Research Note: Analysing the Efficiency of the Taiwanese Hotel Industry: A Stochastic Metafrontier Approach

Abstract

This paper compares the cost efficiency and meta-technology ratios for three groups of Taiwanese international hotels during the period 1998–2007 using the stochastic metafrontier approach. The empirical results support the view that the technology gap plays an important role in explaining the ability of hotels in one group to compete with hotels in different operating companies. In addition, the results indicate that hotels differ in cost efficiencies; that is, international chain hotels have the highest cost efficiencies, while independent hotels have the lowest.

Keywords

metafrontier cost efficiency technology gap hotel industry heterogeneity

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