On the analysis of efficiency in the hotel sector: does tourism specialization matter?

Abstract

This article analyzes the consequences of tourism specialization on efficiency in the hotel sector. The evidence found in other sectors and economies supports the goodness specialization. Nevertheless, tourism-led economies have particular issues that need to be addressed such as seasonality and the lack of significant tradable competitive activities that could trigger spillover effects to services. Spain provides a suitable context for a comparative case study where industrial-led provinces coexist with others that are tourism-led. The article assumes a novel panel data stochastic frontier (SF) model where inefficiency is explained by industrial and service specialization, international competitiveness, tourism specialization, quality of tourism supply, and seasonality. All variables contribute to reducing inefficiency, but service specialization makes the biggest impact. Hence, tourism-led provinces produce the highest efficiency scores.