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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Changhee Kim & Hee Jay Kang & Kyunghwa Chung & Kanghwa Choi, 2021. "COVID-19 and Hotel Productivity Changes: An Empirical Analysis Using Malmquist Productivity Index," Service Science, INFORMS, vol. 13(4), pages 243-257, December.
    • Handle: RePEc:inm:orserv:v:13:y:2021:i:4:p:243-257
    DOI: 10.1287/serv.2021.0283
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    References listed on IDEAS

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    2. Saram Han & Christopher K. Anderson & Kyunghwa Chung, 2023. "Do managerial communications improve customer satisfaction and eWOM? The moderating effect of response authenticity," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 10(1), pages 1-12, December.
    3. Szilvia Vanessza Schalk-Nador, 2024. "Impact of the COVID-19 Pandemic on United States' Hotel Productivity: A Multi-Period Analysis," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 10(1), pages 107-122.
    4. Seung Min Shin & Kyunghwa Chung & Changhee Kim, 2024. "The Effects of Homegrown Rule on Efficiency of Sports Teams: Evidence from the English Premier League," Service Science, INFORMS, vol. 16(3), pages 143-154, September.

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