Operational Performance and Benchmarking: A Case Study of International Tourist Hotels in Taipei

Operational performance evaluation and process improvement in hotels have been the focus of several studies, a number of which have used Data Envelopment Analysis (DEA) to evaluate the operational performance of hotels in different destinations. This study sets out to evaluate the operational efficiency of twenty-three tourist hotels in Taipei over five years (2003 to 2007) using DEA models and the cross-efficiency evaluation method. Efficiency measures are based on four input measures: the total number of hotel rooms, the total number of employees, food and beverage (F&B) capacity, and total operating cost. The three output measures are guest room revenue, F&B revenue, and other revenue. The efficiency scores derived from the DEA models are subject to clustering analysis to identify benchmarks for efficiency improvement in poorly performing hotels. The contributions and managerial implications of the study are discussed.