Research Note

Multi-criteria ELECTRE method and destination competitiveness

Laurent Botti , Nicolas Peypoch
CAEPEM, Universit de Perpignan Via Domitia, France
a b s t r a c t a r t i c l e i n f o
Article history:
Received 3 November 2012
Accepted 12 January 2013
Keywords:
MCDA
ELECTRE
Destination
Competitiveness
Performance
Hawaiian islands
The aimof this research note is to implement an application of Multi-Criteria Decision Analysis (MCDA) method
ELECTRE I to tourism destinations. By doing so, this paper contributes to the reexion on tourism destination
competitiveness which has known a greater interest these recent years. Despite that MCDA outranking methods
can apply to any area, very few applications have been done to the tourism context. The case of four Hawaiian
islands is used to show how ELECTRE I can be used to analyse tourism destination relative competitiveness. It
is shown that ELECTRE I and Weighted-Sum Method (most widely MCDA applied approach) results differ.
Empirical results illustrate the two different advantages of destinations (comparative and competitive
advantages) and push to believe that competitive advantages are more closely linked to competitiveness than
comparative ones.
2013 Elsevier Ltd. All rights reserved.
1. Introduction
Due to the dynamism of the global tourism industry, competitive-
ness is a growing interest area. Searching the key-word competitiveness
in TourismManagement journal gives more and more results as exposed
by Fig. 1. Due to their centrality in the tourismsystem, tourismdestina-
tions (TD) benet fromthis interest and many tourismresearchers have
deal with the topic of tourism destination competitiveness (TDC)
(Cracolici & Nijkamp, 2008; Enright & Newton, 2004; Gomezelj &
Mihalic, 2008). In his time, Porter (1990) already argued that there is
a wide variety of perspectives on competitiveness which makes it
difcult to give a conclusive denition of this concept. To understand
TDC, though numerous determinants should be considered (Enright
& Newton, 2004), we dispose nowadays of the Ritchie and Crouch
(2003), one of the most cited ones. This model integrates all the
relevant factors that might typify the competitiveness of a destination.
In this context, this research note aims to show the interest of
Multi-Criteria Decision Analysis (MCDA) methods regarding the
operationalization of this model. By doing so, we follow Zhang, Gu,
Gu, and Zhang (2011) for whom the analysis of TDC is based on two
aspects: choose (or establish) an evaluation model and select an assess-
ment method.
Section 2 will develop the idea that MCDA methods are relevant to
deal with TDC analysis. For doing so, this note will conform with
Cracolici and Nijkamp (2008) who specify that the satisfaction achieved
by tourists can be used to indirectly evaluate the competitive ability of
TD to outperform others destinations. As an illustration of this idea,
Section 3 will focus on an application of ELECTRE method (ELimination
and Choice Expressing Reality Roy, 1991) on four Hawaiian islands
(Kaui'i, Kona, Maui and O'ahu) and with data from 2011 concerning
European visitors. Overall growth was the outcome for the Hawaiian
tourismindustry in2011 (visitor arrivals rise upby 4%and expenditures
by more than 10%), in spite of economic uncertainties faced by many
market areas (Hawai'i Tourism Authority, 2011). However, considering
that competing destinations are continuously upgrading themselves,
the need to adopt appropriate strategies is still an obligation for the
Destination Management Organization (DMO Sainaghi, 2006).
Tourism Management Perspectives 6 (2013) 108113
Corresponding author.
E-mail addresses: laurent.botti@univ-perp.fr (L. Botti), peypoch@univ-perp.fr
(N. Peypoch).
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30
21
43
42
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5
10
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50
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Fig. 1. Papers in Tourism Management journal Competitiveness in All elds.
2211-9736/$ see front matter 2013 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.tmp.2013.01.001
Contents lists available at SciVerse ScienceDirect
Tourism Management Perspectives
j our nal homepage: www. el sevi er . com/ l ocat e/ t mp
2. MCDA methods and TDC
Multi-Criteria Decision Analysis (MCDA) is a general term for
methods providing a quantitative approach to support decision making
in problems involving several criteria and choices (alternatives or ac-
tions). Real-world decision problems are rarely mono-criterion based.
They generally incorporate a variety of criteria, often contradictory.
MCDA methods are generally classied in two groups: Compensatory
methods and non-compensatory ones (when strength in one of the
criteria doesn't compensate weaknesses in others) (Rowley, Peters,
Lundie, & Moore, 2012). Non compensatory MCDA methods are largely
based on the outranking relation which is a binary relation S dened
on the set of alternatives A such that hSk if there are enough arguments
to decide that choice h is at least as good as choice S, whereas there is
no essential argument to refute that statement. The basic data of a
MCDA problem are in consequence a set of n alternatives A=(a
i
;i =
1, , n), a set of m criteria L=(l
j
;j =1, , m), and a set of m weights of
criteria W=(w
j
;j =1, , m) whichdepict informationonrelative impor-
tance of criteria (i.e. decision-maker's preference) and a nm matrix
(also called performance table) containing the evaluation r
ij
of each
alternative a
i
on each criterion l
j
.
Why are MCDA methods relevant to deal with competitiveness of
TD? By using a MCDA method, the decision maker must want to
include in its framework at least three criteria (Figueira, Mousseau,
& Roy, 2005). Tourism destinations are an integrated set of tourist
facilities which have to face the challenge of operating their resources
effectively and efciently in order to supply an experience that
outperforms alternative experiences on the market (Cracolici &
Nijkamp, 2008; Ritchie & Crouch, 2000). Accordingly, tourists who
wish to enjoy a satisfying experience try to select one destination
from a set of n possible alternatives and on the basis of m criteria.
As a consequence, destination selection can be seen as a MCDA prob-
lem. As Andrades-Caldito, Sanchez-Rivero, and Pulido-Fernandez
(2013) declare there is today a consensus about the main framework
Destination choice
Supporting
factors and
resources
1
C
Core
resources
and
attractors
2
C
Destination
policy,
planning &
development
3
C
Destination
management
4
C
2
a
4
a
5
a
6
a
Qualifying &
amplifying
determinants
5
C
1
a
3
a
Fig. 2. Tourist multi-criteria decision framework (5 criteria and 6 alternative destinations).
Fig. 3. ELECTRE I process ow.
Table 1
Outranking framework and graphical representation.
Outranking relations Preference, indifference
or incomparability?
Graphical representations
hSk and not kSh hPk (h is strictly preferred to k)
kSh and not hSk kPh (k is strictly preferred to h)
hSk and kSh kIh (h is indifferent to k)
Not hSk and not kSh kRh (h is incomparable to k)
109 L. Botti, N. Peypoch / Tourism Management Perspectives 6 (2013) 108113
permitting to understand competitiveness of TD: that of Ritchie and
Crouch (2003). This model is based on ve competitiveness
components (Core resources and attractors; Supporting factors and
resources; Destination Management; Destination policy, planning
and development; Qualifying and amplifying determinants) and
ts thus properly to MCDA method. The hierarchical structure of
this decision making problem is shown in Fig. 2 which sheds light
to the fact that decision making is almost always about making
compromises.
Methods which strictly apply the previous denition of the out-
ranking relation are the ELECTRE methods. ELECTRE is a family of
MCDA methods that originated in Europe in the mid-1960s. The
acronym ELECTRE stands for ELimination Et Choix Traduisant la
REalit. The method (rst proposed by Bernard Roy who is widely
recognized as its father 1991) was initially designed to work on real
world choice problems of rms (rarely mono criterion founded) and
to permit to decision makers to go beyond the classic Weighted
Sum Method (WSM a compensatory MCDA method). Nowadays,
ELECTRE method is more widely known and has evolved into several
expansions and utilizations (Hatami-Marbini & Tavana, 2011).
However, although MCDA methods are generic methods which
can be applied to different areas (see for example the authoritative
book from Figueira, Greco, and Ehrgott (2005) for applications to
nancial decision, energy and telecommunication network planning
or sustainable development), the literature is quite narrow when
considering the tourismeld. Zhang et al. (2011) made an application
of TOPSIS (Technique for Order Preference by Similarity to Ideal Solu-
tion) to rank 16 cities in the Yangtze River Delta (China). TOPSIS was
also used by Ishizaka, Nemery, and Lidouh (2013) to select the
location of a casino in the Greater London region by taking two view-
points into consideration (one focussed on protability and the other
on social benets). They found that the PROMETHEE method (from
the outranking MCDA methods family) and the Weighted Sum
Method are more suitable for solving this kind of problem. Finally,
Andrades-Caldito et al. (2013) apply ELECTRE II to obtain a ranking
of the provinces of Andalusia (Spain) according to their level of at-
tractiveness, as perceived by tourists. In this note, ELECTRE I, which
permits to choose the best action(s) from a given set of alternatives,
is applied.
ELECTRE methods comprise two parts: construction of outranking
relations followed by an exploitation procedure used to elaborate
recommendations. The construction of outranking relations aims at
comparing each pair of actions. The nature of the recommendations
depends on the problematic: choosing, ranking or sorting. ELECTRE I
answers the rst kind of problematic. Widely used (to investment,
equipment or outsourcing contract selection), it should be applied
only when all criteria are coded in numerical scales with identical
ranges. In such a situation, the construction of an outranking relation
is based on two major concepts. (i) Concordance: An outranking rela-
tion hSk is validated if a sufcient majority of criteria are consistent
with it. (ii) Non-discordance: When the concordance condition holds,
none of the criteria which are inconsistent with hSk should oppose
too strongly. These two conditions must be fullled for validating the
assertion hSk (Figure 3). Note that outranking relations are not
necessarily transitive due to Condorcet effect and incomparabilities
(Hatami-Marbini & Tavana, 2011).
To be sure that a sufcient majority of criteria are in favour of hSk,
ELECTRE I uses a concordance index C(hSk) and a concordance level
C*, whose value generally falls within the range [0.5, 1min
j
w
j
], in
the following relation C(hSk)C*. The concordance index is dened
by:
C hSk

jl

w
j

jl
w
j
1
where l ' ={j : r
j
(h)r
j
(k)} i.e. the set of criteria belonging to the con-
cordant coalition with the outranking relation hSk. In other words, the
value of concordance index must be greater than or equal to a given
concordance level, C*. On the other hand, no discordance against the
assertion h is at least as good as k may occur. The discordance index
is measured as follows:
D hSk
max
j:r
hj
b r
kj f g
r
kj
r
hj
n o.
dmax
2
where d max is the maximal difference between performance of
alternatives (considering all alternatives and the criterion selected
by the numerator). This level measures the power of the discordant
Table 2
Selected criteria (l
j
), their weights (w
j
) and attributes (f
t
) for case study.
Ritchie and Crouch (2003)
Criteria Supporting factors
and resources
Core resources and
attractors
Destination policy, planning
& development
Destination
management
Qualifying & amplifying
determinants
Case study model of DC
Criteria
L={lj : j =1, , 4}
Supporting factors
and resources (l
1
)
Core resources
and attractors (l
2
)
Destination policy, planning,
development & management (l
3
)
Qualifying & amplifying
determinants (l
4
)
Weights
W=(w
j
; j =1, , 4)
w
1
=0.174 w
2
=0.267 w
3
=0.367 w
4
=0.191
Attributes
F
j
={f
tj
;t =1, , p;j =1, , 4}
f
11
: Accommodations
f
21
: Restaurant
f
12
: Golf
f
22
: Activities & attractions
f
13
: Airports
f
23
: Transportation
f
14
: Shopping
f
24
: Parks & beaches
Table 3
Performance matrix of Hawaiian islands.
Supporting
factors and
resources
Core resources
and attractors
Destination policy,
planning, development
& management
Qualifying &
amplifying
determinants
Kaua'i 0.62 0.85 0.42 0.50
Kona 0.63 0.76 0.45 0.58
Maui 0.63 0.71 0.51 0.63
O'ahu 0.57 0.49 0.51 0.69
Table 4
The concordance matrix.
Kaua'i Kona Maui O'ahu
Kaua'i 1 0.27 0.27 0.44
Kona 0.73 1 0.44 0.44
Maui 0.73 0.56 1 0.44
O'ahu 0.56 0.56 0.56 1
110 L. Botti, N. Peypoch / Tourism Management Perspectives 6 (2013) 108113
coalition, meaning that if its value surpasses a given level, D*, the
assertion is no longer valid. Accordingly, discordant coalition exerts
no power whenever D(hSk)D*. Both concordance and discordance
indexes have to be computed for every pair of actions (h,k) in the
set A. Hence for each pair of actions (h,k), only one situation may
occur like exposed in Table 1.
3. ELECTRE I and TDC: the case of Hawaiian islands
An important pitfall of ELECTRE methods is the need for precise
measurement of performance of alternatives on each criterion and
the relative role attached to each criterion, i.e. its weight (w
j
). The
weight of a criterion reects its voting power when it contributes to
the majority which is in favour of an outranking relation. Weights
must not depend neither on the ranges nor the encoding of the scales
and cannot be interpreted as substitution rates as in compensatory
MCDA methods. The main limit of ELECTRE methods (as well as all
methods belonging to the MCDA methods family) is that they may
rely on subjective inputs from the decision-maker (when weights
and performance of alternatives on each criterion are directly assigned
by the decision-maker).
Data are derived from the 2011 Hawaiian Visitor Satisfaction &
Activity Report which presents the up to date results of a survey
conducted annually by the Hawai'i Tourism Authority (HTA).
1
The
main objective of this report is to provide measurements of survey
respondent's satisfaction with Hawai'i as a destination. As a conse-
quence, the HTA report attempts to portray visitor's evaluation of
their experience by covering various aspects of their trip for the island
that they stayed the longest. Hawai'i is composed of six major islands:
Kaua'i, O'ahu, Moloka'i, Lana'i, Maui and Hawai'i island. Due to data
availability, this paper focuses on four islands (Kaua'i, Hawai'i island
(approached through its main region Kona), O'ahu and Maui) and
on visitors from Europe (i.e. from UK, Germany, France, Italy and
Switzerland). This note focuses then on the application of ELECTRE I
to a set of alternatives A=(a
i
; i =1, , 4).
Visitors were asked to rate few attributes of islands: accommoda-
tions, restaurant, shopping, golf, activities/attractions, transportation,
airports, parks & beaches. Rating of attributes is based on four catego-
ries: very satised, somewhat satised, somewhat dissatised, not sat-
ised at all. Satisfaction level is an important indicator of performance
(Cracolici & Nijkamp, 2008). It provides relevant feedback on how well
services are delivered and fulls expectations. In the case of tourism,
high satisfaction regarding a destination encourages return trips and
likelihood to recommend this destination to others, i.e. potential
visitors. For the study of competitiveness of Hawaiian islands, this
note uses the proportion of very satised visitors as measurement of
performance. The selected criteria, their weights (from Crouch, 2011)
and attributes are described in Table 2. Since this note is based on
few attributes, the third and fourth determinants are merged in one
criterion. As a consequence, this paper follows Crouch (2011) and
Andrades-Caldito et al. (2013) for the weight of each criterion.
Table 3 presents, on each criterion, performance of islands used in
the study. Considering F
j
={f
tj
; t =1, , p} the set of p attributes of
criterion j, performances are obtained by:
r
ij

1
p
X
p
t1
r
ijt
: 3
As an example, almost 62% of European survey respondents are
very satised with supporting factors and resources from Kaua'i as
1
http://www.hawaiitourismauthority.org/research/reports/annual-visitor-
research/
Table 5
The discordance matrix.
Kaua'i Kona Maui O'ahu
Kaua'i 0 0.11 0.19 0.27
Kona 0.10 0 0.12 0.16
Maui 0.16 0.07 0 0.09
O'ahu 0.42 0.33 0.26 0
Table 6
ELECTRE I method graph construction.
C* D* Outranking
relations
considered
Decision graph
Decreasing Increasing
0.73 0.10 Kona (a
2
) S
Kaua'i (a
1
)
0.73 0.16 Kona (a
2
)S
Kaua'i (a
1
)
Maui (a
3
)S
Kaua'i (a
1
)
0.56 0.16 Kona (a
2
)S
Kaua'i (a
1
)
Maui (a
3
)S
Kaua'i (a
1
)
Maui (a
3
)S
Kona (a
2
)
0.56 0.26 Kona (a
2
)S
Kaua'i (a
1
)
Maui (a
3
)S
Kaua'i (a
1
)
Maui (a
3
)S
Kona (a
2
)
O'ahu (a
4
)S
Maui (a
3
)
0.56 0.33 Kona (a
2
)S
Kaua'i (a
1
)
Maui (a
3
)S
Kaua'i (a
1
)
Maui (a
3
)S
Kona (a
2
)
O'ahu (a
4
)S
Maui (a
3
)
O'ahu (a
4
)S
Kona (a
2
)
0.56 0.42 Kona (a
2
)S
Kaua'i (a
1
)
Maui (a
3
)S
Kaua'i (a
1
)
Maui (a
3
)S
Kona (a
2
)
O'ahu (a
4
)S
Maui (a
3
)
O'ahu (a
4
)S
Kona (a
2
)
O'ahu (a
4
)S
Kaua'i (a
1
)
111 L. Botti, N. Peypoch / Tourism Management Perspectives 6 (2013) 108113
70.7% are very satised with attribute 1 (accommodations) and 52.7%
are very satised with attribute 2 (restaurant). A higher percentage of
European visitors in 2011 were very satised with supporting factors
and attractors on Kaua'i, Kona and Maui compared to O'ahu. Howev-
er, very satised ratings for l
3
and l
4
are higher for O'ahu compared to
those of Kaua'i, Kona and Maui. This situation illustrates the two
different advantages of destinations (comparative and competitive
advantages) exposed by Ritchie and Crouch (2003). Concordance
and discordance matrixes are presented in Tables 4 and 5 respective-
ly. Calculations were performed with LINAM software (Logiciel
Interactif d'Analyse Multicritre
2
).
The second step of ELECTRE I is the derivation of a recommendation
based on the outranking relations. It consists of exploiting them in
order to identify a small as possible subset of actions, from which the
best compromise action(s) could be selected. Given a binary relation
on set A, it is extremely helpful to build a graph. An action h outranks
an alternative k if and only if there is an arrow between h and k, and
no reversal arrow. If there is no arrow between two alternatives, it
means that they are incomparable. If two reversal arrows exist, there
is indifference between both. O'ahu is categorized in the rst rank
because three arcs are derived from the node a
4
. It means that a
4
is
preferred to a
1
, a
2
and a
3
. Furthermore, Maui is categorized in the
second rank. a
3
is indeed preferred to a
1
and a
2
. At the end, a
1
and a
2
are not incomparable and Kona is preferred to Kaua'i which is then
the last island. The construction of the graph and nal results are
respectively exposed in Tables 6 and 7.
The Weighted-Sum Method (WSM) is the most popular MCDA
method (Ishizaka et al., 2013; Mela, Tiainen, & Heinisuo, 2012)
mainly because of its simplicity (alternatives are ranked by evaluating
the sum of their weighted performances) and quickness to form
a comprehensive judgement on performance of alternatives. It is
dened by:
r
i

X
m
j1
r
ij
w
j
: 4
Table 8 presents results of WSM and Fig. 4 compares results
obtained with ELECTRE I and WSM. WSMis frequently used as a bench-
mark for the evaluation of MCDA methods (Mela et al., 2012). ELECTRE
I suggests a radically different recommendation than WSM: O'ahu is
seen as the best alternative for ELECTRE I and the worse one for
WSM. This case study demonstrates that ELECTRE I and Weighted
Sum do not produce similar results. For compensatory methods, a
disadvantage on some criteria can be offset by a sufciently large
advantage on another criterion (Rowley et al., 2012). This is a quite
restrictive assumption considering tourism destination competitive-
ness. For Bornhorst, Ritchie, and Sheehan (2010), the role of DMOs is
three in number: work toward enhancing the well-being of destination
residents; do everything necessary to ensure that visitors are offered
satisfactory experiences; and ensure the provision of effective destina-
tion management and stewardship. Accordingly, this note sheds light
to this last role i.e. resources deployment effectiveness.
4. Conclusion
This research note shows how the Multi-Criteria Decision Analysis
outranking approach ELECTRE I can be used to analyse tourismdestina-
tion competitiveness. At the methodological level, it represents the rst
application of ELECTRE I to this eld. Based on the set of Ritchie and
Crouch's (2003) criteria and their relative importance (weights
Crouch, 2011), ELECTRE I allows a group of destinations to be ranked
after making all the pairwise comparisons between them. In the
case study of this paper, destinations are the four main Hawaiianislands
of Kaua'i, Kona, Maui and O'ahu. Performance of each island on
each criterion was given by the data from the 2011 Hawaiian
Visitor Satisfaction & Activity Report. By doing so, this note assigns
performances to destinations by taking into account visitor's perspec-
tive and goes beyond the main limit of MCDA methods, that is subjec-
tive input from the decision-maker regarding performances of
alternatives and weights of criteria. From its empirical case study, this
paper shows that ELECTRE I and Weighted-Sum Method results differ
and that competitive advantages (effective resource deployment via:
Destination management; Destination policy, planning and develop-
ment; and Qualifying and amplifying determinants) are the foundation
of tourism destination competitiveness.
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Island Incomparable island Submissive island Ranking
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) 1
Table 8
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0
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R
a
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L. Botti: Professor at University of Perpignan Via Domitia
(UPVD) and researcher at the Centre d'Analyse de l'Efcience
et de laPerformanceenEconomie et Management (CAEPEM:
www.caepem-upvd.fr.nf). He is a specialist of destination
management and performance analysis of tourism decision
making units (DMOs, hotels, etc.).
N. Peypoch: Professor at University of Perpignan Via
Domitia (UPVD) and researcher at the Centre d'Analyse
de l'Efcience et de la Performance en Economie et
Management (CAEPEM: www.caepem-upvd.fr.nf). He
is a specialist of quantitative methods applied to tourism
planning, economics and management.
113 L. Botti, N. Peypoch / Tourism Management Perspectives 6 (2013) 108113