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

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  • 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
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    References listed on IDEAS

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    Cited by:

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    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. Roslah Arsad, 2024. "Measuring Efficiency Performance in Economic Productivity Function: Parametric and Non-Parametric Frontier Approach," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(8), pages 4162-4172, August.
    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.
    6. 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.

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