ICT Efficiency and Effectiveness in the Hotel Sector - A Three-Stage DEA Approach

A data envelopment analysis model is presented to investigate information and communication technology's (ICT) efficiency and effectiveness in the Austrian hotel sector. The proposed three-stage procedure allows to evaluate both, allocative efficiency of expenses devoted to ICTS, the effectiveness of ICTS to maximise the level of output, and finally, to validate the model by relating total output to total input. In order to obtain a most comprehensive picture subjective assessments about adoption conditions and efficiency gains induced by ICTS are additionally considered. Data is gathered via online surveys in 2008 by addressing the managers of 3,600 Austrian hotels. Results show that the impact of ICTS on productivity gains is positive and significant. However, results also suggest that intermediate ICT adopters show lowest allocative efficiency compared to heavy and weak ICT adopters. Similarly, ICTS' effectiveness in generating hotel revenues is proved only for heavy and weak ICT adopters.