Preparing for a future crisis: using DEA-based performance analysis to assess initial pandemic responses in the Taiwanese hotel industry

Abstract

PurposeTaiwan’s hotel industry was adversely impacted by the COVID-19 pandemic. This study aims to examine the effect of strategic choices by Taiwanese international tourist hotels before and during the pandemic environments.Design/methodology/approachA data envelopment analysis (DEA)-based Malmquist methodology is used in this study to provide a mechanism to assess Taiwanese hotel strategy performance. Changes in the productivity and performance of Taiwanese international tourist hotels were analyzed in the periods before and during the pandemic to uncover insights useful should a similar crisis occur in the future. Panel data were obtained from the annual report of international tourist hotels published by the Taiwan Tourism Bureau from 2017–2020. Two groups of hotels were analyzed in this study: city hotels and scenic hotels.FindingsThe findings of this study reveal that chain hotels tended to perform better than independent hotels in both city and scenic areas during the global pandemic. Specifically, the crisis caused a substantial decline in productivity and profitability for international tourist hotels in Taipei City during the COVID-19 period. Compared to city hotels, findings also indicate that most international tourist hotels in scenic areas were able to maintain better productivity, including larger-sized scenic hotels.Originality/valueThe DEA-based analysis provides unique and valuable insights for hotel firm leaders on how to better identify and make strategic choices when responding to future crises.