COVID-19 and Hotel Productivity Changes: An Empirical Analysis Using Malmquist Productivity Index

Changhee Kim (), Hee Jay Kang (), Kyunghwa Chung () and Kanghwa Choi ()
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Changhee Kim: College of Business Administration, Incheon National University, Incheon, Republic of Korea
Hee Jay Kang: College of Business, Kumoh National Institute of Technology, Gyeongbuk, Republic of Korea
Kyunghwa Chung: College of Business and Management, VinUniversity, Hanoi, Vietnam
Kanghwa Choi: College of Business, Hansung University, Seoul, Republic of Korea

Service Science, 2021, vol. 13, issue 4, 243-257

Abstract: This research investigates the impact of COVID-19 on hotel productivity change using the Malmquist Productivity Index (MPI). For 26 U.S. hotel brands, productivity changes over 10 quarters from the first quarter of 2018 to the second quarter of 2020 were analyzed. After the COVID-19 outbreak, the investigated hotels’ productivity deteriorated. Decomposition revealed that, whereas technical efficiency change (EC) improved, technological change (TC) regressed, resulting in deterioration of the MPI. The investigated hotels’ EC-related practices included enhanced cleaning operations, partnering with a hygiene brand, cutting the workforce, and pay cuts. Practices related to TC included the adoption of new hygiene technology and setting a new standard at the organizational level through the formation of a global council and accreditation related to disinfection and hygiene. Our results show that though U.S. hotels are trying to improve their productivity by efficiently utilizing resources, frontier technology’s regress is decreasing productivity. Our results support the importance of investment in technology for productivity management. This research provides empirical evidence for the need for hotels to pursue technological advances to overcome the pandemic.

Keywords: COVID-19; hotel productivity; hotel efficiency; Malmquist Productivity Index (MPI); technical efficiency change (EC); technological change (TC) (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:inm:orserv:v:13:y:2021:i:4:p:243-257

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