A Macro Analysis of Taiwan’s International Tourist Hotel Industry by Using the Sliding Window Method

This paper proposes an alternative data envelopment analysis for assessing the operational performance of 46 international tourist hotels (ITHs) in Taiwan over the period 1997-2002. This study is the first research that combines the discriminant power of a slack-based measure and the dynamic view of window analysis in applying DEA. It is shown that the trend of mean managerial efficiency is increasing, whereas the variation converges. Most ITHs operate at decreasing returns to scale, indicating that ITHs are facing a highly competitive environment. Taiwan’s 921 earthquake in 1999, the 911 incident in 2001, and the compulsory government subsidies all play key roles which affect the ITHs’ managerial performance for different operating characteristics in the short term. Results also indicate that differences in management style do have a very significant influence upon ITHs’ performance over time (1997-2002). Finally, the efficiency/profitability matrix of ITHs is further examined.