IDEAS home Printed from https://ideas.repec.org/a/sae/toueco/v20y2014i4p797-812.html
   My bibliography  Save this article

Cost Efficiency of Portuguese Hotels in the Algarve: A Comparative Analysis Using Mathematical and Econometric Approaches

Author

Listed:
  • Ricardo Oliveira
  • Maria Isabel Pedro
  • Rui Cunha Marques

    (CESUR - Center for Urban and Regional Systems, Av Rovisco Pais, 1049 001 Lisbon, Portugal)

Abstract

A sample of 28 prestige hotels on the Algarve (Portugal) is analysed to compare the results of the data envelopment analysis and stochastic frontier approach techniques in order to measure cost, allocative and technical efficiencies. The results suggest that efficiencies are similar when they are calculated by these two models. Companies with five-star hotels, hotels with golf courses and owners of only one hotel have higher efficiency levels than their peers. One explanation for this evidence is that these models express themselves through cost or production technologies, allowing them a better fit.

Suggested Citation

  • Ricardo Oliveira & Maria Isabel Pedro & Rui Cunha Marques, 2014. "Cost Efficiency of Portuguese Hotels in the Algarve: A Comparative Analysis Using Mathematical and Econometric Approaches," Tourism Economics, , vol. 20(4), pages 797-812, August.
    • Handle: RePEc:sae:toueco:v:20:y:2014:i:4:p:797-812
    DOI: 10.5367/te.2013.0309
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5367/te.2013.0309
    Download Restriction: no
    File URL: https://libkey.io/10.5367/te.2013.0309?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Cherchye, L. & Abeele, P. Vanden, 2005. "On research efficiency: A micro-analysis of Dutch university research in Economics and Business Management," Research Policy, Elsevier, vol. 34(4), pages 495-516, May.
    2. Francisco J. Bastida-Albaladejo & Bernardino Benito & José Antonio García, 2000. "The Determinants of Efficiency in Municipal Governments," Regional and Urban Modeling 283600005, EcoMod.
    3. Marianna Sigala & Peter Jones & Andrew Lockwood & David Airey, 2005. "Productivity in hotels: a stepwise data envelopment analysis of hotels' rooms division processes," The Service Industries Journal, Taylor & Francis Journals, vol. 25(1), pages 61-81, January.
    4. Kristof De Witte & Rui Marques, 2010. "Designing performance incentives, an international benchmark study in the water sector," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 18(2), pages 189-220, June.
    5. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    6. Pavlyuk, Dmitry, 2010. "Regional Tourism Competition in the Baltic States: a Spatial Stochastic Frontier Approach," MPRA Paper 25052, University Library of Munich, Germany.
    7. JG. Brida & C. Detotto & M. Pulina, 2011. "How efficient is the Italian hospitality sector? A window DEA and truncated-Tobit analysis," Working Paper CRENoS 201102, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    8. Dieter J. Haas, 2003. "Productive efficiency of English football teams-a data envelopment analysis approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 24(5), pages 403-410.
    9. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jose M. Cordero & Nickolaos G. Tzeremes, 2017. "Evaluating hotel productivity growth in Balearic and Canary islands," Tourism Economics, , vol. 23(5), pages 1146-1154, August.
    2. Bo Zhou & Yanping Xu & Seul Ki Lee, 2019. "Tourism development and regional production efficiency: Evidence from southwestern China," Tourism Economics, , vol. 25(5), pages 800-818, August.
    3. Jorge M. Andraz & Nélia M. Norte & Hugo S. Gonçalves, 2016. "Do tourism spillovers matter in regional economic analysis? An application to Portugal," Tourism Economics, , vol. 22(5), pages 939-963, October.
    4. A. George Assaf & Alexander Josiassen & Haemoon Oh, 2016. "Internationalization and hotel performance," Tourism Economics, , vol. 22(3), pages 572-592, June.
    5. Diana Corina Gligor-Cimpoieru & Valentin Partenie Munteanu & Renata Dana Nițu-Antonie & Andreia Schneider & Gheorghe Preda, 2017. "Perceptions of Future Employees toward CSR Environmental Practices in Tourism," Sustainability, MDPI, vol. 9(9), pages 1-14, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chin‐wei Huang & Hsiao‐Yin Chen, 2023. "Using nonradial metafrontier data envelopment analysis to evaluate the metatechnology and metafactor ratios for the Taiwanese hotel industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 1904-1919, June.
    2. Carlos Pestana Barros & Gaël Bertrand & Laurent Botti & Scott Tainsky, 2014. "Cost efficiency of French rugby clubs," Applied Economics, Taylor & Francis Journals, vol. 46(23), pages 2721-2732, August.
    3. Carlos Pestana Barros & Stephanie Leach, 2006. "Analyzing the Performance of the English F.A. Premier League With an Econometric Frontier Model," Journal of Sports Economics, , vol. 7(4), pages 391-407, November.
    4. Amara, Nabil & Rhaiem, Mehdi & Halilem, Norrin, 2020. "Assessing the research efficiency of Canadian scholars in the management field: Evidence from the DEA and fsQCA," Journal of Business Research, Elsevier, vol. 115(C), pages 296-306.
    5. Tourinho, Marco & Santos, Paulo Rosa & Pinto, Francisco Taveira & Camanho, Ana S., 2022. "Performance assessment of water services in Brazilian municipalities: An integrated view of efficiency and access," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    6. António Afonso & Ana Patricia Montes & José M. Domínguez, 2024. "Measuring Tax Burden Efficiency in OECD Countries: An International Comparison," CESifo Working Paper Series 11333, CESifo.
    7. Barros, Carlos Pestana & Williams, Jonathan, 2013. "The random parameters stochastic frontier cost function and the effectiveness of public policy: Evidence from bank restructuring in Mexico," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 98-108.
    8. Noel Uri, 2003. "The Effect of Incentive Regulation in Telecommunications in the United States," Quality & Quantity: International Journal of Methodology, Springer, vol. 37(2), pages 169-191, May.
    9. Badunenko, Oleg & Galeotti, Marzio & Hunt, Lester C., 2021. "Better to grow or better to improve? Measuring environmental efficiency in OECD countries with a Stochastic Environmental Kuznets Frontier," FEEM Working Papers 316226, Fondazione Eni Enrico Mattei (FEEM).
    10. Idiano D’Adamo & Cinzia Daraio & Simone Di Leo & Léopold Simar, 2024. "A Flexible and Sustainable Analysis of Waste Efficiency at the European Level," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 25(4), pages 881-894, December.
    11. Subhash C. Ray & Lei Chen, 2015. "Data Envelopment Analysis for Performance Evaluation: A Child’s Guide," Springer Books, in: Subhash C. Ray & Subal C. Kumbhakar & Pami Dua (ed.), Benchmarking for Performance Evaluation, edition 127, chapter 0, pages 75-116, Springer.
    12. J. Cummins & Hongmin Zi, 1998. "Comparison of Frontier Efficiency Methods: An Application to the U.S. Life Insurance Industry," Journal of Productivity Analysis, Springer, vol. 10(2), pages 131-152, October.
    13. Dina A. M. Miragaia & João J. M. Ferreira & Cédric T. Vieira, 2024. "Efficiency of Non-profit Organisations: a DEA Analysis in Support of Strategic Decision-Making," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 3239-3265, March.
    14. Ahn, Heinz & Clermont, Marcel & Langner, Julia, 2023. "Comparative performance analysis of frontier-based efficiency measurement methods – A Monte Carlo simulation," European Journal of Operational Research, Elsevier, vol. 307(1), pages 294-312.
    15. A. Guerrini & G. Romano & L. Carosi & F. Mancuso, 2017. "Cost Savings in Wastewater Treatment Processes: the Role of Environmental and Operational Drivers," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(8), pages 2465-2478, June.
    16. Musshoff, Oliver & Hirschauer, Norbert & Herink, Michael, 2009. "Bei welchen Problemstrukturen sind Data-Envelopment-Analysen sinnvoll? Eine kritische Würdigung," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 58(02), pages 1-11, February.
    17. Caitlin O’Loughlin & Léopold Simar & Paul W. Wilson, 2023. "Methodologies for assessing government efficiency," Chapters, in: António Afonso & João Tovar Jalles & Ana Venâncio (ed.), Handbook on Public Sector Efficiency, chapter 4, pages 72-101, Edward Elgar Publishing.
    18. Alessandra Cepparulo & Gilles Mourre, 2020. "How and How Much? The Growth-Friendliness of Public Spending through the Lens," European Economy - Discussion Papers 132, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    19. Gil, Guilherme Dôco Roberti & Costa, Marcelo Azevedo & Lopes, Ana Lúcia Miranda & Mayrink, Vinícius Diniz, 2017. "Spatial statistical methods applied to the 2015 Brazilian energy distribution benchmarking model: Accounting for unobserved determinants of inefficiencies," Energy Economics, Elsevier, vol. 64(C), pages 373-383.
    20. Philippe K. Widmer & Peter Zweifel, 2008. "Public Good Provision in a Federalist Country: Tiebout Competition, Fiscal Equalization, and Incentives for Efficiency in Switzerland," SOI - Working Papers 0804, Socioeconomic Institute - University of Zurich, revised Dec 2010.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:toueco:v:20:y:2014:i:4:p:797-812. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.