Effects of Uncollected Output and Technological Heterogeneity on Hotel Efficiency

This paper analyses the effect of trade receivables management on hotel efficiency in two mature Spanish tourist destinations (the Canary and Balearic Islands), considering the inclusion of an undesirable output which is produced when credits become uncollectible and taking the technological heterogeneity existent in the sector into account. To do so, the non-radial and non-oriented slacks-based measure (SBM) and the metafrontier-SBM approaches are applied considering a weak disposability assumption for the undesirable output. In a second step, the effect of a set of determinant variables on efficiency is analyzed considering a Bayesian Tobit regression. Results indicate an overestimation of efficiency when the undesirable output is ignored, with input and undesirable output excesses being the main causes of the inefficiency. Finally, type of property appears to influence the efficiency scores obtained by non-efficient hotels.