A Dynamic Data Envelopment Analysis to Efficiency Benchmarking of the Chinese Hotel Industry

This paper analyzes the technical efficiency of the Chinese hotel industry using the data envelopment analysis (DEA) for the period between 2001 and 2006. The empirical findings indicate that the Chinese hotel industry is approaching technically efficient operation in general during the period, while a major dip is observed in 2003 when the Severe Acute Respiratory Syndrome (SARS) outbreak devastated Asian tourism. A distinction of technical efficiency trends is found between regions, and the 31 province-level regions in China are classified into four quadrants based on different levels of efficiency and fluctuation over time. The strategy implications for hoteliers, government decision makers and destination management organizations are discussed.