Performance measurement of Taiwan hotels with a hierarchical network DEA with shared inputs
by Weiwei Zhu; Huaping Lin; Yu Yu; Mojtaba Ghiyasi
International Journal of Applied Decision Sciences (IJADS), Vol. 16, No. 4, 2023

Abstract: The structure of a hotel and its operational departments (e.g., catering department and occupancy department) is appropriate in a hierarchical organisation. However, the previous DEA research only focuses on the network process of internal structures for the hotel systems. Therefore, this paper develops a hierarchical network, DEA, to evaluate the hotels' operational performance with the hierarchical network production systems. Moreover, the shared inputs of hotels could be allocated vertically along the hierarchical structure. An empirical analysis using data from 70 Taiwan's international tourist hotels in 2014 was conducted. The results show that the overall operational efficiency of 70 hotels is low, and is attributed to a shortage in the transformation of service capability to earning capability. Meanwhile, although all hotels allocate a large proportion of shared inputs to the catering department, the operational efficiency of the catering department is mostly lower than the occupancy department. The proposed model also can be used for the production systems, which include a hierarchical network structure and some shared inputs.

Online publication date: Tue, 04-Jul-2023

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