International Advances in Economic Research

, Volume 10, Issue 3, pp 215–225 | Cite as

Productivity in the tourism industry

  • Carlos P. Barros
  • Fernando P. Alves


This paper analyzes the efficiency of a Portuguese public-owned hotel chain, Enatur. It applies data envelopment analysis (DEA) to estimate total factor productivity (TFP) change, while breaking it down into technical efficiency and technological change. The benchmarking procedure used is an internal one, which compares hotels with each other. For the period 1999–2001, the hotels are ranked according to their total productivity change. It is concluded that some hotels experienced productivity growth, while others faced a decline. Some implications beneficial for managerial policies were drawn from this study.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Anderson, R. I.; Fish, M.; Xia, Y.; Michello, F. “Measuring Efficiency in the Hotel Industry: A Stochastic Frontier Approach,”International Journal of Hospitality Management, 18, 1, 1999, pp. 45–57.CrossRefGoogle Scholar
  2. Anderson, R. I.; Lewis, D.; Parker, M. E. “Another Look at the Efficiency of Corporate Travel Management Departments,”Journal of Travel Research, 37, 3, 1999, pp. 267–72.Google Scholar
  3. Anderson, R. I.; Fok, R.; Scott, J. “Hotel Industry Efficiency: An Advanced Linear Programming Examination,”American Business Review, 18, 1, 2000, pp. 40–8.Google Scholar
  4. Barros, C. P. “A Stochastic Cost Frontier in the Portuguese Hotel Industry.”Tourism Economics (forthcoming), 2004.Google Scholar
  5. Baum, J. A. C.; Haveman, H. A. “Love Thy Neighbor? Differentiation and Agglomeration in the Manhattan Hotel Industry, 1898–1990,”Administrative Science Quarterly, 42, 2, 1997, pp. 304–38.Google Scholar
  6. Bell, R. A.; Morey, R. C. “Increasing the Efficiency of Corporate Travel Management Through Macro Benchmarking,”Journal of Travel Research, 33, 3, 1995, pp. 11–20.Google Scholar
  7. Bös, D.Pricing and Price Regulation: An Economic Theory for Public Enterprises and Public Utilities, 3rd ed., New York: Elsevier, 1994.Google Scholar
  8. Cano, M.; Drummond, S.; Miller, C.; Barclay, S. “Learning from Others: Benchmarking in Diverse Tourism Industries,”Total Quality Management, 12, 7/8, 2001, pp. 974–80.Google Scholar
  9. Caves, D. W.; Christensen, L. R.; Diewert, W. E. “The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity,”Econometrica, 50, 6, 1982, pp. 1393–414.Google Scholar
  10. Charnes, A.; Cooper, W. W.; Lewin, A. Y.; Seiford, L. M.Data Envelopment Analysis: Theory, Methodology, and Applications, Boston: Kluwer, 1994.Google Scholar
  11. Coelli, T. J.A Guide to DEAP Version 2.1: A Data Envelopment Analysis (Computer Program), Working Paper No. 8/96, Armidale, Australia: Centre for Efficiency and Productivity Analysis, University of New England, 1996.Google Scholar
  12. Coelli, T. J.; Rao, D. S. P.; Battese, G. E.An Introduction to Efficiency and Productivity Analysis, Boston: Kluwer, 1998.Google Scholar
  13. Cooper, W. W.; Seiford, L. M.; Tone, K.Data Envelopment Analysis, Boston: Kluwer, 2000.Google Scholar
  14. Chung, W.; Kalnins, A. “Agglomeration Effects and Performance: A Test of the Texas Lodging Industry,”Strategic Management Journal, 22, 10, 2001, pp. 969–88.CrossRefGoogle Scholar
  15. Dalbor, M. C.; Andrew, W. P. “Agency Problems and Hotel Appraisal Accuracy: An Exploratory Study,”International Journal of Hospitality Management, 19, 4, 2000, pp. 353–60.CrossRefGoogle Scholar
  16. Färe, R. S.; Grosskopf, S.; Lovel, C. A. K.Production Frontiers, New York: Cambridge University Press, 1994.Google Scholar
  17. Farrell, M. J. “The Measurement of Productive Efficiency,”Journal of the Royal Statistical Society, Series A, 120, 3, 1957, pp. 253–90.Google Scholar
  18. Financial Times: Survey on Portugal, October 21, 2002.Google Scholar
  19. Ingram, P.; Baum, J. A. C. “Chain Affiliation and the Failure of Manhattan Hotels, 1898–1980,”Administration Science Quarterly, 42, 1, 1997, pp. 68–102.Google Scholar
  20. Jensen, M. C.; Meckling, W. H. “Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure,”Journal of Financial Economics, 3, 4, 1976, pp. 305–60.Google Scholar
  21. Leibenstein, H. “Allocative Efficiencyvs. X-Efficiency,”American Economic Review, 56, 3, 1966, pp. 392–414.Google Scholar
  22. Malmquist, S. “Index Numbers and Indifference Surfaces,”Trabajos de Estadística, 4, 1953, pp. 209–42.Google Scholar
  23. Morey, R. C.; Dittman, D. A. “Evaluating a Hotel GM's Performance: A Case Study in Benchmarking,”Cornell Hotel Restaurant & Administration Quarterly, 36, 5, 1995, pp. 30–5.Google Scholar
  24. Olson, M.Logic of Collective Action; Public Goods and the Theory of Groups, Cambridge, MA: Harvard University Press, 1965, 1968, 1971.Google Scholar
  25. Thanassoulis, E.Introduction to the Theory and Application of Data Envelopment Analysis: A Foundation Text with Integrated Software, Norwell, MA: Kluwer, 2001.Google Scholar
  26. Williamson, O. E. “The Institutions of Governance,”American Economic Review, 88, 2, 1998, pp. 75–9.Google Scholar

Copyright information

© International Atlantic Economic Society 2004

Authors and Affiliations

  • Carlos P. Barros
    • 1
  • Fernando P. Alves
    • 1
  1. 1.Technical University of LisbonPortugal

Personalised recommendations