Operational performance and benchmarking: A case study of international tourist hotels in Taipei

Transcription

1 African Journal of Buine Manageent Vol 5(22), pp , 30 Septeber, 2011 Available online at DOI: /AJBM11038 ISSN Acadeic Journal Full Length Reearch Paper Operational perforance and bencharking: A cae tudy of international tourit hotel in Taipei Jie Wu 1 * and Haiyan Song 2 1 School of Manageent, Univerity of Science and Technology of China, Hefei, People Republic of China 2 School of Hotel and Touri Manageent, The Hong Kong Polytechnic Univerity, Hong Kong SAR, People Republic of China Accepted 27 May, 2011 Operational perforance evaluation and proce iproveent in hotel have been the focu of everal tudie, a nuber of which have ued Data nvelopent Analyi (DA) to evaluate the operational perforance of hotel in different detination Thi tudy et out to evaluate the operational efficiency of twenty-three tourit hotel in Taipei over five year (2003 to 2007) uing DA odel and the cro-efficiency evaluation ethod fficiency eaure are baed on four input eaure: the total nuber of hotel roo, the total nuber of eployee, food and beverage (F&B) capacity, and total operating cot The three output eaure are guet roo revenue, F&B revenue, and other revenue The efficiency core derived fro the DA odel are ubject to clutering analyi to entify benchark for efficiency iproveent in poorly perforing hotel The contribution and anagerial iplication of the tudy are dicued Key wo: Data envelopent analyi (DA), cluter analyi, hotel, efficiency analyi, bencharking INTRODUCTION Hotel operational perforance i the priary concern of hotel operator Conequently, increaing nuber of tudie have exained the way in which hotel operational perforance can be appropriately eaured and aeed with a view to proving ueful inforation for effective deciion-aking by hotel anageent Data nvelopent Analyi (DA), which ha been ued to eaure the relative efficiency (perforance) of deciion aking unit () on the bai of their ultiple input and output, ha becoe one of the ot frequently ued ethod for aeing hotel operational perforance A ajor advantage of DA i that it doe not require any auption about the functional for of the odel that underpin the relationhip between the input and output variable (Hwang and Chang, 2003) It ha becoe a popular efficiency evaluation tool and ha been applied in area uch a bank branch activitie (Chen and Yeh, 1998), port capacity (Roll and Hayuth, 1993), nation *Correponding author -ail: jacky012@ailutceducn Tel: Fax: operational perforance at the Olypic (Lozano, Villa and Corté, 2002), etc However, a Table 1 how, depite the increae in reearch on hotel operational perforance, very few tudie have invetigated the bencharking of hotel, which i iportant to enure their continuing copetitivene In thi paper, we propoe an effective ethod for evaluating hotel operational perforance and entifying ueful benchark for efficiency iproveent in le efficient hotel The cro-efficiency DA odel i ued to exaine the efficiency (perforance) of the hotel, and the cro-efficiency core of hotel are calculated Cluter analyi i then ued to elect the operational perforance target that will erve a benchark for poorly perforing hotel Hotel with inherently iilar input and output are claified into the ae cluter, and the hotel with the highet core in a given cluter i conered to be the priary benchark for efficiency iproveent for the other hotel in the cluter Further dicuion equentially preent the background to the tudy and a review of the literature, followed by the theoretical fraework, data, reult and concluion

2 9456 Afr J Bu Manage Table 1 Publihed tudie on the application of DA to hotel Literature Model Saple Input Output Morey and Dittan (1995) DA 54 US hotel Salarie for ajor roo activitie Other roo-related expene nergy cot Salarie for property, operation and aintenance (POM) other POM Salarie for variable advertiing Other variable advertiing expene Fixed advertiing expene Salarie for adinitrative and general Other adinitrative and general expene Total roo revenue Facilitie atifaction index Service atifaction index Anderon, Lewi and Parker (1999) DA and tochatic frontier 31 corporate travel departent Total air expene Hotel expene Car expene Labor expene Hour expene Part-tie labor Fee expene Technology cot Building and occupancy expene Nuber of trip Anderon, Fok and Scott (2000) DA (technical efficiency and allocative efficiency) 48 US hotel Full-tie equivalent eployee The nuber of roo Total gaing-related expene Total food and leverage expene Other expene Total revenue Other revenue Hwang and Chang (2003) DA-CCR odel, uper efficiency odel and Malquit 45 Taiwan international hotel Nuber of full-tie eployee Guet roo Total area of eal departent Operating expene Roo revenue Food and beverage revenue Other revenue Wang, Huang, and Shang (2006) DA (overall efficiency, allocative efficiency, cale efficiency, technical efficiency, and pure technical efficiency) 49 Taiwan international hotel Nuber of full-tie eployee in roo departent Nuber of roo Area of F&B Nuber of full-tie eployee in F&B Revenue fro roo departent Revenue fro F&B departent Other revenue Keh, Chu and Xu (2006) Three-tage DA odel Aia-Pacific hotel chain Total expene Nuber of roo Roo revenue F&B revenue

3 Wu and Song 9457 Table 1 Contd Tai (2009) Cro-efficiency DA odel Star-rated hotel in 31 Chinee province Nuber of hotel The aount of fixed aet NUMBR of eployee receiving training Total revenue Occupancy percentage Yu and Lee (2009) Hyperbolic network DA odel 57 Taiwan international hotel Nuber of eployee in departent roo Nuber of eployee in departent F&B Nuber of guet roo Area of departent F&B Total operating expene Total revenue of F&B Total revenue of roo Other revenue Hieh and Lin (2010) Network DA odel 57 Taiwan international hotel Cot of accoodation departent ployee of accoodation Cot of catering departent ployee of catering Revenue of the accoodation departent Revenue of the catering departent Cheng, Lu and Chung (2010) Slack-baed eaure (SBM) DA odel 34 Taiwan international hotel Nuber of guet roo Nuber of eployee Area of catering departent total operating expene catering expene Total operating revenue Average occupancy rate Average roo rate Average production value per eployee Occupancy revenue Catering revenue Chen, Hu and Liao (2010) CCR and Tobit analyi All the Taiwan international hotel ince 1996 to 2007 Nuber of guet roo Nuber of eployee Area of catering departen Total revenue of F&B Total revenue of roo Other revenue Hu, Chiu, Shieh and Huang (2010) SFA and DA 66 Taiwan international hotel Price of labor Price of other operation Price of F&B Roo revenue Other operation revenue F&B revenue LITRATUR RVIW Although it i iportant for hotel to iprove their operational efficiency, the iue of efficiency eaureent and iproveent have attracted little reearch attention The literature on hotel efficiency, and in particular the eaureent of efficiency and bencharking, i cant An overview of the literature related to thee area i further proved The uary of previou tudie applying DA technique, whether uing the original or derivative odel, to eaure hotel operational perforance i preented in Table 1 fficiency analyi of hotel A nuber of tudie have looked at hotelefficiency iue Aong the earliet i that of Baker and Riley (1994), who ued financial ratio to analyze the operational perforance of the lodging indutry Wijeyinghe (1993) uggeted the ue of break-even analyi to dicern the effectivene of touri anage-ent, and Brotherton and Mooney (1992) and Donaghy, McMahon and McDowell (1995) applied yield anage-ent to analyze hotel anageent efficiency

4 9458 Afr J Bu Manage Since Morey and Dittan (1995) firt ued DA to eaure the operational perforance of hotel and proved a ueful reference for input/output variable election, everal cholar have ued DA to tudy hotel operational perforance Thi ugget that DA ha only recently been recognized a a ueful tool by reearcher in the area of hopitality anageent The focu of ot of thee publihed tudie i on the hotel indutrie of Taiwan, the United State, and Portugal Several tudie have exained hotel operational perforance uing data fro hotel in Taipei, Taiwan Taipei hotel data are often ued becaue reearcher want to copare the operational perforance of different DA odel uing the ae dataet, and becaue the data are ade publicly available by the Taiwan Touri Bureau Since the lifting of artial law in 1985, international touri in Taiwan ha grown ubtantially, leading to a harp increae in the deand for international tourit hotel The rap increae in international tourit hotel ha intenified the copetition in the hotel ector in Taiwan Hotel ut aggreively copete through brand developent, increaed arketing effort, and iproved ervice quality to tay in the arket In forulating copetition trategie, a ajor proble i how to benchark the efficiency of a hotel againt indutry tanda, and it i here that ethod uch a DA coe into play, having been applied in everal tudie to ae the operational perforance of the international touri hotel in Taiwan The firt uch tudy wa that of Taur (2001), who evaluated the operational efficiency of fiftythree international tourit hotel in Taiwan during the year of 1996 through 1998 Hwang and Chang (2003) then looked at the efficiency change in fourty-five Taiwanee hotel fro 1994 to 1998, and Chiang et al (2004) eaured operational perforance of three type of international tourit hotel (ITH), naely, independently owned and operated hotel, franchied hotel, and anageent-contracted hotel Chiang (2006) further exained the operational perforance of 24 ITH in Taipei accoing to their operational ode, and Wang, Huang and Shang (2006) evaluated the relative cot efficiency of forty-nine ITH in Taiwan Yu and Lee (2009) copoed a hyperbolic network DA odel to eaure the operational perforance of fifty-even ITH in Taiwan by diving the hotel operation into production proce and arketing proce, while Hieh and Lin (2010) propoed another network DA odel to evaluate thee ae hotel operational perforance by eparating hotel activitie into accoodation and catering departent Cheng et al (2010) iproved the lack-baed eaure (SBM) of efficiency in context-dependent DA and applied it to eaure the operational perfor-ance of thirty-four elected ITH in Taiwan in oer to prove inight on copetitive advantage In oer to deal with poible environent variable in the DA odel, Chen et al (2010) copoed a Tobit analyi and Hu et al (2010) propoed a SFA odel for evaluating the operational perforance of ITH in Taiwan Other tudie have ued DA to copare the productivity of hotel over different period or efficiency change over tie John et al (1997) aeed the productivity of fifteen hotel over a twelve-onth period, and Hwang and Chang (2003) applied DA together with the Malquit index to entify the efficiency change in forty-five Taiwan international tourit hotel over the period of 1994 to 1998 Again, uing DA, Brown and Ragdale (2002) evaluated hotel efficiency fro the point of view of cutoer perception, which wa not conered in the other tudie Thee tudie indicate that DA ha becoe an iportant analytical tool in aeing hotel operational perforance Thi paper extend thi line of reearch by exaining the bencharking of Taipei international tourit hotel over the period of 2003 to 2007 uing a new variant of DA known a the cro-efficiency approach Bencharking of hotel Bencharking i a technique that wa originally propoed by the Japanee anufacturing ector and ubequently popularized by international buine practitioner (Cap, 1989) The popularity of bencharking ha increaed over the pat two decade Variou tool can be eployed to carry out a bencharking exercie, including gap analyi and the hierarchy proce uing the aturity atrix (yrich, 1991; Kleinhan et al, 1995) Although tatitical ethod can alo be utilized for bencharking purpoe (Bluberg, 1994; Schefcyzk, 1993; Moeng, 1995), their ue i liited to the iultaneou exaination of the correlation or central tendency of the input and output variable; they are not uitable for coparing the operational perforance of indivual buine againt bet practice Regreion odel can be ued to entify iportant relationhip and gap, but are unable to ugget the ean by which any efficiency gap can be cloed DA wa ued in partner election for bencharking by Collier and Storbeck (1993) in the telecounication indutry, and by Bell and Morey (1995) to invetigate the efficiency of corporate travel anageent through acro bencharking DA ha alo been ued for bencharking in the banking and finance indutry by Barr and Seifo (1994) and in the grocery indutry by Athanaopoulo and Ballantine (1995) However, the bencharking of hotel uing DA ha attracted little reearch attention The few exception are the tudy of Morey and Dittan (1995), which evaluated the operational perforance of fifty-four owner-anaged hotel and proved benchark for le efficient hotel to atch Sigala (2003b) exained bet practice in the online arketing trategie of Greek hotel baed on DA and ade uggetion for the developent of ore

5 Wu and Song 9459 effective trategie The iue of bencharking wa alo touched on in the tudie of Chiang, Tai and Wang (2004), Barro (2005), Chiang (2006) and Yu and Lee (2009) Although thee tudie conered different type of hotel, the technique ued to generate benchark for poorly perforing hotel are the ae, in that, they are a linear cobination of the hotel in a reference et that erve a a reference for inefficient hotel However, thi traditional for of bencharking analyi uing DA ha a nuber of liitation Firt, the inefficient and their correponding benchark ay not be inherently iilar, which ay reult in inappropriate target for iproveent being et Second, in ot cae an inefficient ay have ultiple benchark a poible target for iproveent Thi, the cobination of reult in a virtual that doe not really exit, which ake iproveent in line with the benchark difficult It would greatly benefit hotel efficiency analyi if we could overcoe thee liitation uing a benchark that cloely atche the inherent capabilitie of an inefficient MTHODOLOGY A uggeted by Ala (2011) that a reearch ha to follow a ditinct way in nature to carry it out, thu the cro-efficiency evaluation ethod i an extenion of DA that entifie the bet perforing and rank the uing cro-efficiency core that relate to all of the in the odel (Sexton et al, 1986) The ain ea of cro-efficiency evaluation i to ue DA in a peer evaluation ode, rather than in a elf-evaluation ode Cro-efficiency evaluation ha been applied in variou etting, uch a efficiency evaluation of nuring hoe (Sexton et al, 1986), R and D project election (Oral et al, 1991), and preference voting (Green et al, 1996) Cro efficiency The conventional noenclature of DA i adopted with the auption of n that are to be evaluated in ter of input and output We denote the ith input and rth output for j ( j 1,2,, n) x ij y a (i = 1,, ) and rj (r = 1,, ), repectively The efficiency rating for any given d can be coputed uing the CCR odel (Charne et al, 1978), a follow: ax t r1 i1 y x ij i1 r1 x y 0, i 1,2,, 0, r 1,2,, 1 rj 0, j 1,2, n (1) d For each (d = 1,, n) under evaluation, we obtain a et of * * * * optial weight (ultiplier) 1 d,, d, 1 d,, d Uing thi j et, the d-cro efficiency for any calculated a: * yrj r1 dj, d, j 1,2,, n * x i1 ij (2) (j=1,, n) i then A hown in Table 2, when we ove along the dth row of the croefficiency atrix (CM) of cro efficiencie, each eleent dj i the efficiency that d j acco to in line with the coputed weighting chee decribed The leading diagonal i a pecial cae in which rate itelf ach of the colun of the CM in Table 2 i then averaged to obtain a ean cro-efficiency eaure for each For 1 n j dj n d 1 d ( j 1,, n) ( d 1,, n) j dj, the average of all i:, (3) which can be ued a a new efficiency eaure for j and i referred to a the cro-efficiency core for j In general, the weight of the input and output in odel (1) ay not be unique Thu, the evaluation of a in relation to other ay depend on the firt of the any alternative optial olution reached To chooe the preferred olution aong a et of ultiple olution, Sexton et al (1986) and Doyle and Green (1994) uggeted uing the aggreive and benevolent cro-evaluation approach A cro-evaluation i aggreive and benevolent in the ene that it elect a et of weight that not only axiize the efficiency of the particular under evaluation, but alo iniize or axiize the efficiencie of all of the other in the ae anner Where the relative doinance of i to be evaluated, the aggreive forulation i ore appropriate The correponding aggreive forulation of (1) developed by Doyle and Green (1994) i: in ( y ) r1 t x y 0, j d ij rj i1 r1 i1 jd rj ( x ) 1 jd ij y x 0 dd r1 i1 0, i 1,, 0, r 1,, (4)

6 9460 Afr J Bu Manage Table 2 A generalized cro-efficiency atrix (CM) Rated Rating n n Mean n1 n2 n n 2n 3n nn n where θ dd i the efficiency of d obtained fro (1) The benevolent forulation i ubject to the ae et of contraint, except that it i the objective function that i axiized Bencharking In traditional DA, a linear cobination of the in the reference et i the target that an inefficient ue to becoe efficient Accoing to Doyle and Green (1994), a difficulty with thee conventional reference et i that an inefficient and it reference et ay not be inherently iilar in their practice, and it i therefore poible that the reference target are unattainable goal for the inefficient Cluter analyi, principal coponent analyi, and ultienional caling have all been ued in the literature to claify into iilar group or cluter to avo thi proble Cluter analyi i ued in thi tudy to entify benchark for the inefficient Coputing the correlation coefficient between a pair of colun in a CM tell u how iilar are accoing to the appraial of their peer A high poitive correlation coefficient indicate that two are inherently iilar with repect to their input and output, which ean that they will diplay a iilar operational perforance when evaluated againt the optial weight of other Thu, uing thee correlation coefficient a the eleent in a reeblance atrix and carrying out a clutering analyi yield cluter with inherently iilar The with the highet average cro efficiency in a given cluter can then be ued a the priary benchark for iproveent for the other in that cluter RSULTS AND DISCUSSION Here, we apply the approach preented in the previou dicuion to analyze the operational perforance and benchark of 21 international tourit hotel in Taipei during the period of 2003 to 2007 Data decription The aple ize i deterined by the data availability The data wa obtained fro The Operating Report of International Hotel in Taiwan, which i publihed annually by the Taiwan Touri Bureau The Taiwan Touri Bureau rank hotel by plu, and all of the hotel included in our aple are either four- or five-plu tourit hotel A lit of the hotel in the aple i given in Table 3 In line with previou tudie and the data availability, four input variable and three output variable are included in the epirical analyi The input variable are the total nuber of hotel roo ( x 1 ); the total nuber of eployee ( x 2 ); food and beverage (F&B) capacity ( x 3 ) a eaured by the total floor area utilized by all of the F&B outlet within the hotel; and total operating cot ( x 4 ), which include operational cot, advertiing cot, and alarie The output variable include guet roo revenue ( y 1 ), F&B revenue ( y 2 ), and other revenue ( y 3 ) fficiency analyi The reult of the CCR and average aggreive croefficiency core coputed uing the aggreive croevaluation approach in Doyle and Green (1994) are hown in Table 4 A total of thirteen hotel are conered to be technically efficient (a CCR efficiency core of 1) in at leat one out of the five year under coneration Five hotel are found to be efficient for all the five year Brother Hotel (BRO), United Hotel (UNI), Grand Hyatt Taipei (GRH), Grand Foroa Regent Taipei (GFR) and the Sherwood Taipei (SHW) The average efficiencie accoing to the CCR odel are 08831, 09022, 09104, and for the year 2003 to 2007, repectively Thee reult indicate that there wa an upwa trend in the average efficiency fro 2003 to 2006 and then a light decline in 2007, with only eight hotel perforing efficiently in 2003 but increaing to twelve efficient hotel in 2007 Thi i likely due to the fact that ainland China, Taiwan, and Hong Kong uffered fro the SARS outbreak in 2003, which negatively affected

7 Wu and Song 9461 Table 3 Lit of hotel Hotel abbreviation Hotel 1 GRA The Grand Hotel 2 AMB The Abaador Hotel 3 IMP Iperial Hotel Taipei 4 GLP Gloria Prince Hotel 5 MP peror Hotel 6 RIV Riverview Taipei 7 CAP Caear Park Taipei 8 GOC Golden China Hotel 9 SAW San Want Hotel 10 BRO Brother Hotel 11 SAN Santo Hotel 12 LAN The Landi Taipei Hotel 13 UNI United Hotel 14 SH Sheraton Taipei Hotel 15 ROY Hotel Royal Taipei 16 HOP Howa Plaza Hotel Taipei 17 GRH Grand Hyatt Taipei 18 GFR Grand Foroa Regent Taipei 19 SHW The Sherwood Taipei 20 FP Far atern Plaza Hotel Taipei 21 WS The Wetin Taipei Table 4 CCR and aggreive cro-efficiency core of the hotel for all year Hotel C A C A C A C A C A 1 GRA AMB IMP GLP MP RIV CAP GOC SAW BRO SAN LAN UNI SH ROY HOP GRH GFR SHW FP WS Average C : CCR efficiency; A : aggreive cro-efficiency

8 9462 Afr J Bu Manage A B C D F G H I J K Figure 1 Dendrogra of the hotel cluter for all year deand for hotel roo in thee detination A the traditional CCR DA odel fail to differentiate aong efficient hotel, we utilize the cro-efficiency analyi (Doyle and Green, 1994) to rank the operational perforance of hotel in each of the five year Uing the aggreive cro-efficiency evaluation odel, we find that the Grand Foroa Regent Taipei (GFR) and the Sherwood Taipei (SHW) perfored conitently well, with the forer ranking firt in all five of the year Their anager and eployee hould be rewaed becaue of their table good-perforance and be encouraged to achieve a higher level of operational perforance The leat efficient hotel include The Grand Hotel (GRA), Riverview Taipei (RIV), Santo Hotel (SAN), Iperial Hotel Taipei (IMP) and peror Hotel (MP) (achieving the lowet aggreive cro-efficiency core) Thi i a warning ign for anageent about the low uage of exiting input variable elected in our tudy A erie of eaure hould be taken for poible iproveent, uch a onitoring eployee work procedure, taffing level, and budget/expene control After calculating the efficiency core, we can then group the hotel accoing to input-out configuration uing cluter analyi Benchark analyi Although the CCR odel or odel (1) can prove benchark for inefficient hotel, it ha certain liitation A ha been explained, the ain iue i that an inefficient hotel and it benchark ay not be inherently iilar in their practice (Doyle and Green, 1994) To entify appropriate benchark for the poorly perforing hotel a a bai for efficiency iproveent, we firt copute the correlation coefficient between a pair of colun in the cro-efficiency atrix, which tell u how iilar the two are a deterined by their peer We then ue thee correlation coefficient a the eleent in a reeblance atrix and carry out cluter analyi baed on a within-group linkage ethod The reulting tree i then truncated to obtain a reaonable level of clutering aong the hotel Thi for of cluter analyi i known a hierarchical clutering, and the average linkage ethod i utilized to derive the cluter (Appendix 1) Figure 1 depict the dendrogra of the cluter analyi of the hotel over the five-year period, and the correponding tabulated cluter are hown in Table 5 Figure 1 and Table 5 how that a total of ten cluter, labeled A to K, are entified The bet perforer in each of the cluter can be viewed by the other hotel in the cluter a the priary benchark for their own efficiency iproveent For exaple, in cluter D, GFR 2003, which ha an average cro-efficiency core of 08879, hould be

9 Wu and Song 9463 Table 5 Benchark and cluter of the hotel for all year Cluter A Cluter B Cluter C Cluter D Cluter Cluter F Cluter G Cluter H Cluter I Cluter J Cluter K AMB AMB 03 ROY GFR 03 SHW 03 GLP 06 RIV MP GRA CAP 05 UNI BRO AMB 04 GLP (08879) SHW 04 (04969) SAN 05 UNI 06 IMP (05544) CAP 04 LAN (07229) SH 05 GFR (08198) GLP 07 SAN 06 (04268) GOC 03 CAP (06556) HOP BRO WS FP 03 SHW (03621) UNI 07 GOC 04 UNI 05 SAW SAW 03 LAN GRH SAN 07 (05119) SH HOP 03 HOP 04 FP 04 GOC FP (06739) SH WS 05 SAW 04 RIV WS 06 CAP 03 SAN (07095) WS 07 utilized by GFR 2004, GFR 2005, GFR 2006, GFR 2007 and FP 2003 a a benchark for iproveent A an ae, anageent of other ITH hould oberve the operational practice of GFR, epecially in the hotel ot efficient year of 2003, and ipleent thee practice in oer to becoe ore efficient It i event that in oe of the cluter, uch a cluter C, the benchark hotel itelf i not a very good perforer It o happen that all of the hotel in Cluter C are relatively poor perforer, and thu the ot appropriate benchark for iproving their current practice i HOP 2004 Although the benchark hotel operational perforance i not very good, it i till iportant for the hotel in thi cluter to utilize thi hotel a a potential benchark for achieving an attainable target Further, it i ore reaonable and valuable for the anageent to et realitic goal rather than radical one, a uch iproveent are ore eaily achieved in an increental anner The reult for other cluter can be interpreted in the ae anner The dynaic of the benchark ay alo be exained Although the benchark and cluter of certain hotel change ignificantly over the fiveyear period (for exaple, SAW, HOP, CAP, SH and FP, which appear in three different cluter), they reain relatively table for other hotel (for exaple, MP, ROY, GRA, and SHW appear in only one cluter) A poible reaon for the dratic change in oe of the hotel ay be due to policy and operational change ade over the aple period An iportant anagerial iplication of thi i that thee hotel can learn bet practice fro a cobination of benchark hotel over tie to iprove their operational perforance The dynaic nature of the benchark alo ean that new and ore appropriate benchark ay eerge over tie becaue of operational change ade by the benchark hotel theelve The ore dynaic the benchark environent for a given hotel, the ore difficult it i to deterine a good benchark In general, the hotel that eaily iprove their efficiency are thoe with table benchark and that tend to tay in the ae cluter over tie Hotel that eek to ipleent change ay find their benchark alo triving for change, which ean that inefficient hotel ay need to chooe ore than one benchark Inefficient hotel alo need to oberve the direction in which their benchark are oving over tie o that they can dece the bet reource utilization trategy to iprove efficiency with inial input change Thi iue of dynaic benchark ut be carefully evaluated by inefficient hotel, epecially a oe of the change ade to iprove operational and anagerial efficiency ay take uch longer then one or two year CONCLUDING RMARKS In thi paper, we preented a ethodology for operational perforance evaluation and proce iproveent in ajor international tourit hotel in Taipei We utilized a cobination of ulti-factor efficiency odel, aggreive cro-efficiency DA, and clutering ethod to evaluate the operational perforance of elected hotel over the period of 2003 to 2007 and to entify appropriate benchark for efficiency iproveent in poorly perforing hotel The anagerial iplication for iproving the operational efficiency of

10 9464 Afr J Bu Manage hotel through bencharking are alo dicued ACKNOWLDGMNTS Thi reearch wa upported by grant fro the National Natural Science Fund of China Group (No and ), Reearch Fund for the Doctoral Progra of Higher ducation of China for New Teacher (No ), Reearch Fund for the xcellent Youth Scholar of Higher School of Anhui Province of China (No2010SQRW001ZD), Social Science Reearch Fund for Higher School of Anhui Province of China (No 2010SK004), The Fundaental Reearch Fund for the Central Univeritie (No WK ) and The Hong Kong Polytechnic Univerity Reearch Grant No1-BB61 RFRNCS Ala GM (2011) A further editorial gueline for writing anucript in the field of ocial cience: A pecial perpective for African Journal of Buine Manageent (AJBM) Afr J Bu Manage, 5(1): editorial Anderon RI, Lewi D, Parker M (1999) Another look at the efficiency of corporate travel anageent departent J Travel Re, 37(3): Anderon RI, Fok R, Scott J (2000) Hotel indutry efficiency: An advanced linear prograing 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11 Wu and Song 9465 APPNDIX 1 The cluter technique ued in thi paper Multi-dienional caling, principal coponent analyi and cluter analyi can all be ued for factor claification In thi tudy, coputing the correlation coefficient between a pair of colun in Table 4 tell u the iilarity of two a appraied by their peer A high poitive correlation coefficient indicate that the two are inherently iilar with repect to their input and output, which ean that they will diplay a iilar operational perforance when they are evaluated againt the optial weight of other Thu, uing thee correlation coefficient a the eleent in a reeblance atrix and executing a clutering ethod yield cluter with inherently iilar The cluter analyi technique ued in thi paper i a hierarchical clutering technique that i baed on the correlation coefficient of the colun in the cro-efficiency atrix The average linkage ethod i utilized to derive the cluter The clutering proce wa copleted on a PC verion of SPSS Figure 1 depict the dendrogra of the analyi of the hotel over the aple period The cluter are obtained by truncating the dendrogra at a recaled ditance eaure of 5 on a cale of 0 to 25, where 0 repreent a correlation coefficient of Fro left to right in the dendrogra, the iilarity decreae, and the diiilarity increae, thi ean that the benchark becoe le appropriate a we ove towa the right of the diagra 1 In thi ethod, the ditance between two cluter i defined a the average ditance between all poible pair of point within the two cluter In thi way, an average ditance i calculated and the two cluter with the allet average ditance between their point are erged at each tep 1 SPSS define a dendrogra a a viual repreentation of the tep in a hierarchical clutering olution that how the cluter being cobined and the value of the ditance coefficient at each tep Connected vertical line deignate joined cae The dendrogra recale the actual ditance to nuber between 0 and 25, preerving the ratio of the ditance between tep