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Estimating the Impact of Entertainment on the Gaming Volume of Las Vegas Hotel Casinos

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Estimating the Impact of Entertainment on the Gaming Volume of Las Vegas Hotel Casinos UNLV Retrospective Theses & Dissertations 1-1-2006 Estimating the impact of entertainment on the gaming volume of Las Vegas hotel casinos Eunju Suh University of Nevada, Las Vegas Follow this and additional works at: https://digitalscholarship.unlv.edu/rtds Repository Citation Suh, Eunju, "Estimating the impact of entertainment on the gaming volume of Las Vegas hotel casinos" (2006). UNLV Retrospective Theses & Dissertations. 2669. http://dx.doi.org/10.25669/265c-kj3j This Dissertation is protected by copyright and/or related rights. It has been brought to you by Digital Scholarship@UNLV with permission from the rights-holder(s). You are free to use this Dissertation in any way that is permitted by the copyright and related rights legislation that applies to your use. For other uses you need to obtain permission from the rights-holder(s) directly, unless additional rights are indicated by a Creative Commons license in the record and/or on the work itself. This Dissertation has been accepted for inclusion in UNLV Retrospective Theses & Dissertations by an authorized administrator of Digital Scholarship@UNLV. For more information, please contact [email protected]. ESTIMATING THE IMPACT OF ENTERTAINMENT ON THE GAMING VOLUME OF LAS VEGAS HOTEL CASINOS by Eunju Suh Bachelor of Science Ewha Women’s University 1999 Master of Hotel Administration University of Nevada, Las Vegas 20M A dissertation submitted in partial fulfillment of the requirements for the Doctor of Philosophy Degree in Hotel Administration William F. Harrah College of Hotel Administration Graduate College University of Nevada, Las Vegas May 2006 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UMI Number: 3226631 Copyright 2006 by Suh, Eunju All rights reserved. INFORMATION TO USERS The quality of this reproduction is dependent upon the quality of the copy submitted. Broken or indistinct print, colored or poor quality illustrations and photographs, print bleed-through, substandard margins, and improper alignment can adversely affect reproduction. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if unauthorized copyright material had to be removed, a note will indicate the deletion. UMI UMI Microform 3226631 Copyright 2006 by ProQuest Information and Learning Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. ProQuest Information and Learning Company 300 North Zeeb Road P.O. Box 1346 Ann Arbor, Ml 48106-1346 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Copyright by Eunju Suh 2006 All Rights Reserved Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. T Î \ T Dissertation Approval The Graduate College University of Nevada, Las Vegas This Dissertation prepared by Eunju Suh Entitled Estimating the Impact of Entertainment on Gaming Volume of Las Vegas Hotel Casinos was approved in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Hotel Administration By the undersigned on April 11, 2006 Anthony F. Lucas, Examination Committee Chair Bo Bernhard, Examination Committee Member Kathy Nelson, Examination Committee Member Ashock Singh, Graduate Faculty Representative QCj Z ^ Dean of the Graduate College Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ABSTRACT Estimating the Impact of Entertainment on the Gaming Volume of Las Vegas Hotel Casinos by Eunju Suh Dr. Anthony F. Lucas, Examination Committee Chair Associate Professor of Hotel Administration University of Nevada, Las Vegas This study addressed the indirect effect of entertainment on gaming volume (i.e., coin-in). Specifically, this study attempted (1) to gain an understanding of the relationship between show patronage and gaming volume; and (2) to estimate the magnitude of incremental revenue for each show attendee. Conceptual models to examine the indirect effect of daily show headcounts on gaming volume were proposed, including other variables previously found or theorized to influence gaming volume. Secondary data (i.e., show headcounts, daily coin-in and daily cash drop) were collected from two different Las Vegas Strip properties. This study employed multiple regression models with the appropriate autoregressive (AR) and moving average (MA) errors, to adjust or correct for autocorrelation present in time series data. .Hypotheses associated with the show headcount variables were tested at a .10 alpha level, given the exploratory nature of this research. In regression models associated with the first subject property, the show headcount variable had a significant effect on both coin-in and cash drop. This finding supports 111 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. conventional wisdom that shows drive gaming volume. Despite the positive linear correlation between show headcounts and gaming volumes, the economic significance of the incremental win per show attendee was not substantial. For the second subject property, the impact of show headcounts on coin-in was not statistically significant, whereas show headcounts had a significant influence on cash drop. In general, the results of this study suggest that show goers are not necessarily avid gamblers. The findings of this study point to the importance of careful selection, investment and management of entertainment options. If the purpose of a show is to complement casino gaming, it should produce a strong spillover effect on gaming volume. If not, the show should be profitable on its own. It also better position itself as a necessary component of a full-service resort. With the findings of the current work, casino operators could further evaluate whether show attendees produce sufficient returns on investment. Additionally, this study adds valuable empirical results to the limited literature base associated with the impact of entertainment on gaming volume. Finally, it provides a platform for future research in this area. IV Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. TABLE OF CONTENTS ABSTRACT..................................................................................................................................iii LIST OF TABLES.......................................................................:.............................................vii ACKNOWLEDGEMENT....................................................................................................... viii CHAPTER 1 INTRODUCTION..............................................................................................1 Theoretical Framework ..........................................................................................................3 Problem Statement ................................................................................................................. 4 Justification ............................................................................................................................. 4 Research Propositions ............................................................................................................ 8 Definitions ................................................................................................................................8 Delimitations ........................................................................................................................... 9 CHAPTER 2 LITERATURE REVIEW ................................................................................13 Introduction ............................................................................................................................13 The Role of Entertainment ...................................................... 13 The Relationship between Entertainment and Consumer Behavior ............................. 26 Loss-leader Promotion .........................................................................................................34 Real Estate Literature...........................................................................................................42 Types of Show Contracts .................................................................................................... 46 Related Industry Trends...................................................................................................... 48 Models and Research Propositions .................................................................................... 55 CHAPTER 3 METHODOLOGY.......................................................................................... 60 Introduction ........................................................................................................................... 60 Data Sources ......................................................................................................................... 60 Reliability ...............................................................................................................................62 Validity..................................................................................................................................63 Multiple Regression Analysis .............................................................................................66
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