Taiwanese International Tourist Hotels Research Articles

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

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.

A DEA-based two-stage network approach for hotel performance analysis: An internal cooperation perspective

In the digital era, cooperation has become a new way of firm operation, but only rarely have studies investigated how internal cooperative mechanisms among departments affect firm performance evaluation. Grounded on resource-based view theory, a two-stage network structure model of a hotel (i.e. operations stage and marketing stage) is presented, illustrating how a hotel consumes internal resources and obtains competitive advantages and market profits. A DEA-based bi-objective model is put forward to evaluate the hotel performance from the perspective that the two internal stages cooperate with each other. To solve the proposed model, an extended augmented weighted Tchebycheff metric and a new algorithm are used. An empirical analysis using data from 68 Taiwanese international tourist hotels in 2011 was conducted, and the results corroborated the theorems and remarks about the proposed model. This study offers a comprehensive benchmarking tool to improve hotel decision-making.

PERFORMANCE EVALUATION OF TAIWANESE INTERNATIONAL TOURIST HOTELS: EVIDENCE FROM A MODIFIED NDEA MODEL WITH ICA TECHNIQUE

The motivation for this study is to assess the managerial performance in Taiwanese international tourist hotels based on the two-stage NDEA performance mechanism with ICA technique for enhancing the discriminatory power of performance evaluation model. The two-stage managerial performance structure is applied, incorporating the service production and service operation stages, as a reduced form to introduce the relatively complex business environment of modern enterprise. However, we have need to be considerable of dimensionality curse problem in NDEA performance model. A modified NDEA-based evaluation model, therefore, is proposed to integrate the network slacks-based measure (NSBM) with a dimensional reduction technique, the independent component analysis (ICA). The results indicate that the performance of the profit dimension significantly hampers operational performance, and that both regulators and managers must adjust their market orientation business strategy. Moreover, compared with the NSBM model, this modified ICA-NSBM performance model has a high discriminatory ability to measure the relative performance of the selected hotels.

An investigation of factors affecting financial performance of taiwanese international tourist hotels

An investigation of factors affecting financial performance of taiwanese international tourist hotels

How Does Advertising Affect the Price Elasticity of Lodging Demand? Evidence from Taiwan

This paper empirically studies the role played by advertising on the price elasticity of lodging demand in the Taiwanese hotel industry. There are two theoretical views regarding the role of advertising. The persuasive view emphasizes that advertising creates brand royalty and reduces customers' price sensitivity. By contrast, the presumptive view is that advertising lifts marginal consumers' willingness to pay, flattens the demand curve and increases the equilibrium price elasticity. Using data from operation reports of Taiwanese international tourist hotels during 1995–2008, an ordinary least squares (OLS) analysis finds that advertising reduces consumers' price sensitivity. However, the quantile regression results suggest that the change in price elasticity generated by advertising is of an unequal pattern. In other words, the influence of advertising on price elasticity exists but varies by the level of price elasticity. The authors also examine empirically the moderating influence of advertising on the pricing strategy–hotel performance link. The estimation results indicate that the interaction term of room rate and advertising expenditure has a positive effect on room revenue. The results lend some support to the view that advertising has a moderating influence on the relationship between hotel price and financial performance.

Using the nonhomogeneous frontier two‐stage DEA model to assess the efficiencies of expense utilization and operation of the Taiwanese hotel industry

AbstractIn conventional multistage data envelopment analysis (DEA) studies, different hotel types are mostly assumed to be in a single technology set. However, the assumption that a single technology can have multiple operating types has been criticized by researchers in the past. To overcome this shortcoming, the main propose of this study is to establish a combination of the models of Tone and Chen and Zhu in order to assess the efficiencies of two hotel types. We first provide evidence that there is an existing defect arising from the direct combination of the two models. The nonhomogeneous two‐stage model is established to evaluate the operational and expense utilization efficiencies for the Taiwanese international tourist hotels. The results verify that the defect from the direct combination of these models can be corrected by the new model. Empirical evaluation reveals that independent hotels have higher expense utilization efficiency and chain hotels have higher operational efficiency. The evaluation also indicates that tourist hotels can achieve best practices through a mutual learning strategy.

Advertising, Price and Hotel Service Quality: A Signalling Perspective

This study investigates two main issues: the relationship between advertising expenditure and service quality, and the relationship between price and service quality in the hotel industry. The authors consider an asymmetric-information environment, in which consumers are uncertain about service quality, and address the above issues from a signalling perspective. Building on signalling and counter-signalling theory in economics, the authors propose a number of testable hypotheses and conduct an empirical study using data for Taiwanese international tourist hotels. The empirical results support the hypothesis that the advertising–quality relationship is inverted-U shaped, whereas the price–quality relationship is positive and monotonic. Hence, higher prices may signal higher service quality, whereas higher advertising expenditure does not necessarily signal higher service quality.

Research Note: Estimating the Work Time Effect on Hotel Room Demand

The introduction of the five-day working week in Taiwan constitutes a natural experiment with treatment and control groups that lends itself to the difference-in-difference approach used in this study. Based on this empirical design, a treatment group consisting of domestic guests and a control group consisting of foreign guests are formed. The study hypothesizes that, after the introduction of this work day system, room demand in the treatment group will exceed the corresponding increase in the control group. This hypothesis is based on the findings of Taiwanese international tourist hotels, which suggest that the implementation of the five-day working week system in 2001 accounted for a significant increase in hotel demand.

Cross-Efficiency Evaluation of Taiwan's International Tourist Hotels Under Competitive and Cooperative Relationships

Improving upon previous performance evaluation models, this study advances an integrated cross-efficiency evaluation approach to measure and compare the performances, in terms of operational efficiency, of 12 Taiwanese international tourist hotels (ITHs) having both competitive and cooperative relationships under four hotel chains from 2004 to 2008. The results show that compared with the traditional data envelopment analysis (DEA) model, the advanced approach offers superior results in providing unique ranking of and meaningful managerial implications for the ITHs under evaluation. In particular, Hotel Royal Taipei and Hotel Royal Chihpen outperformed their counterparts from 2004 to 2008, which subsequently helped Hotel Royal Group rank first when comparing with other hotel chains. Ambassador Hotel group ranked last, and this ranking should send a warning signal to their management.

Energy consumption characteristics of hotel's marketing preference for guests from regions perspective

This research analyzed how hotel's marketing preference for certain guests from different world regions would influence their energy consumption and the revenue generated by them who travel and lodge in Taiwan. Energy consumption data, building information, and hotel operation data were collected from 49 Taiwanese international tourist hotels and 24 standard tourist hotels, which are equivalent to five and four-star hotels. The statistical results show that the energy use among hotels under surveyed ranges between 83 and 408 MJ/guest per night, and could create averaged revenue of US$149 for each guest accommodated. To identify a hotel's primary marketing preference for accommodating certain region of guests, factors of certain regional guest ratios were employed. Multiple-regression model was established to characterize the hotel energy consumption via regional guest ratios. It indicates that the energy consumption varied with hotels' regional guest ratios. It also reveals that hotels with their marketing preference for accommodating guests from Europe and North America would have higher energy use characteristic followed by those aiming for guests from Australia, Asia (excluding Japan and China), Japan, domestic Taiwan, and China in descending order. Multiple regression models were used to investigate relationships between the yearly energy consumption and total revenue of hotels. The models established are statistically reliable and could be beneficial for hotel's marketing, room price fixing, or operating references. The study also reveals that guests from the well developed countries would generally create more revenue. However, additional expenses on energy will also incur for hotels whose marketing preference towards them, which may possibly exceed their profit. In profit-energy costs perspective, it is recommended that hotel targeted for guests from Japan might be the most beneficial in Taiwan.

Factors influencing the implementation of food safety control systems in Taiwanese international tourist hotels

The aim of this study was to analyze food safety control systems (FSCS) in selected hotels in Taiwan in order to identify current issues and future trends in the hotel industry. Fourteen interviews were conducted with personnel in six large international tourist hotels with a FSCS in place. Analysis of the interviews indicated that a hotel's food safety standards and operations depended significantly on the attitudes of the hotel management. Public concern, competitive advantage and the government's food safety policies all had less influence on the implementation and maintenance of a FSCS than the ongoing support of management. Hotel managements hope, therefore, that the government will educate the public on food safety and provide incentives that enable hotels to adopt FSCS strategies while reducing the cost. The study contributes to the development of theory relating to the implementation of food safety strategies, particularly for the hotel industry.

What Does Hotel Website Content Say About a Property—An Evaluation of Upscale Hotels in Taiwan and China

ABSTRACT Websites are important platforms for hotel Internet marketing. Website content can directly influence customer preferences and decisions. This study proposes a comprehensive model, which is more objective and valid than others, to evaluate 158 hotel websites in Taiwan and China according to three dimensions: feature breadth, stage of website development, and feature enrichment. The samples came from four different types of hotels: Taiwanese international tourist hotels, Taiwanese ordinary tourist hotels, Chinese five-star hotels, and Chinese four-star hotels. We find that these four types of hotels emphasize features on their websites differently and that the degree of website robustness ranks as follows: Taiwanese international tourist hotels, Taiwanese ordinary tourist hotels, Chinese five-star hotels, and Chinese four-star hotels. Managerial implications and suggestions are also proposed.

A study on the energy performance of hotel buildings in Taiwan

This study presents a discussion on the energy performance of hotel buildings in Taiwan. Energy consumption data, building information, and other operations data were collected from 45 Taiwanese international tourist hotels, 19 standard tourist hotels, 116 hotel enterprises, and 20 bed and breakfast facilities. The energy use intensity (EUI) of the 4 rated hotels is 280.1, 237.7, 186.3, and 143.6kWh/m2/year. Mean energy consumption per guest room at the 4 rated hotels is 26.7, 25.0, 14.6, and 9.4MWh/room/year. Electricity predominantly comprises total energy consumption, which accounts for 84% of total energy on average. Pearson correlations between EUI and possible explanatory indicators revealed that certain building conditions, operations, and other factors are significant. Two regression models were established to predict annual energy consumption and EUI, and gross floor area, number of guest rooms, occupancy rate, and building construction year were selected as independent variables. The coefficient of the adjusted R2 is 0.928 and 0.612, which implies reliability. This study provides managerial suggestions according to the results for improving hotel energy performance.

The market structure, conduct and performance paradigm re-applied to the international tourist hotel industry

This paper presents a market structure, conduct, performance model (SCP) of industrial economics to estimate causes and effects among the international tourist hotel industry. Previous literature could not confirm the causality of the hotel industry, therefore, this paper develops a comprehensive model, based on realistic data of hotels, which allows the analysis of the system through three simultaneous equations, market share, advertising, and profitability. In a sample of 360 Taiwanese international tourist hotels, from 1995-2006, three-stage least squares results indicate that: (1) two-way causes and effects exist between the market structure and strategic behavior, which is detected from the incentive pattern of the SCP model; (2) a brand positive effect shows on the market share; (3) a firms’ profitability is positively, and significantly, impacted by market share, but is affected negatively by total operating costs and capital intensity, which confirms hotel industry issues regarding capital. Key words: Hotels, market structure, conduct, performance.

Assurance region context-dependent DEA with an application to Taiwanese hotel industry

This study proposes assurance region (AR) context-dependent data envelopment analysis (DEA) and applies the restricted weights derived by analytic hierarchy process in measuring the performance of 34 selected Taiwanese international tourist hotels during the years 1997?2006. Empirical results indicate that: AR context-dependent DEA has more of an efficiency segment than context-dependent DEA; the market differentiates 10 performance levels that form the benchmark structure for 34 hotels; hotels with higher attractiveness can serve as learning targets for hotels at lagging levels so as to establish the best path for performance improvement; and hotels at leading levels can use lower progress to analyse potential competitors at lagging levels. The results of this study can provide hotel managers with insights into competitive advantage and can help them with strategic decision-making.

Cost structure and productivity growth of the Taiwanese international tourist hotels

This study investigates the cost structure and economic implications of the Taiwanese international tourist hotel industry. A multi-product translog cost function with three inputs and three outputs is estimated using seemingly unrelated regression estimation and three-stage least squares. A balanced panel dataset consisting of 47 international tourist hotels in Taiwan over the period 1997–2001 was obtained from Taiwanese Tourism Bureau and used to estimate the cost function. The results show that both scale and scope economies exist in the Taiwanese international tourist hotel industry. In addition, productivity growth is positive over the study period. Managerial and policy implications for the Taiwanese international tourist hotel industry are also discussed.