Using a Two-Stage DEA Model to Measure Tourism Potentials of EU Countries and Western Balkan Countries: An Approach to Sustainable Development

Abstract

The concept of sustainable tourism development is imposed as an inevitable way of improving the tourism industry as a whole. This study tries to offer an adequate inclusion of sustainable factors in overall tourism development efficiency results. Through the detection and estimation of potential sources of efficiency, the paper will do the efficiency benchmarking of tourism services on the level of countries as destinations. In order to complete the task, data collection was focused on 27 EU countries and five Western Balkan countries over the period from 2011 to 2017. This paper utilized an output-oriented data envelopment analysis (DEA) procedure to estimate efficiency scores for each country, and a panel data Tobit regression model to emphasize the (in)significance of each individual tourism development indicator. The results in the first stage show relatively high-efficiency scores, particularly in the case of EU 15 countries and with room for improvement in the case of the others. The second stage reveals positive and significant effects on relative tourism efficiency by the sustainability of tourism development, the share of GDP, tourist arrivals and inbound receipts, as well as visa requirements and rate of use. Policymakers should gradually take control of the mentioned variables to protect the interests of all relevant stakeholders involved in the tourism development process.