Feasibility Study is primarily conducted to provide honest and reliable information to the client to help them decide whether to develop their proposed Hotel / Resort project. It allows a venture to address how it will operate. It also identifies potential hurdles that may hinder the operations and determine the amount of funding to get the business up and running.
Feasibility Study is generally done to identify the Strengths, Weakness, Opportunities & Threats to a particular proposed development linked to its Cost of Development, Product Positioning, Revenue Analysis, DSRC & IRR Ratios, eventually determining the ROI.
Feasibility Study is primarily conducted to provide honest and reliable information to the client to help them decide whether to develop their proposed Hotel / Resort project. It allows a venture to address how it will operate. It also identifies potential hurdles that may hinder the operations and determine the amount of funding to get the business up and running. Feasibility Studies assess the financial viability & suitability of a location & market for a Hotel / Resort project.
Feasibility Study should be conducted before starting a Hotel / Resort Project. It should be clubbed along with a Concept Development of the proposed project which co relates to the financial assessment of the Project. A feasible project is one which has greater economic value than its cost.
At the backdrop of such a conducive business atmosphere Feasibility Study Reports on Hotel / Resort Development attempts to examine such critical factors which will provide vital inputs in general to the potential investors and estimation of commercial viability of such an investment. It presents the market analysis of the hospitality industry in terms of structure, segmentation, market size, major share etc.
Feasibility Study analyses the steps involved in setting up a Hotel / Resort describing the technical aspects in terms of locational details and land requirement. It assesses the manpower planning and financial estimates involved in setting up a Hotel / Resort. Feasibility Study brings an insight into the procedure for setting up a hospitality venture, type of machinery & floors space required, requirement of regulatory permissions & clearances. Analysis viz. SWOT of the industry. An Investor before taking over / entering a new venture wants to understand the future prospects and fair valuation of a property. Feasibility Study is equally important for those who are buying / selling a Hotel / Resort and also too for hospitality establishments looking to start a Green Field Hotel / Resort project.
Following are some key factors which should be kept in mind while getting a Feasibility Study done.
- Concept Development along with Proposed Hotel / Resort Facilities
- Geographic & Demographic Analysis
- Tourism Data Statistics Analysis
- Competition Analysis
- Market Fare Share Analysis
- Market Segmentation
- SWOT Analysis
- Demand Generators
- Brand Positioning
- Capex Cost Parameters
- Manpower Analysis
- Operating Revenue & Expense Analysis
- DSCR (Debt Service Coverage Ratio) & IRR (Internal Rate of Return) Ratios