Abstract
The purpose of this study is to compute the cost efficiency of international tourist hotels ( ITHs) in Taiwan and analyze how regional environmental quality affects cost efficiency. The study collects a variety of operating data of international tourist hotels in Taiwan between 1998 and 2009 from the Annual Tourist Hotels Operational Analysis Report, as published by the Tourism Bureau. The data of regional environmental quality are collected from the Taiwan Environment Data Warehouse. This study first uses data envelopment analysis ( DEA) for computing cost efficiency, and then applies the truncated regression to investigate the impact of environmental indicators on cost efficiency. Namely, it is a two-stage DEA-regression method. The empirical results indicate that the density of pungent air pollutants, such as O3 and SO2, have significantly negative impacts on the cost efficiency of ITHs in Taiwan. However, the high volume of waste disposal and low recycling rate reflect a higher business activity intensity in a region, which positively enhances ITHs’ cost efficiency.
Highlights
In recent years, the rapid economic development and improved quality of material life have led to a relatively busy, fast, and oppressive pace of life
The results showed that the average cost efficiency of international tourist hotels (ITHs) in Taiwan during the period of 1998-2009 was about 67.8%; in other words, the average input cost of the hotel can be further reduced by 32.2%, while maintaining the state of outputs
This paper finds that as the rural level increases, the cost efficiency of an ITH decreases, implying that the degree of urbanization in the local area helps improve the cost efficiency of an ITH, which is consistent with the findings of Hu et al (2010)
Summary
The rapid economic development and improved quality of material life have led to a relatively busy, fast, and oppressive pace of life. Due to intense changes in natural environments, the world focuses on issues of environmental protection. According to the statistical data of the Tourism Bureau, the Ministry of Transportation, 9.415 million tourists went sightseeing in Taiwan in 2010, growing from 8.142 million in 2009 (15.6%). According to the data of World Tourism Organization (2011), the total number of tourists in the world in 2010 was 935 billion, an increase of 7% compared to that in 2009. According to the statistical data of World Travel & Tourism Council (WTTC), in 2010, the global tourism industry (including tourism-related industries, input, and taxation ) accounted for about 9% of the GDP (equivalent to 5.7 trillion USD), growing by about 1.7%, as compared to that in 2000.
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