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Hoteli Bernardin is a resort complex on a 24-acre penninsula jutting out into the Adriatic Sea. Located half-way between the medieval town of Piran and the modern seaside resort of Portoroz, it is on the gounds of a 15th century monastery. The complex has over 750 rooms, 244 of which are located in the luxury hotel, the Grand Enoma, which is adjacent to a state-of-the-art convention centre. When Slovenia was part of Yugoslavia, the hotel accumulated considerable debt. More recently when war broke out in 1991, the foreign tourist business dried up literally overnight. They survived the next five traumatic years and now must decide how they can get out of this ''survival mode'' and strategically position themselves for a bright future. The political environment of Slovenia has stabilized but there remain fractions in dispute as to the best direction of the country. While privatisation of enterprises has progressed smoother than some other eastern block countries, there are still some vestiges of closed-economy thinking. The lack of stability of neighboring Croatia is worrisome. Outbreaks of warfare in the remainder of states in former Yugoslavia make investors and tourists wary. This backdrop sets a stage for strategic planning that is both firm and shaky at the same time. This case was sponsored by the Indiana University CIBER Case Collection.