Rebounding Efficiency: A Decade-Long DEA-MPI Inquiry into Belgian Hotel Productivity, 2015-2024

Abstract

This study examines the efficiency patterns of the Belgian hotel industry between 2020 and 2024, a period marked by the COVID-19 crisis and the gradual recovery that followed. Using Data Envelopment Analysis (DEA) as the primary methodology, complemented by a Tobit regression in a second stage, the research provides a hotel-level assessment of performance that jointly considers resource inputs and financial outputs. Specifically, staff and total assets were modeled as inputs, while turnover and EBITDA were selected as outputs to capture both revenue generation and profitability. The results reveal a clear improvement in efficiency over the study horizon, with average efficiency rising from 0.61 in 2020 to 0.81 in 2024, reflecting the sector’s capacity to adapt after the pandemic shock. Contrary to the assumption that larger establishments enjoy systematic advantages, the findings demonstrate that scale often generated inefficiencies, as many large hotels faced decreasing returns due to excess capacity or underutilized resources. Medium-sized hotels, by contrast, frequently achieved closer alignment between inputs and outputs, positioning them as relative efficiency leaders. The inclusion of EBITDA as an output proved decisive in refining the analysis: while revenue alone occasionally painted a misleading picture of performance, profitability sharply differentiated efficient hotels from those struggling with cost discipline. The Tobit regression reinforced these observations by showing that profitability exerts a strong positive effect on efficiency, while larger asset bases were negatively correlated with performance. Regional disparities were also observed, with hotels in Flanders and Brussels generally outperforming those in Wallonia, though notable exceptions within provinces highlighted the enduring importance of managerial practices and strategic positioning. Taken together, the findings emphasize that efficiency in the Belgian hotel sector is not primarily a function of size or location, but of effective resource allocation, profitability management, and adaptability to changing market conditions. These insights hold direct relevance for hotel managers, investors, and policymakers, underscoring the importance of cost control, profitability monitoring, and targeted support to enhance sector resilience. By integrating financial sustainability into the DEA framework, this thesis contributes to the broader hospitality efficiency literature and provides a nuanced account of post-crisis recovery dynamics in Belgian hotels.