ABSTRACT
Existing research on hotel labor productivity resolves to calculate various single output-input ratios. The study first examined labor productivity in the three hotel segments by using two inputs and one output, allowing the DEA process to be visualized graphically in two-dimensional settings. DEA can measure labor productivity at the individual hotel level by simultaneously incorporating multiple inputs and outputs. Multiple outputs should be more desirable in empirical analysis because most hotels have several goals or objectives to be assessed, although the multiple input-output DEA analysis is difficult to be visualized graphically. The purpose of this study is to propose Data Envelopment Analysis (DEA) as an effective tool to measure labor productivity of hotels. Using the data collected from the hotels in the State of California, the study applies DEA to calculate the labor productivity score of each sampled hotel. The internal and external determinants of labor productivity are examined.
