Award Date

12-1-2012

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Hotel Administration

First Committee Member

Sarah Tanford

Second Committee Member

Bo Bernhard

Third Committee Member

Anthony Lucas

Fourth Committee Member

Alan Schlottmann

Number of Pages

136

Abstract

Previous studies on this topic show that all non-gaming amenities at a casino-resort property generate revenue in two ways. First, an amenity directly contributes to companies' overall profits when consumers spend on a particular amenity more than it costs the company to provide that amenity (Roehl, 2006). Second, these amenities can make an indirect contribution defined as the profit impact of an amenity on another profit center at the property (Dandurand & Ralenkotter, 1985); however, this contribution does not show directly on the amenity's financial statements (Roehl, 1996).

The purpose of this paper is to estimate the indirect gaming (both slot and table) and non-gaming contribution of various non-gaming amenities at a casino-resort property ("the subject property"). Gaming research that studied the gaming - non-gaming relationship provided the research context for this paper. The current study incorporated the variables identified in the previous research, included additional variables as recommended by previous studies on the topic, and advanced seven theoretical models to examine empirically the indirect effect of the selected non-gaming amenities on gaming (slot and table) volume and other non-gaming amenities.

The results of the study show that comped food and beverage covers contribute the most to the gaming revenue at the subject property over the study period, with the majority of this indirect contribution being to the slot revenue. Retail outlet sales contribute significantly to the slot revenue and to the cash table revenue at the subject property. Other retail-related sales (e.g., spa, salon, pool, arcade, etc.) also make a contribution to the property's slot revenue. Additionally, food and beverage covers and retail outlet sales are significantly and positively associated with the subject property's hotel occupancy. Hotel occupancy, however, did not produce a statistically significant effect on entertainment headcount at the subject property over the study period.

It is important to note that whether a particular independent variable is significantly related to the dependent variable in a regression model depends on what other independent variables are included in the model. The study incorporates variables that were never previously considered for this type of analyses (e.g., daily retail outlet sales, other retail-related sales, golf course sales). Most importantly, the study represents the first attempt to incorporate all the selected non-gaming amenities in one model. Another practical implication of this study is that by using actual operating data and profit margin statistics, the study translates the estimated gaming business volume contribution to the gaming revenue contribution. The study findings show the potential of various non-gaming amenities to attract gamers and suggest that non-gaming amenities at a casino-resort can be significant contributors to gaming (slot and table) revenue and to the performance of other non-gaming amenities.

Keywords

Casinos; Casinos – Food service; Gambling industry; Indirect gaming contribution; Integrated resort; Non-gaming amenities; Non-gaming revenue; Profit; Resorts; Slot business volume; Slot machines; Table business volume

Disciplines

Business | Gaming and Casino Operations Management | Hospitality Administration and Management

Language

English


Share

COinS