Improved slack-based context-dependent DEA – A study of international tourist hotels in Taiwan

Abstract

In this paper, we improve the slack-based measure (SBM) of efficiency in context-dependent data envelopment analysis (DEA) and apply in measuring the performance of 34 selected Taiwan‘s International Tourist Hotels. Empirical results indicate that (1) the market differentiates five performance levels forming the benchmark structure for 34 hotels; (2) the hotels with higher attractiveness can be served as learning targets for the hotels in the lagging levels so as to establish the best path for performance improvements; (3) the hotels in the leading levels can use lower progress to analyze potential competitors in the lagging levels. The results of this study can provide hotel’s managers with insights of competitive advantage and help them with strategic decision making.