Efficiency Measurement and Evaluation of the Greek hotel industry

Abstract

The objective of the study is to derive an efficiency measurement and evaluation for the Greek Hotel Industry. Efficiency measurement of the hotel industry and the development of robust tools for the evaluation of this efficiency have been attracted the interest of many scientists from different fields of study (management, economy, etc) for many years. Nevertheless very little work has been carried out according to the efficient frontier methods and no studies have been conducted with reference to Greece. The current study measures efficiency based on one of the most promising techniques for hotel efficiency measurement, DEA (Data Envelopment Analysis), first introduced by Charnes et al. (1978). It is a non-parametric tool which measures efficiency according to frontiers (envelop theorem) using multiple inputs and outputs. This robust technique takes into consideration the specific characteristics of the hospitality industry, which are the multiple inputs and outputs of the hotel production process (mix and nature of provided services). Data have been gathered for 532 hotels from all over Greece (Crete, Cyclades, Peloponnese, Epirus, Ionian Islands, Macedonia-Thrace, Aegean Islands, Thessaly-Sporades, Sterea Ellada), for four hotel categories (Luxury, A',B', and C') and the years 1997-2003. Efficiency is measured for the total sector as well as for each area, for each year and category. Moreover the change of efficiency throughout the 7 years is also calculated. Results indicate that Sterea Ellada (mainly Attiki), Dodecanese and Thessaly-Sporades are the most efficient areas.