Applying a hybrid DEA model to evaluate the influence of marketing activities to operational efficiency on Taiwan’s international tourist hotels

Abstract

This study uses the hybrid DEA model, in which the proportionate inputs are evaluated with a radial measure and the non-proportionate inputs are evaluated with a non-radial measure in order to evaluate the impact of marketing expense on the efficiency of Taiwan's international tourist hotels. We further introduce the hybrid DEA into the technology gap measurement to evaluate the technology gaps of marketing expense utilization between different operating types. The empirical results indicate that the inefficiency caused from excess marketing expense is the main reason for lower efficiency in many tourist hotels, especially to chain-operated hotels and hotels that cater to domestic clients. Through the hybrid technology gap measurement, we find that the utilization of marketing resources is more effective for independent, city type hotels, as well as those that cater to international clients.