Evaluating the Hotel Industry Performance Using Efficiency and Effectiveness Measures [Summary]

The research found out that most of the sample hotels in India have been operating highly inefficiently and ineffectivity with the average score of hotels that tells 43% efficient and 18% effective. That is why it is suggested to hotel managers to benchmark practices of most efficient and effective hotels that have similar vision and mission. Moreover, the DEA score is highly affected by the selection of the variables, so it is important to consider the various sets of input and output variables before efficiency and effectiveness scores. For better efficiency, it is suggested to involve in management contract with international hotel chains via a strategic partnership or alliance in order to obtain expert knowledge and strategic resources. Moreover, strong brand awareness of international hotels would bring to the business more revenues from international travelers. Some hotels’ inefficiency was analyzed to be due to excess input, so it is recommended for managers to put these resources to advertising and marketing for extra revenues. Lastly, for improving the efficiency of the hotel industry, the government could help the industry by providing subsidy to invest in technologies or giving tax-cutting temporarily.