Investigating the potential of hotel mergers in enhancing sector-wide performance of Oman?s hospitality industry

Mergers and acquisitions (MandA) in the hospitality sector involve consolidating assets among hotels through partnerships. Growth through MandA is commonly viewed as more efficient than growth by organic development efforts, which entails only increasing outputs and augmenting sales at individual hotel level. However, MandA ought to be viewed as a step forward or, possibly, backward for the future of the hotel business. As such, in the present project, we intend to develop decision tools that are prospective rather than retrospective to support decision makers (DMs) towards the MandA planning process. Hence, looking at MandA prospectively, the proposed tools may help DMs answer critical questions, such as: (1) How much efficiency gain is likely to be drawn out of a prospective hotel merger? (2) So, is the prospective hotel merger worthwhile? (3) What should be the best partners of prospective hotel mergers that would qualify the whole hotel industry to achieve maximum collective performance? In this project, we will develop a methodology that answers the above questions exclusively within the context of Oman?s hospitality industry. Inverse Data envelopment analysis (IDEA) will be adopted as a backbone for the new methodology. Conducting such a study within an emerging touristic destination, like Oman, will certainly be of great support to DMs in shaping future policies that may promote MandA as potent alternatives for enhancing sector-wide performance of the local hospitality industry.