European Journal of Business Science and Technology 2024, 10(1):107-122 | DOI: 10.11118/ejobsat.2023.016
Impact of the COVID-19 Pandemic on United States’ Hotel Productivity: A Multi-Period Analysis
- 1 Mendel University in Brno, Czech Republic
This paper uses the Malmquist Productivity Index to evaluate the impact of the COVID-19 pandemic on hotel productivity. It decomposes total factor productivity change (TFPC) into technical efficiency, pure and scale efficiency, and technical change to conclude on productivity growth before and after the outbreak of the pandemic. 112 hotels in four cities of the United States between 2011–2021 were subject to the analysis, using a multi-input (room, labor, and F&B costs) multi-output (accommodation, F&B, and total revenue) DEA-Malmquist model. The pandemic did not have an adverse effect on hotel productivity change, mainly due to the developments attributed to technological advancements. The paper offers crucial managerial implications. The results of the analysis emphasize the prominence of investment in technology to sustain productivity levels. It supports managers with strategy development and offers decision makers a wider overview of the sector.
Keywords: COVID-19 pandemic, productivity, Malmquist productivity index, technical efficiency change, technical change
JEL classification: D21, L83, M10
Received: July 23, 2023; Revised: October 18, 2023; Accepted: November 23, 2023; Published: June 30, 2024 Show citation
References
- Abdullah, A. A. & Hamdan, M. H. 2012. Internal Success Factor of Hotel Occupancy Rate. International Journal of Business and Social Science, 3 (22), 199-218.
- Ablanedo-Rosas, J. H., Rubio, I., Chen, J. & Ruiz-Torres, A. J. 2023. COVID-19 Impact on the Operational Efficiency of a Downtown Hotel. Anatolia, 34 (2), 130-143. DOI 10.1080/13032917.2021.1997774
Go to original source...
- Aigbedo, H. 2021. Impact of COVID-19 on the Hospitality Industry: A Supply Chain Resilience Perspective. International Journal of Hospitality Management, 98 (3), 103012. DOI 10.1016/j.ijhm.2021.103012
Go to original source...
- Aissa, S. B. & Goaied, M. 2016. Determinants of Tunisian Hotel Profitability: The Role of Managerial Efficiency. Tourism Management, 52 (C), 478-487. DOI 10.1016/j.tourman.2015.07.015
Go to original source...
- American Hotel & Lodging Association. 2022. The Year of the "New" Traveler [online]. Available at: https://www.ahla.com/sites/default/files/AHLA%20SOTI%20Report%202022%201.24.22.pdf. [Accessed 2022, September 7].
- Antonio, N. & Rita, P. 2021. COVID 19: The Catalyst for Digital Transformation in the Hospitality Industry? Tourism & Management Studies, 17 (2), 41-46. DOI 10.18089/tms.2021.170204
Go to original source...
- Assaf, A. G. & Agbola, F. W. 2011. Modelling the Performance of Australian Hotels: A DEA Double Bootstrap Approach. Tourism Economics, 17 (1), 73-89. DOI 10.5367/te.2011.0027
Go to original source...
- Assaf, A. G., Barros, C. P. & Machado, L. P. 2011. The Future Outlook for Portuguese Travel Agents. Tourism Economics, 17 (2), 405-423. DOI 10.5367/te.2011.0034
Go to original source...
- Avkiran, N. K. 2006. Productivity Analysis in the Service Sector with Data Envelopment Analysis [online]. Available at: https://ssrn.com/abstract=2627576. DOI 10.2139/ssrn.2627576
Go to original source...
- Bagnera, S. M. & Stewart, E. 2020. Navigating Hotel Operations in Times of COVID-19. Boston Hospitality Review [online]. Available at: https://www.bu.edu/bhr/2020/03/25/navigating-hotel-operations-in-times-of-covid-19/. [Accessed 2022, October 22].
- Bakar, N. A. & Rosbi, S. 2020. Effect of Coronavirus Disease (COVID-19) to Tourism Industry. International Journal of Advanced Engineering Research and Science, 7 (4), 189-193. DOI 10.22161/ijaers.74.23
Go to original source...
- Baker, M. & Riley, M. 1994. New Perspectives on Productivity in Hotels: Some Advances and New Directions. International Journal of Hospitality Management, 13 (4), 297-311. DOI 10.1016/0278-4319(94)90068-X
Go to original source...
- Barros, C. P. 2005. Evaluating the Efficiency of a Small Hotel Chain with a Malmquist Productivity Index. International Journal of Tourism Research, 7 (3), 173-184. DOI 10.1002/jtr.529
Go to original source...
- Barros, C. P. & Alves, F. P. 2004. Productivity in the Tourism Industry. International Advances in Economic Research, 10 (3), 215-225. DOI 10.1007/BF02296216
Go to original source...
- Brown, J. R. & Dev, C. S. 1999. Looking Beyond RevPAR: Productivity Consequences of Hotel Strategies. The Cornell Hotel and Restaurant Administration Quarterly, 40 (2), 23-33. DOI 10.1016/S0010-8804(99)80021-4
Go to original source...
- Brown, J. R. & Dev, C. S. 2000. Improving Productivity in a Service Business: Evidence from the Hotel Industry. Journal of Service Research, 2 (4), 339-354. DOI 10.1177/109467050024003
Go to original source...
- Cajner, T., Crane, L. D., Decker, R. A., Hamins-Puertolas, A. & Kurz, C. 2020. Tracking Labor Market Developments during the COVID-19 Pandemic: A Preliminary Assessment. Finance and Economics Discussion Series, 2020-030. Washington: Board of Governors of the Federal Reserve System. DOI 10.17016/FEDS.2020.030
Go to original source...
- Chatzimichael, K. & Liasidou, S. 2019. A Parametric Decomposition of Hotel-Sector Productivity Growth. International Journal of Hospitality Management, 76 (A), 206-215. DOI 10.1016/j.ijhm.2018.05.010
Go to original source...
- Criscuolo, C. 2021. Productivity and Business Dynamics through the Lens of COVID-19: The Shock, Risks and Opportunities [online]. Sintra: ECB Forum on Central Banking. Available at: https://www.ecb.europa.eu/pub/conferences/ecbforum/shared/pdf/2021/Criscuolo_paper.en.pdf. [Accessed 2022, September 10].
- Dalbor, M. C. & Andrew, W. P. 2000. Agency Problems and Hotel Appraisal Accuracy an Exploratory Study. International Journal of Hospitality Management, 19 (4), 353-360. DOI 10.1016/S0278-4319(00)00014-1
Go to original source...
- Davahli, M. R., Karwowski, W., Sonmez, S. & Apostolopoulos, Y. 2020. The Hospitality Industry in the Face of the COVID-19 Pandemic: Current Topics and Research Methods. International Journal of Environmental Research and Public Health, 17 (20), 7366. DOI 10.3390/ijerph17207366
Go to original source...
- Davari, D., Vayghan, S., Jang, S. C. & Erdem, M. 2022. Hotel Experiences during the COVID-19 Pandemic: High-Touch versus High-Tech. International Journal of Contemporary Hospitality Management, 34 (4), 1312-1330. DOI 10.1108/IJCHM-07-2021-0919
Go to original source...
- De Jorge, J. & Suárez, C. 2014. Productivity, Efficiency and its Determinant Factors in Hotels. The Service Industries Journal, 34 (4), 354-372. DOI 10.1080/02642069.2013.778977
Go to original source...
- Färe, R., Grosskopf, S., Norris, M. & Zhang, Z. 1994. Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries. The American Economic Review, 84 (1), 66-83.
- Frančeškin, J. & Bojnec, Š. 2023. Total Factor Productivity of the Slovenian Hotel Companies. Economic Research-Ekonomska Istraživanja, 36 (1), 2119428. DOI 10.1080/1331677X.2022.2119428
Go to original source...
- Fried, H. O., Lovell, C. A. K. & Schmidt, S. S. (eds.). 2008. The Measurement of Productive Efficiency and Productivity Growth. New York: Oxford University Press. ISBN 978-0-19-518352-8.
- Gerwe, O. 2021. The COVID-19 Pandemic and the Accommodation Sharing Sector: Effects and Prospects for Recovery. Technological Forecasting and Social Change, 167 (C), 120733. DOI 10.1016/j.techfore.2021.120733
Go to original source...
- Goncalves, O. 2013. Efficiency and Productivity of French Ski Resorts. Tourism Management, 36 (C), 650-657. DOI 10.1016/j.tourman.2012.06.008
Go to original source...
- Gursoy, D. & Chi, C. G. 2020. Effects of COVID-19 Pandemic on Hospitality Industry: Review of the Current Situations and a Research Agenda. Journal of Hospitality Marketing and Management, 29 (5), 527-529. DOI 10.1080/19368623.2020.1788231
Go to original source...
- Gursoy, D., Chi, C. G. & Chi, O. H. 2020. Restaurant and Hotel Customers' Sentiment Analysis. Would They Come Back? If They Would, WHEN? COVID-19 Report 2: Restaurant and Hotel Industry. Pullman, WA: Washington State University Press.
- Gössling, S., Scott, D. & Hall, C. M. 2021. Pandemics, Tourism and Global Change: A Rapid Assessment of COVID-19. Journal of Sustainable Tourism, 29 (1), 1-20. DOI 10.1080/09669582.2020.1758708
Go to original source...
- Hoque, A., Shikha, F. A., Hasanat, M. W., Arif, I. & Hamid, A. B. A. 2020. The Effect of Coronavirus (COVID-19) in the Tourism Industry in China. Asian Journal of Multidisciplinary Studies, 3 (1), 52-58.
- Hu, M. & Lee, A. D. 2020. Airbnb, COVID-19 Risk and Lockdowns: Local and Global Evidence [online]. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3589141. [Accessed 2022, October 20]. DOI 10.2139/ssrn.3589141
Go to original source...
- Im, Y. & Kim, C. 2022. A Study on Hotel Employees' Perceptions of the Fourth Industrial Technology. Journal of Hospitality and Tourism Management, 51, 559-567. DOI 10.1016/j.jhtm.2022.05.003
Go to original source...
- Internal Revenue Service. 2022. COVID-19-Related Employee Retention Credits: General Information FAQs [online]. Available at: https://www.irs.gov/newsroom/covid-19-related-employee-retention-credits-general-information-faqs. [Accessed 2022, December 10].
- Johns, N., Howcroft, B. & Drake, L. 1997. The Use of Data Envelopment Analysis to Monitor Hotel Productivity. Progress in Tourism and Hospitality Research, 3 (2), 119-127. DOI: 10.1002/(SICI)1099-1603(199706)3:2<119::AID-PTH74>3.0.CO;2-2.
Go to original source...
- Kim, C., Kang, H. J., Chung, K. & Choi, K. 2021. COVID-19 and Hotel Productivity Changes: An Empirical Analysis Using Malmquist Productivity Index. Service Science, 13 (4), 243-257. DOI 10.1287/serv.2021.0283
Go to original source...
- Kim, J., Kim, S. I. & Lee, M. 2022. What to Sell and How to Sell Matters: Focusing on Luxury Hotel Properties' Business Performance and Efficiency. Cornell Hospitality Quarterly, 63 (1), 78-95. DOI 10.1177/19389655211020254
Go to original source...
- Kim, S. 2011. Factor Determinants of Total Factor Productivity Growth in the Malaysian Hotel Industry: A Stochastic Frontier Approach. Cornell Hospitality Quarterly, 52 (1), 35-47. DOI 10.1177/1938965509341286
Go to original source...
- Martins, A., Riordan, T. & Dolnicar, S. 2020. A Post-COVID-19 Model of Tourism and Hospitality Workforce Resilience. SocArXiv Paper. DOI 10.31235/osf.io/4quga
Go to original source...
- McMahon, F. 1994. Productivity in the Hotel Industry. In Seaton, A. V. (ed.). Tourism: The State of the Art, pp. 616-625. Dublin: Wiley.
- Meriküll, J. & Paulus, A. 2024. Were Jobs Saved at the Cost of Productivity in the COVID-19 Crisis? European Economic Review, 161, 104618. DOI 10.1016/j.euroecorev.2023.104618
Go to original source...
- Ocheni, S., Agba, A. M. O., Agba, M. S. & Eteng, F. O. 2020. COVID-19 and the Tourism Industry: Critical Overview, Lessons and Policy Options. Academic Journal of Interdisciplinary Studies, 9 (6), 114-129. DOI 10.36941/ajis-2020-0116
Go to original source...
- Ozdemir, O., Dogru, T., Kizildag, M., Mody, M. & Suess, C. 2021. Quantifying the Economic Impact of COVID-19 on the U.S. Hotel Industry: Examination of Hotel Segments and Operational Structures. Tourism Management Perspectives, 39, 100864. DOI 10.1016/j.tmp.2021.100864
Go to original source...
- Peypoch, N. & Sbai, S. 2011. Productivity Growth and Biased Technological Change: The Case of Moroccan Hotels. International Journal of Hospitality Management, 30 (1), 136-140. DOI 10.1016/j.ijhm.2010.04.005
Go to original source...
- Peypoch, N., Song, Y. & Zhang, L. 2021. The Nature of Technological Change in the Chinese Hotel Sector. Journal of Hospitality & Tourism Research, 45 (1), 151-170. DOI 10.1177/1096348020944459
Go to original source...
- Rodríguez-Antón, J. M. & Alonso-Almeida, M. del M. 2020. COVID-19 Impacts and Recovery Strategies: The Case of the Hospitality Industry in Spain. Sustainability, 12 (20), 8599. DOI 10.3390/su12208599
Go to original source...
- Rosemberg, M.-A. S. 2020. Health and Safety Considerations for Hotel Cleaners during COVID-19. Occupational Medicine, 70 (5), 382-383. DOI 10.1093/occmed/kqaa053
Go to original source...
- Scholz, P., Červová, L., Janeček, P. & Linderová, I. 2022. Green Management Implementation: A Case of the Bulgarian Hotel Market. E+M Ekonomie a Management, 25 (1), 177-194. DOI 10.15240/tul/001/2022-1-011
Go to original source...
- Sigala, M., Jones, P., Lockwood, A. & Airey, D. 2005. Productivity in Hotels: A Stepwise Data Envelopment Analysis of Hotels' Rooms Division Processes. The Service Industries Journal, 25 (1), 61-81. DOI 10.1080/0264206042000302414
Go to original source...
- STR. 2021. Forecast: U.S. Hotel Demand and ADR will Near Full Recovery in 2022 [online]. Available at: https://str.com/press-release/forecast-us-hotel-demand-and-adr-will-near-full-recovery-2022 [Accessed 2022, September 2].
- Syverson, C. 2011. What Determines Productivity? Journal of Economic Literature, 49 (2), 326-365. DOI 10.1257/jel.49.2.326
Go to original source...
- Škare, M., Soriano, D. R. & Porada-Rochoń, M. 2021. Impact of COVID-19 on the Travel and Tourism Industry. Technological Forecasting and Social Change, 163, 120469. DOI 10.1016/j.techfore.2020.120469
Go to original source...
- Štumpf, P., Mattyašovská, J. & Krištůfková, A. 2021. Restart of Hospitality and Tourism: System Dynamics and Scenario-Based Modelling. Academica Turistica, 14 (2), 125-136. DOI 10.26493/2335-4194.14.125-136
Go to original source...
- Tzeremes, N. G. 2021. Robust Malmquist Productivity Measurement: Evidence from Spanish Hotel Industry during the Great Recession. International Journal of Productivity and Performance Management, 70 (2), 408-426. DOI 10.1108/IJPPM-01-2019-0037
Go to original source...
- World Health Organization. 2020. Operational Considerations for COVID-19 Management in the Accommodation Sector: Interim Guidance [online]. Available at: https://www.who.int/publications/i/item/operational-considerations-for-covid-19-management-in-the-accommodation-sector-interim-guidance. [Accessed 2022, September 13].
- World Travel & Tourism Council. 2020. Tourism Recovery Post COVID-19 [online]. Available at: https://wttc.org/en-us/COVID-19/Recovery-Post-COVID-19. [Accessed 2021, December 10].
- Yang, Y., Zhang, H. & Chen, X. 2020. Coronavirus Pandemic and Tourism: Dynamic Stochastic General Equilibrium Modeling of Infectious Disease Outbreak. Annals of Tourism Research, 83, 102913. DOI 10.1016/j.annals.2020.102913
Go to original source...
- Zenker, S. & Kock, F. 2020. The Coronavirus Pandemic - A Critical Discussion of a Tourism Research Agenda. Tourism Management, 81, 104164. DOI 10.1016/j.tourman.2020.104164
Go to original source...
This is an open access article distributed under the terms of the Creative Commons Attribution-ShareAlike 4.0 International License (CC BY-SA 4.0), which permits use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.