Please see the link below for a Sample Hotel Feasibility Study
RK Consulting Services, Inc. can prepare in-depth studies for all types of hospitality developments or hotel purchases, with particular expertise in hotels, resorts, condo hotels and boutique hotels. Hotel Feasibility Studies have gained increased importance due to the highly capital intensive nature of the hospitality projects as well as associated risks and rewards. It is an analytical tool that includes recommendations and limitations, which are utilized to assist the decision-makers when determining if the business concept is viable. The purpose of the Hotel Feasibility Study is to reduce the developer’s risk.
You are in a situation where you need an independent Feasibility Study for an hotel project that will examine the viability, operation, scale, brand, suitability of the site for development and detailed performance projections. Our Hotel Feasibility Studies are a detailed look at the market, the position of the hotel, a detailed projection of its operation and performance to ten year operation projections, the scale/positioning of the product and the economic business case to justify the investment. Our studies have been developed for multiple audiences, they are used to prove the sustainable viability of a business, for funding purposes, either senior debt, funds or individuals. Our studies are accepted by all the major funders and lenders operating in the hotel market today, used to secure/negotiate with an operator for the hotel if you decide to not to manage it yourself and for valuation purposes.
Market analysis the first part and economic feasibility is the second part of a complete report that is necessary prior to seeking equity partners or requesting a loan to buy or build a hotel. Typically, the hotel developer has already selected a market, a neighborhood and a site where he wants to build a hotel. If not, we will back up and assist the developer in evaluating alternative markets and sites. Whatever the starting point, we describe the nature of the assignment at the beginning of the report, so the client’s objectives will be achieved. We have analyzed markets from major metro areas to small cities and towns in almost every state and a few foreign countries. Whether it is a 60-room limited service hotel or a 500-room full service destination resort, we approach every market with the same set of questions, checklists and tools. We review the general market characteristics and trends and determine how these factors will impact the project.
After analysis of the general market, competitive supply and demand generators are established; we will provide a Supply & Demand Trends Analysis for market and competitive set. The proposed hotel will be positioned among the competition in terms of type, size, customer mix, occupancy, room rates and revenues. From here, we make recommendations to the developer regarding product design, facility configuration, ownership issues, management issues and possible franchise affiliations. All this is necessary to understand the market situation and determine how the proposed hotel will perform.
Our Feasibility Study will include the following
- Inspecting the site location and its surrounding areas.
- Visiting each hotel that might be in competition with your hotel development.
- Economic and Demographic Indicators of the local area
- Choosing the most competitive hotel set from Smith Travel Research.
- Analyzing data provided by Smith Travel Research.
- Projected ADR, Occupancy, REVPAR vs. Comp Set
- Investigating brand possibilities and offering suggestions.
- Suggesting optimal room count, amenities, retail, food & beverage, and banquet space.
- Determining how the repositioned or proposed hotel would fit within the existing hotel supply in its market.
- Identifying potential demand generators.
- Reporting on any proposed hotel additions in the market.
- Financial Projections with Cash Flow Usage and 10 Year Operating Performance
- Leveraged Internal Rate Return (IRR) Analysis
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