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Resource heterogeneity is a key aspect of one of the most important theories of strategic management: the resource-based view of the firm. This theory suggests that the performance effects of a firm's strategy depend on the firm's individual resources and capabilities and the setting within which it is operating. In this article, we argue that the current methods for measuring hotel performance and its determinants may be inconsistent with this theory. To measure efficiency, hotels should be viewed as heterogeneous firms, and the relationships between determinants and performance must be assessed for each individual hotel rather than as an average across hotels. Accordingly, we use a random-effect Bayesian stochastic frontier model to estimate the profit frontier and the effect function of the inefficiency for each hotel. The results indicate that hotels tend to choose strategies based on the heterogeneous resources that maximize their performance in their individual statuses. [ABSTRACT FROM AUTHOR]

Hotel efficiency has traditionally been estimated assuming that all hotels use the same production technology. However, in practice, hotels have different technologies, and ignoring this reality can lead to an overestimation of inefficiency in the sector. This article relaxes this assumption and estimates efficiency in the hotel industry using a stochastic frontier model with random coefficients. This methodology allows us to separate firm-specific inefficiencies from potential technological heterogeneity across hotels. The empirical results indicate that the estimated efficiencies differ between the random coefficients model and the fixed coefficients model. These findings support our thesis of technological heterogeneity across hotels. [ABSTRACT FROM AUTHOR]

In the last decade, all-inclusive packages have had an extraordinary boom in one of the most popular sun and beach tourism destinations in Europe, the Canary Islands. This fact reinvigorated the debate on potential benefits and negative effects on the local economy. However, there is no empirical evidence of the impact that all-inclusive packages may have on the efficiency in the hotel industry. This study assessed the effects of all-inclusive packages on cost and profit efficiency using the stochastic frontier approach and the model proposed by Battese and Coelli [(1995). A model for technical inefficiency effects in a stochastic frontier production function for panel data. Empirical Economics, 20(2), 325-332] in a sample composed of 102 hotels of the Canary Islands from 2008 to 2014. The empirical results revealed that the hotels that offered all-inclusive packages exhibited lower efficiency levels than those hotels that did not provide this service. These results have important implications for both public policies and hotel management. [ABSTRACT FROM AUTHOR]

The present study measured profit efficiency and its determinants in the hotel sector in Spain from 2010 to 2014, using a Bayesian stochastic frontier approach. This model provides estimates of efficiency and more accurate confidence intervals than the traditional frequentist approach. The results revealed that the hotels are operating with significant profit inefficiencies. These inefficiencies are significantly affected by size, location, occupancy rate by region, customer satisfaction, and whether the hotel is affiliated or independent. Finally, the study points out the strategic implications of these findings, to improve the efficiency of the hotels. [ABSTRACT FROM AUTHOR]

Inefficiency in the hotel sector is normally estimated through cost and scale efficiencies. This paper estimates hotel profit efficiency and its determinants employing a stochastic frontier profit function and the inefficiency effects function. The key advantage of this methodology is its ability to estimate efficiency for each hotel and the factors that explain differences in efficiency in a single-stage sampling procedure. The sample consists of 231 hotels in Spain in the period 2008-2012. Empirical evidence shows that the average level of profit efficiency is 45.85% and that age, labour productivity and location are determinants of this efficiency. Policy implications for the improvement of less efficient hotels are noted. [ABSTRACT FROM AUTHOR]

This paper provides empirical evidence on the impact of output quality on hotel efficiency. It demonstrates how ignoring quality can lead to erroneous efficiency estimates. The study uses stochastic frontier methodology and the model proposed by Battese and Coelli (1995) to estimate the efficiency of 838 hotels in Spain in the period 2009–2013. The key advantage of this methodology is its ability to estimate efficiency and identify factors that explain differences in efficiency in a single-stage sampling procedure. Estimates of cost efficiency, which only include the costs of higher quality, are compared to those of profit efficiency, which not only consider costs but also the revenues generated by higher quality. Results show that quality has a negative impact on cost efficiency and a positive one on profit efficiency. Thus, hotel management should implement strategies that increase the value of their services as a way to achieve sustainable competitive advantages. [ABSTRACT FROM AUTHOR]

This study employs a stochastic frontier model to estimate cost efficiency and its determinants in the hotel industry in Spain between 2008 and 2012. Measuring cost efficiency provides useful information on the performance of hotels to management, shareholders and, in general, to all stakeholders. Cost control is an issue managers are particularly concerned about, as it gives a competitive advantage that allows hotels to perform better. The results indicate that the inefficiency in average costs for the sample considered is 32.44% and is time invariant. The results also show that labour productivity, the accumulation of knowledge and location are factors that largely determine the differences in efficiency between hotels. These findings have important implications for public policymakers and hotel management, specifically, policies aimed at improving the skills of hotels' human resources should be encouraged. Likewise, both location and the accumulation of knowledge are strategic resources that hotel management must include in their competitive strategies to increase efficiency. [ABSTRACT FROM AUTHOR]