A Global Benchmarking of the Hotel Industry

Abstract

This paper presents an efficiency analysis of some of the leading hotel companies around the world. The authors estimate efficiency with the stochastic frontier semi-parametric approach, which is unique in the hotel context and has several advantages over other traditional methodologies used in the hotel literature. The results, derived from a sample of 37 countries, indicate that the most efficient hotel companies operate in Switzerland, the UK, Spain and the UAE, while the least efficient hotel chains operate in Croatia, Slovakia and Kenya. On a regional basis, the hotel industries in the USA and Europe seem to enjoy the highest efficiency, followed by the Middle East, South America and Africa. Finally, we show that international hotel chains are more efficient than national hotel chains or hotels that are independently owned.