Tourism Destination Efficiency Measurement and Improvement -A Case Study of Guangxi, China

Abstract

Measuring operational efficiency and improving management levels are meaningful goals for regional tourism destinations to attract more tourists and occupying a larger market share. The objective of this study is to evaluate output-oriented managerial efficiency of tourism destinations and to provide insights towards improving overall efficiency by removing impacts of environment variables and statistical noise. The tourism destination efficiency is assessed with the three-stage Data Envelopment Analysis (DEA), and effects of environment and statistical noise are purged from initial efficiency with Stochastic Frontier Analysis (SFA). This case study is based on 14 prefectural-level cities of Guangxi autonomous region, China, in which five inputs and three output variables, and three environmental variables are chosen for efficiency measurement. The results show that managerial inefficiency explains half of the variation in tourism consumption slack variables, and statistical noise explains the remaining 50% of the variation. As to output slack variables of employees in the tourism industry and the number of visitors, the variation of efficiency are mainly due to external environmental and statistical noise. This study finds that there is room to improve the destination tourism industry operational efficiency of Guangxi by 20.4%, after controlling for the effects of the external environment. Finally, the optimal combinations of inputs and outputs of each city are suggested to improve managerial efficiency.