Eurozone’s Tourism Eco-Efficiency Trajectories, Productivity Change, and Renewable Dynamics: Evidence from a Slack-Based DEA Approach

This study implements a Data Envelopment Analysis (DEA) under both input- and output-orientation specifications to measure tourism technical eco-efficiencies and changes in total factor productivity for Eurozone countries from 1996 to 2019. Instead of employing hotel-specific measures or traditional proxies like length of stay or occupancy rate, this study relies on the heterogeneous nature of tourism, namely business and leisure tourism spending, distinguishing between international and domestic visits. Despite their significance for capturing the macroeconomic dynamics of tourism and interactions with the environment, this set of variables is rarely reported in the relevant literature. Efficiency and productivity scores are subsequently examined within a panel regression framework to evaluate the role of renewable energy adoption. The slack analysis reveals input excess and desirable output shortfalls, indicating structural inefficiencies in resource allocation and production performance. Regression findings suggest that the impact of renewables on tourism efficiency and productivity is regime-dependent, while panel causality tests evidence the neutrality hypothesis. The results underscore the need to improve air quality, resource allocation mechanisms, enhance sustainable sector-specific productivity strategies, and accelerate renewable transition policies.