Did the financial crisis and policy deregulation for Chinese tourists affect the efficiency and output slacks of taiwanese hotels?

The financial crisis of 2008 caused the economic recession. In addition, restrictions on Chinese tourists to Taiwan were relaxed in July of 2008. The paper was to examine whether the financial crisis or the deregulation of Chinese tourists affected the performance of hotels in Taiwan. A metafrontier approach to data envelopment analysis (MDEA) was used in this paper to estimate the efficiency scores and metatechnology ratios (MTRs) of 84-99 international tourism hotels (ITHs) and standard tourism hotels (STHs) in Taiwan during the period ranging from 2005 to 2010. The results indicated that the MTR of ITHs with more service facilities was worse than that of STHs with specialised room revenue during the economic downturn. After the Chinese tourists policy deregulation, the MTR of ITH had increasingly outperformed that of STH. A truncated regression with a bootstrap procedure had examined the impact of macroeconomic and microeconomic variables on hotel efficiency and output slacks. In addition to the insignificant effects of the financial crisis on the efficiency of Taiwanese hotels, China/Taiwan tourism policy deregulation had a favourable influence on hotel efficiency, but mainly benefited on the occupancy rate, and unfavourable impact on the room revenue.