China's regional hotel industry: efficiencies and promotion.

The performance of the hotel industry is closely related to local socio-economic conditions and the surrounding natural environment; however, these elements are largely ignored in academia and practice. Based on a mechanism that couples the hospitality industry and regional development, this article assesses the performance efficiency of the regional hotel industry from three aspects: revenues,average room rates and occupancy. The explanatory variables include the investment and construction in the local area that indicate its quality as a destination. Further variables that reflect the destinations' reception and service capacities include tourism attractions, business environment, tourist shopping attractions, information and transportation conditions, tourism professionalism level, information and promotion level, local amenities, and transportation accessibility. Empirically, Data Envelopment Analysis(DEA) and super- efficiency DEA models are applied to evaluate the efficiency of the hotel industry in 31 provinces in mainland China in 2012. The super- efficiency DEA model facilitates the construction of a performance ranking for the evaluated regions. The results show that 19 of 31 mainland Chinese provinces have efficiently developed their hotel industry, mainly in economically developed regions including Beijing, Tianjin, Shanghai, and Guangdong, in tourism provinces such as Hainan, Sichuan, Jiangsu, Zhejiang, and Guizhou, and in some less developed regions including Qinghai, Gansu, Xinjiang and Tibet. Shanghai, Tibet, Hainan, Beijing and Qinghai attain the highest scores under the super-efficiency DEA model. A hotel's technological efficiency is mainly affected by its internal investments; however, its operating scale efficiency and overall efficiency are influenced by the surrounding tourism attractions and by the destination’s reception and service capacities. This reflects that a specific hotel could‘technically'enhance its performance by increasing its investment in construction and facilities or by improving its management. However, its overall performance is conditional on tourism attractions of local destination and the surrounding businesses, shopping and amenities and is influenced by their promotion, information and accessibility. The influence of destination capacity on the hotel industry is clearly observed in Shanghai. Its score of 8.810 for hotel efficiency is considerably higher than those of the other investigated provinces because of the high standards of its surrounding destination capacities. For many provinces, the coordination between the hospitality sector and its supporting industries is more important than the hotel's own management and investment as it largely influences the scale of the hotel industry. For example, Hebei, Liaoning,Guangxi, Anhui and Henan have low scores because of the relatively poor tourism attraction resources in these provinces and because of their low business and shopping environment performances. Hence,the decreasing return to scale in the hospitality industry that is experienced in such provinces indicates that the size and volume of hotel construction need to be considered carefully; it may be unwise to extend the hotel industry in these regions. In terms of investment, staff inputs can significantly improve a hotel's operating efficiency and can warrant higher room rate charges, as in Hebei, Heilongjiang,Inner Mongolia, Jilin, Anhui, Jiangxi, Hubei, Chongqing and Shaanxi. The paper recommends three strategies to improve the regional hotel industry: enhancing the management and quality of hotel facilities; matching the scale and level of the hotel industry with its local business, tourism, and shopping attractions; and enhancing the quality of support services.