Due to the vigorous development of the tourism industry in Taiwan, the number of international tourist hotels has been on an upward trend. To survive in an increasingly competitive environment, it is important to seek out improvement in performance. This study measures the performance of fifty-four international tourist hotels in Taiwan from 2008 to 2011 by using the metafrontier Malmquist productivity index. This index satisfies the requirement of circularity, is immune to linear programming infeasibility, overcomes the problem of base period dependency, and considers the heterogeneity among hotels. To investigate sources of productivity change, this index can be further decomposed into within-group efficiency change, within-group technical change, and technical leadership change. The empirical results indicate that the use of different technologies by hotels affects the productivity change. Both within-group efficiency and technical changes are the main factors of productivity change. Chain hotels are technology leaders, and independent hotels are followers. By identifying each competitor’s productivity change, operators can refer to appropriate best-practice hotels to improve their operations.