Efficiency and effectiveness of service business: Evidence from international tourist hotels in Taiwan

The aim of this paper is to propose a mathematical programming technique referred to as Hyperbolic Network Data Envelopment Analysis (HNDEA) to appraise service performance in a service industry. International tourist hotels in Taiwan are used as an example to illustrate the process. The results show that productive efficiency and service effectiveness differ across hotel businesses. Some hotels are good in terms of their production operations, while others are good in regard to their marketing operations. By identifying each competitor's performance, in terms of productive efficiency and service effectiveness, managers can select appropriate benchmark hotels to improve their operations.