Improving performance measurement and benchmarking in the accommodation sector

Abstract

Purpose

The aims of the paper are to evaluate the relevance of environmental factors (seasonality, size and quality) on hotels’ performance and benchmarks; to measure the bias in efficiency resulting from a failure to control for these sources of heterogeneity; and to propose some managerial policies to handle for environmental heterogeneity.

Design/methodology/approach

The sample is constituted by 2,705 hotels operating in Emilia-Romagna (Italy). The metafrontier approach is used to identify the different production processes and measure technical efficiency scores.

Findings

Different production processes exist among accommodation firms due to environmental features; not considering heterogeneity in technological sets produces high levels of bias in the efficiency measurement, albeit the ranking of hotels tends to be fairly consistent; the star rating is the primary source of efficiency bias followed by seasonality, while size has a minor impact.

Research limitations/implications

Future research could be directed to analyse the relevance of environmental heterogeneity in other areas; study the dynamics; investigate agglomeration effects; and use other methodological tools.

Practical implications

The analysis proposes new managerial interventions: targeted strategies to different groups; creation of networks of enterprises, clustered mainly in respect to size for highly rated enterprises and seasonality for low-rated enterprises; and incentives to annual hotels and raise in the product quality.

Originality/value

This paper simultaneously considers several environmental factors affecting heterogeneity in hotel production processes; investigates the effect of heterogeneity on either the efficiency scores or the ranking of hotels; and focuses on micro, low-quality or seasonal hotels.

Citation

Bernini, C. and Guizzardi, A. (2015), "Improving performance measurement and benchmarking in the accommodation sector", International Journal of Contemporary Hospitality Management, Vol. 27 No. 5, pp. 980-1002. https://doi.org/10.1108/IJCHM-12-2013-0549