ABSTRACT
Low productivity within the hospitality industry has been a major concern, but this situation is unlikely to improve without a general change in the way productivity is measured and managed. This chapter illustrates the value of stepwise Data Envelopment Analysis (DEA) for measuring and benchmarking hotel productivity. The issues regarding productivity measurement as well as the advantages of using DEA for measuring productivity are analysed. However, the paper extends current DEA applications by developing a stepwise approach to DEA. The latter technique combines correlation and DEA analysis for developing robust DEA models and its advantages are illustrated by applying it in a dataset of three star hotels in the UK. Respondents consist a sample representing the diversity of the three star hotel sector in the UK. Statistical tests were conducted for investigating the productivity impact of the following factors: hotel location; hotel design; ownership structure; management arrangement; market segments served; repeat customers; distribution channels used.
