An Analysis of Spanish Hotel Efficiency

Abstract

Using data envelopment analysis, this paper investigates operational efficiency drivers for 166 Spanish hotels divided into medium and upper chain scale groups from 2000 through 2009. For the sample as a whole, the analysis indicated a strong relationship between quality levels and efficiency; resort hotels were more efficient than other types of properties, and large hotels were more efficient than smaller properties. The effects of star rating were shown in diverse findings regarding intangible investment and group membership. Midscale hotels belonging to a hotel group were more efficient, but that was not true of upscale properties. Quality represented a boost for midscale hotels but not for upscale properties. However, upscale properties had gained efficiency from investments in intangibles (such as information systems), while the midlevel hotels had not made those investments.