Tourist Preferences and Cost Efficiency of International Tourist Hotels in Taiwan

Hwai-Shuh Shieh, Jin-Li Hu, Li-Ying Gao
2014 International Journal of Marketing Studies  
This paper analyzes the effects of tourist nationality sources on international tourist hotels' (ITHs) cost efficiency in Taiwan and the factors affecting a tourist's choice of a hotel. The data envelopment analysis (DEA) approach is used to compute cost efficiency scores of 61 ITHs in Taiwan during 1998-2007. The number of Asian, North American, Japanese, and local tourists has significantly positive effects on cost efficiency, but the number of overseas Chinese has a negative effect on cost
more » ... ve effect on cost efficiency. The number of tourists of other nationalities has no influence on cost efficiency. Generally, most tourists in Taiwan prefer a larger, older, and closer-to-airport hotel. This study also finds that the chain system, the number of scenic spots surrounding hotels, and the ratio of individual tourists all significantly improve the cost efficiency of ITHs in Taiwan. investigated the operational efficiency of 48 tourist hotels in the U.S. in 1994 through SFA and DEA. The input variables included the number of employees, the number of rooms, casino and entertainment expenditures, and food expenditure and other expenditure, while the output variables included income from rooms, income from casino and entertainment, and income from food and others. The results showed that the average efficiency of 48 tourist hotels is up to 89.4% when using DEA, whereas it is 94.6% when using SFA. Hotels' Efficiency in Taiwan The literature applying DEA to compute the efficiency of Taiwan's hotel industry includes . Some studies have adopted SFA to evaluate the efficiency of Taiwan's hotel industry, such as Chen (2007) and Hu et al. (2010) . We summarize these papers as follows. Tsaur (2001) used DEA to evaluate the operating efficiency of 53 international tourist hotels (ITHs) in Taiwan during 1996-1998. The result indicated that the average operating efficiency score is 87.33%, which implies that managers on average could reduce their input costs by 12.67% if they operated on the efficient frontier. The DEA results showed that the hotel industry in Taiwan is operating efficiently. However, 71.7% of the ITHs in International Journal of Marketing Studies Vol. 6, No. 3; Chen et al. (2010) analyzed the effects of tourist nationalities on the cost efficiency of ITHs in Taiwan during 1996 to 2007. The input variables were number of guest rooms, number of employees, and total floor space of the catering division. The output variables included total revenues from food and beverage (F&B), total revenues from rooms, and other revenues. The number of tourists by nationally was one of the environmental variables, which was a new idea in the hotel industry. The study showed that the numbers of local Taiwanese, North American, Japanese, and Australian tourists increase the cost efficiency of ITHs in Taiwan, whereas the numbers of other Asian tourists (including mainland China) have no significant effects on cost efficiency. Shieh (2012) investigated the link between 'green' and cost efficiency in the hotel industry in Taiwan. Empirical evidence indicated that 'green' renders a hotel ineffective.
doi:10.5539/ijms.v6n3p35 fatcat:yoesicyzmbeipoaqwz3zo4fuoi