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This study assesses the total factor productivity, efficiency and its determinants in the hotel sector in the period 1999–2007, with the objective to analyze the management implications of these outcomes. The results show improvements in productivity due to innovation, with significant differences due to the geographic location, and a decrease in efficiency explained in terms of adaptation to supply. There are several factors determining the efficient leading hotels. First, the concentration market share to achieve efficiency gains. Second, a curvilinear (U) shape between efficiency and size of the hotel. Third, a higher degree of organizational autonomy is positively related to efficiency, but negatively related to the commitment to quality.
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