Developing and testing a DEA-based index for the evaluation of value for money in the hospitality industry

Boccali, F., Mariani, M. ORCID: https://orcid.org/0000-0002-7916-2576 and Visani, F. (2025) Developing and testing a DEA-based index for the evaluation of value for money in the hospitality industry. International Journal of Contemporary Hospitality Management. ISSN 1757-1049 doi: 10.1108/ijchm-09-2024-1381

Abstract/Summary

Purpose The purpose of this study is to: 1) develop a brand-new index of value for money (VFM) leveraging Data Envelopment Analysis (DEA) methodology: the “DEA VFM”; 2) validate the “DEA VFM” index; 3) compare the “DEA VFM” with the Booking.com VFM index, thus demonstrating the superiority of the proposed index for managerial decision-making. Design/methodology/approach PIM-DEA software was used to develop an input-oriented DEA model with one input (i.e. the median price) and six outputs (i.e. the standardized scores of cleanliness, staff, location, facilities, free Wi-Fi, comfort) on 613 Italian hotels. Both input and outputs are based on Booking.com data related to hotels located in four different popular destinations: Rome, Florence, Milan and Venice. Findings The authors developed and validated a new index of VFM based on DEA methodology: the “DEA VFM.” The DEA VFM shows a very low correlation with Booking VFM scores, and it demonstrates a superior performance when assessing hotels’ VFM. Booking VFM essentially measures perceived value rather than the relationship between price and value. Originality/value To the best of the authors’ knowledge, this is the only and first study in the hospitality management literature that develops and validates a new index of VFM based on the DEA methodology: the “DEA VFM”. Moreover, we demonstrate the superiority of the DEA VFM index on the Booking.com VFM.

Item Type	Article
URI	https://centaur.reading.ac.uk/id/eprint/124263
Identification Number/DOI	10.1108/ijchm-09-2024-1381
Refereed	Yes
Divisions	Henley Business School > Leadership, Organisations, Behaviour and Reputation
Publisher	Emerald
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