Evaluation of efficiency and ranking of Indian hotels and restaurants: a bootstrap DEA approach

Abstract

Purpose

The main purpose of this paper is to determine the bias-corrected efficiencies and rankings of the selected hotels and restaurants (H&Rs) in India.

Design/methodology/approach

The data for the Indian H&R sector are collected from the Prowess database. The bootstrap data envelopment analysis (DEA) based on a constant return to scale (CRS), variable return to scale-input oriented (VRS-IP) and variable return to scale-output oriented (VRS-OP) are applied on H&Rs to obtain the bias-corrected efficiencies.

Findings

It is found that relative efficiencies using basic DEA methods of all the 45 H&Rs of India are overestimated. These efficiencies are corrected using bias correction through bootstrap DEA methods. The bounds for the efficiencies of each H&R are computed using all the adopted methods. All H&Rs are ranked using bias-corrected efficiencies, and the linear trend between ranks suggests that the H&Rs are ranked almost similarly by all the adopted methods.

Practical implications

To improve efficiency, Indian H&R companies must rethink their personnel needs by enhancing their workforce management capabilities. The government needs to extend more support to this sector by introducing a liberal legislation framework and supporting infrastructure policies.

Originality/value

There is a paucity of studies on H&Rs in India. The current study focused on measuring bias-corrected efficiencies of the selected H&Rs of India. This study is one of the few initiatives to explore bias-corrected efficiencies extensively using the bootstrap DEA method.

Citation

Mahajan, V., Mogha, S.K. and Pannala, R.K.P.K. (2024), "Evaluation of efficiency and ranking of Indian hotels and restaurants: a bootstrap DEA approach", Benchmarking: An International Journal, Vol. 31 No. 1, pp. 186-198. https://doi.org/10.1108/BIJ-07-2021-0443