Hotel Efficiency Measurement in The Most Economically Sustainable Regions by Using Data Envelopment Analysis

In the past decade, sustainability trend has been increasingly applied by most of the countries around the world. As a result, all countries in the United Nations have decided to formulate sustainability into a framework by introducing sustainable development goals (SDG) in 2015. SDG consists of 17 goals to cover all the aspects of the sustainability such as environmental, social and economic sustainability. These goals are not only a great instruction for countries to apply sustainability, also it can help countries to evaluate and estimate their successfulness of sustainability in different organizations and businesses. SDG 8 (decent work and economic growth) as one of the most important indicators , shows the successfulness of each country to achieve a sustainable economy. Since creation of SDG concept, there were many studies that they measured successfulness of businesses efficiencies according to these goals. However, there are few studies that they evaluate hotel industry’s financial efficiency in parallel of SDG 8. As a result, this thesis is going to investigate parallel success of efficient countries in economic sustainability, and financial efficiency of their hotel industry. To measure the financial efficiency, this study applied Data Envelopment Analysis (DEA) to benchmark countries in 2017 and 2018. “Number of rooms” and “Number of employees” as inputs and “RevPAR” and “Occupancy rate” as outputs have been selected to analyze hotel’s financial efficiencies. The analysis of this study showed that 5 countries (Estonia, Netherlands, New Zealand, Switzerland and United States) were fully financial efficient in hotel industry. Based on the study’s result, recommendations for policy makers and possible future studies have been illustrated accordingly.