significantly affects hotel efficiency, whereby the efficiency of chain hotels is higher than that of independent hotels.

Original language	English
Pages (from-to)	696-702
Number of pages	7
Journal	Tourism Management
Volume	28
Issue number	3
DOIs	https://doi.org/10.1016/j.tourman.2006.04.023
Publication status	Published - 2007 Jun

All Science Journal Classification (ASJC) codes

Development
Transportation
Tourism, Leisure and Hospitality Management
Strategy and Management

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10.1016/j.tourman.2006.04.023

Cite this

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title = "Applying the stochastic frontier approach to measure hotel managerial efficiency in Taiwan",

abstract = "This paper analyses the cost efficiency of Taiwan's international tourist hotel sector. A stochastic cost frontier function with three inputs (i.e. labor, food and beverage, and materials) and one output as the total revenue is specified and used to estimate hotel efficiency. The results reveal that hotels in Taiwan are on average operating at 80% efficiency. In addition, the factor of operation type significantly affects hotel efficiency, whereby the efficiency of chain hotels is higher than that of independent hotels.",

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Applying the stochastic frontier approach to measure hotel managerial efficiency in Taiwan

Abstract

All Science Journal Classification (ASJC) codes

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