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

Abstract

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.