Forecasting and Evaluating the Tourist Hotel Industry Performance in Taiwan Based on Grey Theory

Although Grey theory is extensively adopted to construct the forecasting models for evaluating organisational performance, it is rarely used in the hotel industry. This study draws on the GM(1,1) model to accurately predict the coming year's output value and on Grey relational analysis to select the best-performing hotels in Taiwan. Measures of hotel performance — including profit before tax, ROI before tax, revenue per employee, REVPAR, revenue per square meter, and occupancy rate — were collected from the Tourism Bureau in Taiwan. These data contain the performance of 56 international tourist hotels in 2002 and industry data from 1992 to 2005. Results in this study indicate that four-point GM(1,1) is the best model for predicting output value in the future. In addition, this investigation reveals the various competitive advantages and strategies in these top hotels, such as their appropriate site, higher price, and higher occupancy rate.