Hotel feasibility studies

Hotel Feasibility Analysis
The goal of this lesson is to provide the learner
with an understanding of the process of
performing a hotel feasibility study, as well as
the importance of such a task.

Srikanth Beldona, Ph.D.


Lesson Objectives
□ Define what is a Hotel Feasibility
Study
□ Describe the two phases of a Hotel
Feasibility Study
□ Describe the three major
components of a Hotel Feasibility
Study
□ Demonstrate knowledge of
important financial determinants


What is a Feasibility Study?
□Investigates the need for the
proposed hotel must be investigated,
estimated, documented and
supported, so that the client can be
assured that the proposal is justified.


Feasibility Studies
□ Hotel feasibility entails three major

components
(1)Preparation of a market feasibility
study for the project
(2)Estimation of costs for all elements
of the project and
(3)Determination of sources of
financing.


Two Phases of a Hotel Feasibility
Study
□Market Feasibility
□Economic Feasibility


Site Selection
□Proximity
□Business and Trade Centers, Highways,
Traffic Levels, Key Attractions, Shopping
Centers, Population Backup

□Site Specific
□Size, Zoning Laws, height restrictions
and parking requirements, Visibility,
Accessibility


Competitive Area Property
Spread

Traffic Count of Competitive
Market Area


Why Location & Size are
important


What today’s travelers want


The Market
□Statistics on visitor arrivals
□Snapshot of local economy
□Expected changes

□Average length of stay of visitors in
location


Market Breakdown Template


Construction Trends Template


Area Lodging Facilities
Property Analysis

Area Lodging Facilities
Room Rate Analysis


Rate Analysis :
Single and Double Occupancy


Area Lodging Facilities
Amenities Analysis-I


Area Lodging Facilities
Amenities Analysis-II


Area Lodging Facilities
Overall Property Evaluation


Segment Breakdown


Area Lodging Facilities
Property Support Analysis


Area Lodging Facilities
Seasonal Occupancy Analysis

Estimated Area Occupancy
Template


Understanding Demand


Projected Demand
Breakdown