Cost efficiency and its determinants in the hotel industry

Antonio Arbelo ^[2] ; Pilar Pérez Gómez ^[2] ; Marta Arbelo-Pérez ^[1]
1. [1] Universitat Politècnica de Catalunya
  
  Universitat Politècnica de Catalunya
  
  Barcelona, España
2. [2] Universidad de La Laguna
  
  Universidad de La Laguna
  
  San Cristóbal de La Laguna, España
Localización: Tourism economics: the business and finance of tourism and recreation, ISSN 1354-8166, Vol. 23, Nº. 5, 2017, págs. 1056-1068
Idioma: inglés
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Resumen
- This study employs a stochastic frontier model to estimate cost efficiency and its determinants in the hotel industry in Spain between 2008 and 2012. Measuring cost efficiency provides useful information on the performance of hotels to management, shareholders and, in general, to all stakeholders. Cost control is an issue managers are particularly concerned about, as it gives a competitive advantage that allows hotels to perform better. The results indicate that the inefficiency in average costs for the sample considered is 32.44% and is time invariant. The results also show that labour productivity, the accumulation of knowledge and location are factors that largely determine the differences in efficiency between hotels. These findings have important implications for public policymakers and hotel management, specifically, policies aimed at improving the skills of hotels’ human resources should be encouraged. Likewise, both location and the accumulation of knowledge are strategic resources that hotel management must include in their competitive strategies to increase efficiency.