How can managerial efficiency be improved? Evidence from the bed and breakfast industry

The bed and breakfast (B&B) industry is an emerging industry in Taiwan. This industry in Taiwan boosts local economic prosperity by creating more jobs, and it also preserves traditional culture while developing sustainable tourism. This study examines managerial efficiency for 18 cities and counties in Taiwan where bed and breakfast accommodations are located using the slacks-based measurement (SBM) model and the total-factor input and output efficiency indexes. Findings conclude that B&Bs do not invest useless inputs; rather, B&Bs optimally utilize inputs, which results in higher performing inputs than outputs. Number of employees has the highest input index score among the evaluated inputs, indicating that B&Bs in Taiwan manage labor requirements efficiently. For output efficiency index scores, room revenue receives the highest score, while food and beverage revenue earns the lowest score. Thus, this research recommends B&Bs in Taiwan to focus efforts on improving food and beverage services to maximize revenue.