APPLICATION OF ENTROPY BASED TOPSIS IN ANALYSIS OF SUSTAINABILITY PERFORMANCE OF SRI LANKA HOTELS

Abstract

Sustainability is the limelight of many industries, especially in developing countries. In the hospitality industry, in particular, sustainability plays a pivotal role since it contributes immensely to the economy of a country. However, the hospitality industry is increasingly facing various challenges due to the uncertainty and instability in the business environment. Thus, the central focus of this study is to evaluate the sustainability performance of Sri Lankan hotels industry. For this purpose, 25 hotels were selected from the hotels listed in the Colombo Stock Exchange (CSE). In order to determine the sustainability performance of the selected hotel, we identified 18 indicators that represent the economic, environmental, and social and governance sustainability. Then, we developed a multidimensional sustainability performance index system and using entropy-based TOPSIS, the values of the individual indicators were aggregated. Eventually, we rank the hotels based on the TOPSIS scores, which represent the sustainability performance of hotels. The resulted TOPSIS scores reveal that the Sri Lanka hotels’ sustainable performance is moderately high. This indicates that there is a growing tendency to adopt more sustainable practices among hotels companies in Sri Lank. Recently, stakeholders in the state and private sector have paid much attention to the tourism industry because it has tremendous potential and many prospects, and the same is reflected in our results. While we are providing important implications for managers and policymakers, our findings urge the hotels with a lowlevel sustainability performance to go for more sustainable practices.