After the implementation of ECFA and Chinese tourist opening policy, Mainland China is now the largest source of tourists for Taiwan. According to the Taiwan Tourism Bureau (2014), Chinese arrivals are accounting for 40% of all international arrivals in 2014. In response to the increasing of Chinese tourists, the number of international tourist hotels (ITHs) rose from 56 hotels in 2000 to 70 in 2013. Therefore, the ITHs play an important role in Taiwan’s economic development. This study examines the
operating efficiency of ITHs in Taiwan. Data envelopment analysis is applied to evaluate the operating efficiency of ITHs based on data from 2004 to 2013. Tobit regression analysis is used to assess whether factors such as the effect of ECFA and Chinese tourist opening policy, is the hotel a listed company, business concentrative degree and market competition level have a significant impact on the operating efficiency.
The empirical results show that when a hotel is a listed company, hotels with a high business concentration level, and the hotels located in a low market concentration area, have a better operation performance. As for the impact of the relevant economic policies on operation performance, the signing of the ECFA has had a significant positive impact on the operation performance of ITHs. However, the Chinese tourists opening policy was expected to bring better performance for ITHs, but the empirical results found that the opening policy doesn’t help the ITHs’ performance. Further analysis was taken in order to have a better understanding of the effect on opening policy. The results found that the ITHs which take Chinese tourists didn’t have better operation performance than those who didn’t take Chinese tourists. The results of this study will help hotel managers to understand the impact of economic policies and hotel characteristics on the performance of ITHs and achieve better operational performance.
