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Strategic Planning for Hotel -Casino Projects UNLV Retrospective Theses & Dissertations 1-1-1999 Strategic planning for hotel -casino projects Franklin Neil Baker University of Nevada, Las Vegas Follow this and additional works at: https://digitalscholarship.unlv.edu/rtds Repository Citation Baker, Franklin Neil, "Strategic planning for hotel -casino projects" (1999). UNLV Retrospective Theses & Dissertations. 3074. http://dx.doi.org/10.25669/8skw-a736 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]. INFORMATION TO USERS This manuscript has been reproduced from the microfilm master. UMI films the text directly from the original or copy submitted. Thus, some thesis and dissertation copies are in typewriter face, while others may be from any type of computer printer. 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 bleedthrough, substandard margins, and improper alignment can adversely affect reproduction. In the unlikely event that the author did not send UMI 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. 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STRATEGIC PLANNING FOR HOTEL-CASING PROJECTS by Franklin Neil Baker Bachelor of Business Administration (Magna Cum Laude) University of Memphis 1973 Master of Science University of Memphis 1974 A dissertation submitted in partial fulfillment of the requirements for the Doctor of Philosophy Degree The William F. Harrah College of Hotel Administration Graduate College University of Nevada, Las Vegas August 1999 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UMI Number: 9946521 UMI Microform 9946521 Copyright 1999, by UMI Company. Ail rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. UMI 300 North Zeeb Road Ann Arbor, MI 48103 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Copyright by Franklin Neil Baker 1999 AU Rights Reserved Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Dissertation Approval UNIV The Graduate College U N iy University of Nevada, Las Vegas Ju ly 15 . 19 99 The Dissertation prepared by Franklin Neil Baker__ Entitled Srrat-egir Planning for Hnfal-Casino Prnjart-s is approved in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Hotel Administration ________ Examination Committee Chair Dean of the Graduate College Examination Committee Member Examination Committee Member Graduate College Faculty Representative 11 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ABSTRACT Strategic Planning for Hotel-Casino Projects by Franklin Neil Baker Dr. Bernard Fried, Examination Committee Chair Associate Professor of Tourism & Convention Administration University of Nevada, Las Vegas Hotel-casinos have exhibited financial trouble and failure rates which exceed 30%. Even so, billions of dollars have been earmarked for continual development within the industry. The purpose of this study was to examine classical theories of strategic decision­ making when planning for new or expanded hotel-casinos and then determine if these theories work for the industry or if the industry is so unique that special measures must become part of the strategic-planning process. Three factors related to strategic planning were selected for study: economic indicators, the product/service life cycle, the Altman Z Factor for bankruptcy prediction. Twelve Chief Financial Officers representing more than half of the hotel-casino properties were surveyed concerning their approaches to building or expanding properties to determine if and how these three factors were currently being used. Three research questions based on these factors were then examined and statistically tested for their value iii Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. in the planning process. This study found that there was no correlation between the economic indicator of GDP and gross gaming revenues on either national or jurisdictional levels, indicating that GDP has little value in the strategic planning process of the hotel-casino industry. In fact, this study seemed to confirm earlier work which found gaming revenue to resist economic fluctuations. The Altman Z Factor, as it is currently used, offered hope in becoming useful to distinguish failure of hotel-casinos, but it appeared that further work with the Altman Z Factor would be needed. The product/service life cycle did prove useful, however, since failure rates of hotel-casinos were significantly greater when projects were opened in the maturity or decline stage of the legalized gaming jurisdiction’s product/service life cycle. In summary, there are certain strategic decision-making tools that may offer assistance to the hotel-casino strategic planners. IV Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. TABLE OF CONTENTS ABSTRACT.............................................................................................................................. iü LIST OF TABLES................................................................................................................. viü LIST OF FIGURES...................................................................................................................x ACKNOWLEDGMENTS........................................................................................................ xi CHAPTER 1 - THE PROBLEM AND ITS PURPOSE...................................................... 1 Problem Statement.......................................................................................................8 Purpose of the Study ................................................................................................... 8 Research Questions..................................................................................................... 9 Significance of the Study .............................................................................................9 Limitations of the Study ...........................................................................................10 Organization of the Dissertation ................................................................................... 10 CHAPTER 2 -REVIEW OF THEORY AND LITERATURE.............................................. 11 Strategic Decision-making: Theory, Practice and Research ........................................12 Theory and Practice of Stratège Decision-making ..........................................13 Environmental Analysis....................................................................... 14 Strategy Formulation...........................................................................15 Strategy Evaluation............................................................................. 17 Literature on Strategic Decision-Making Research ........................................19 The Importance of Strategic Decision-Making ..............................................20 Processes o f Strategic Decision-Making ......................................................... 20 Strategic Decision-Making in Specific Industries .............................. 23 Strategic Decision-Making in Stable versus Dynamic Industries...................................................................................25 Strategic Decision-Making for Capital Investments ..........................27 Structure of the Rational Decision-Making Process........................28 Summary of the Structure of Strategic Decision-Making.................45 Hotel-Casino Studies....................................................................................................46
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