An integration of the multi-component DEA and GAR models to the measurement of hotel performance

Abstract

The aim of this paper is to identify how well each hotel performs in each of its room and food and beverage divisions. To this end, this paper develops a multi-component data envelopment analysis/global assurance region (MDEA/GAR) model to fully gauge hotel performance where each hotel has its specific inputs and outputs for both divisions as well as shared inputs and common outputs between the two divisions. The application shows how the MDEA/GAR model can incorporate preferable hotels among the efficient ones with higher profit earning ratios when evaluating hotel performance. The results show that members of international chain-managed hotels perform significantly better than local chain-managed and independently managed hotels.