Abstract/Summary

This paper develops and tests an innovative DEA model in the hospitality sector, by originally embedding online customer ratings among the outputs of the model. Based on a sample of 268 independent hotels located in Rome (Italy), we test a eWOM-informed DEA model and find that the introduction of online ratings among the outputs of the model significantly affects the assessment of hotels’ efficiency regardless of hotel category. The efficiency rankings generated by the DEA models embedding eWOM are radically different compared to those resulting from DEA models exclusively based on financial variables. The number of hotels improving their position in the efficiency rankings is lower than the number of hotels decreasing in the ranking. However, the average efficiency variation is positive and higher for 2- and 3- stars hotels than for 4- and 5- stars hotels. Implications for researchers in hospitality and tourism, managers and practitioners are discussed.