Youn and Gu (2007) tested the prediction of business failure in the Korean lodging industry
and concluded that Korean lodging firms ―should lower their reliance on debt financing and
increase the efficiency in using existing assets to generate sales revenue.‖
Youn and Gu (2010) found the Artificial Neural Networks ( ANN) model advantageous
over the logistic regression model in prediction accuracy. They concluded that interest
coverage is the most important signal of business failure for the Korean hotel industry,
proposing Korean lodging firms should increase the interest coverage. The ability to service
debts and productivity of profits is regarded as a survival indicator of Korean hotel firms.
Soo Y. Kim (2011) tested the application of multivariate discriminant analysis, logistic,
artificial neural networks (ANNs), and support vector machine (SVM) models in hotel
bankruptcy prediction, and considered ANN as best early warning technique that performs
accurately with small relative error costs for hotel bankruptcy prediction.