Research Article A two-stage DEA approach to analyse the efficiency of the hospitality sector Manuela Pulina University of Sassari, Italy Valentina Santoni University of Sassari, Italy Abstract This article explores the performance of the hospitality sector in Sardinia (Italy) using empirical data collected from company balance sheets (from 2004 to 2013). A standard data envelopment analysis (DEA) is run using sales revenue as an output and the monetary value of all tangible and intangible assets as well as labour costs as inputs. Following the Simar–Wilson approach, a post- DEA is also carried out to investigate the factors that influence hotels’ economic efficiency. The empirical results show that business default and the cost of money negatively influence hotels’ performance and that firms located in highly specialized areas with a strong seasonality are rela- tively inefficient. Furthermore, the short-run debt index and the long-term debt index positively impact efficiency. Keywords financial factors, hospitality sector, panel DEA, post-DEA Introduction As already well established, tourism is an important contributor to the world economy in terms of gross domestic product and employment. As reported by UNWTO (2017), in 2016 tourist flows experienced a 3.9% growth and, worldwide, over 1200 million international arrivals were registered. Given the important contribution to the world economy, this article aims to further explore the performance of the hospitality sector. In the literature, there are several studies that analyse tourism Corresponding author: Valentina Santoni, PolComIng, University of Sassari, Piazza Universita ` 11, 07100 Sassari, Italy. Email: santoniv@tiscali.it Tourism Economics 1–14 ª The Author(s) 2018 Reprints and permission: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/1354816618758733 journals.sagepub.com/home/teu