| 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 in the planning process.; This study found that there was no correlation between the economic indicator of GDP and gross gaining 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 gaining 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. |
