LAUSR

Abstract The purpose of this study is to develop and test a set of hypotheses concerned with exploring for precursors to the degree of emphasis hotel property General Managers attach to a financial versus strategic orientation in capital budgeting. Results are based on 200 survey responses from the General Managers of Australian and New Zealand hotels. The findings indicate that capital budgeting is more financially orientated than strategically oriented in hotel properties that adopt a management contract and also where the owner gets more involved in the capital budgeting process. No support is found for the hypothesised role of ego-trip hotel ownership, the age of a hotel property, a General Manager's number of years of experience, or public versus private hotel ownership. As an over-reliance on financial capital budgeting information can bias decision-makers against longer-term investment projects, it is conjectured that hotel capital budgeting may be somewhat sub-optimal in those hotels that adopt a management contract and which have a greater level of hotel owner involvement in the capital budgeting process.