Taiwanese bed and breakfast business performance: A geographic region perspective

Taiwan has prioritized bed and breakfast (B&B) business performance improvement in its tourism policies because B&Bs are a sustainable business model that can boost local economy through rural tourism. In order to identify the factors that can improve business performance, this research uses directional distance function and metafrontier approach to evaluate the technical efficiency of 18 cities and counties with B&Bs in Taiwan from 2011 to 2016. Results are divided into four geographic regions: Northern, Central, Southern, and Eastern Taiwan; technology gap ratios are computed to determine the degree of technical gaps for each region in order to provide information to potential B&B owners when selecting their accommodation location or region, to aid B&B managers in tailoring their business models and marketing strategies to maximize total revenues or minimize inputs, and to facilitate tourism, small businesses, and local economy with the support of the Taiwanese government.