The market and financial feasibility study is an essential first step in the process, after securing the site, and we specialist in the preparation of such studies.
There are five main reasons for carrying out a feasibility study of a hotel project: for the benefit of the promoter, to ensure full understanding of the risks and rewards of the project; to determine the most appropriate facility provision for a given site and market; to brief the architect as to what the market requires in terms of facilities; to attract the attention of an operator and to form the basis for contract registration; and to support submissions to debt and equity providers.
In general terms, the output of a feasibility study is information, conclusions and recommendations on:
- the current and projected future economic, political and social environment in which the proposed hotel will operate;
- the location for the proposed development, and the strengths and weaknesses of the site;
- the current and projected future market environment in the project location, with a detailed supply and demand analysis;
- product concept and market positioning, the number and type of guest rooms and other facilities;
- operating factors of relevance, including aspects of management and marketing of the property;
- projections of revenue, cost, profit and annual cash flow, and a calculation of the resultant return on investment.