Sensitivity of Listed European Hotels with the Sustainable Tourism

Abstract

This study examines the responsible energy consumption of listed European hotels. Hotel efficiency is estimated using a Stochastic Frontier Analysis (SFA) production function, with supplies costs as the input and total revenue as the output. Cluster analysis is used to group the hotels into homogeneous groups according to their efficiency level, size, or profitability. The results show that the average efficiency of listed European hotels is 25.34%. Between 2004 and 2007, the larger hotels were very inefficient, but this improved significantly in the last year, 2007. No positive relationship is observed between the returns of these hotels nor is it seen that shareholders clearly reward companies with better efficiency levels.