Exploring the dynamics of the efficiency in the Italian hospitality sector. A regional case study

This paper introduces a methodology to describe and compare the economic relative performance of the
hospitality sector of the Italian regions during the period 2000–2004. Dynamics of the hospitality sector
of each region is represented by the evolution of its economic efficiency. The investigation involves the
following steps: a static Data Envelopment Analysis (DEA) to estimate the pure economic efficiency;
two different notions of distances between time series and hierarchical clustering techniques are used
to classify the economies in the sample. By using a correlation-based distance, three main clusters are
detected, while two clusters are identified when the average distance is used. The trend patterns, identified by employing the correlation distance, can be interpreted in terms of exogenous factors that influence the economic efficiency of the group of regions, causing shocks picked up by the high volatility as
well as structural breaks. By employing the average distance, one infers information on the cluster that
have had similar efficiency values over the period under analysis. This efficiency can be also interpreted
in terms of a particular type of hospitality management as well as the firm structure. Following the analysis, some policy and management implications are presented.