Objectives of Study
The basic objectives of the study are to:
1. Evaluate the market potential for the proposed hotel based on an
analysis of the market support for a hotel facility on the subject site.
2. Comment on the appropriate numbers types, and sizes of guest rooms and
other amenities which would best serve the needs of the market.
3. Project levels of market penetration, occupancy, and average room rate
for the proposed hotel for the first ten years of operations.
4. Prepare detailed projections of cash flow from operations before fixed
charges for the hotel for the first ten years of operations.
5. Provide a written report containing the conclusions of the Feasibility
Study and present financial projections for the proposed hotel.
Scope of Study
The feasibility study includes a variety of work steps which enable us to
evaluate historic trends and project the future competitive supply of and
demand for lodging accommodations in the area. The scope of the work
includes, but is not necessarily limited to, the following:
1. An analysis and economic evaluation of the market area based on
interviews with area businessmen and government officials, compilation of
pertinent market data, and a review of those economic indices which would
be most relevant to the success of the proposed project.
2. An inspection of the site and surrounding area to determine their
suitability for the proposed hotel, taking into consideration such factors
as accessibility, visibility, and proximity to demand generators.
3. An inspection and analysis of the hotels in market area that would
provide the primary competition to the proposed hotel. Our census of the
competitive facilities included both existing hotels as well as those
under construction, planned, or rumored.
4. A determination of the current overall market demand and rooms in the
subject area and the share of market demand that is generated by tourists,
commercial travelers, and group meetings/ convention delegates.
5. A projection of growth rates for the various market segments based on
the factors that should impact the future demand for hotel rooms.
6. An evaluation of the projected hotel supply and demand relationship in
the market area to reach conclusions regarding the market support for the
7. Comment on the proposed facilities in terms of number, mix, and type of
guest rooms and recreational amenities.
8. Comment on the proposed facilities in terms of style and size.
9. Projections of occupancy and average room rate for the proposed hotel,
including projected market mix of guests.
10. Projections of cash flow from operations before fixed charges for the
first ten years of operations.
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