Disentangling technology gap using a non-convex three-hierarchy meta-frontier framework: insights into the contemporary cruise segment

Abstract

The adoption of diverse technologies across decision-making units can result in significant technology gaps and variations in efficiency levels. To better disentangle different layers of technology gaps and provide insights into drivers of efficiency disparities, this study proposes a non-convex three-hierarchy meta-frontier framework based on data envelopment analysis. This framework is applied to empirically examine revenue efficiency and technology heterogeneity in the contemporary cruise segment. Specifically, the study analyzes the data of 112 cruise ships across seven brands owned by four key players in the segment. Our analysis uncovers the following key findings: (1) Notable disparities in technology and revenue efficiency existed between competing companies; (2) While under the same organizational umbrellas, cruise brands pursued unique strategies, yielding different outcomes; (3) Limited diffusion of technology within brands constrained many ships' revenue efficiency. Advanced technology was only accessible to a few ships rather than uniformly adopted. (4) Mega ships could be lucrative revenue generators for cruise operators. Our findings provide insights into formulating policies tailored for each cruise brand and company to unlock their revenue potential and sustain their competitive edge in this dynamic cruise segment.