Comparative Efficiency Analysis of Tourism Industry in the Southern Mediterranean Region

Introduction: Performance evaluations are a critical tool in evaluating tourism development of countries where the tourism industry provides a significant share of the GDP. One of the measures used in performance evaluation of the financial decision-making units is economic efficiency.Aim:This study aims at measuring tourism-related technical efficiency performance of six European countries: Spain, Greece, Turkey, France, Italy, and Portugal.Method: Tourism revenue and visitor numbers are referenced as output variables. Within the model, the natural and sociocultural index and substructure index were formed. Data envelopment analysis was applied for these datasets.Results: Considering tourism revenues, Spain, Italy and Greece managed to use their natural and cultural resources efficiently. In contrast to these countries, inefficiency level scores were measured for Turkey, Portugal and France. In the model based upon the number of visitors, all other countries apart from Turkey and Portugal achieved the most efficient score. As for substructure index, the score of decreasing returns to scale for the countries of Italy and Spain in terms of tourist numbers is noteworthy.Conclusion: The implementation of efficient tourism policies and strategies hold great importance in terms of tourism efficiency.Implications: Even though Portugal and Turkey are rich in both natural and cultural assets, low scores seem to stem from failure to realize their potentials. Strategies should be developed to diversify tourist products.Originality of the Paper: This study differs from other studies in the literature with regard to the composition of the wide input components.