Determinants of tourism hotel market efficiency

Abstract

Purpose The purpose of this paper to study the hotel performance determinants by examining the impact of the internal and the external environment of the hotel on its performance. Design/methodology/approach A bootstrapped truncated regression model is used following the evaluation of efficiency score for hotels using data envelopment analysis (DEA). The effects of the cited variables are discussed to determine the best development strategy for increasing hotel performance. Findings This paper has four major contributions. First, the test results confirm that macro-contextual factors, such as international attraction and market competition, have a direct influence on hotel efficiency. Second, hotel efficiency depends on hotel characteristics, such as hotel age, hotel type, management type and the location of the hotel. Third, the tenure of the general manager, education level of the board staff and number of managers influence hotel efficiency. Finally, general tourism wages increase the efficiency score of the corporate hotel performance. Research limitations/implications Tourism employment studies require further improvement, and their challenges should be highlighted when countries develop tourism strategies. Moreover, hiring employees with a better educational background appears to be an effective human resource strategy to reduce inefficiency in the hotel sector. Tourism performance and development need a thorough investigation into tourism wages to attract the best students and the best graduates to the tourism sector to bring out the needed number and skills of employees. Practical implications The conclusions of this paper are consistent with the literature results. However, it is important to separate market concentration from market competition for whose literature concluded an opposite influence on the hotel performance. The authors explain this contrast by the measure choice. Social implications The performance of the hotel depends not only on the physical resources and on the destination characteristics but also on the management characteristics. Originality/value This paper is the first to test empirically the influence of destination attractiveness, competition level, hotel size, hotel age, management contract, hotel type, location, advertising, manager’s tenure, tourism education and wages on the hotel performance in Tunisia.