Hotel Feasibility Studies determine the financial viability and sustainability of a particular hotel project.
BHA produces hotel feasibility studies with financial projections for proposed hotel developments at a proposed site.
Our feasibility study is an internationally acknowledged investment quality product and regarded by commercial financial institutions, investors, developers, and hotel operators.
Hotel Feasibility studies by BHA provide a model decision basis for the hotel development, financing,and operation (hotels, resorts, condo hotels) as a standalone project or a component within a mixed-use development.
Purpose of the Study
The feasibility study includes a variety of work steps 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:
- Analysis and economic evaluation of the market area based on interviews with area hotel management, business 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
- Inspection of the site and surrounding area to determine the suitability for the proposed hotel, taking into consideration such factors as quality of neighborhood, accessibility, visibility, and proximity to demand generators
- Investigate 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.
- 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.
- A projection of growth rates for the various market segments based on the factors that should impact the future demand for hotel rooms.
- An evaluation of the projected hotel supply and demand relationship in the market area to reach conclusions regarding the market support for the proposed hotel.
- Comment on the proposed facilities in terms of style, size, number, mix, and type of guest rooms and recreational amenities.
- Projections of occupancy, average room rate, and additional revenues for the proposed hotel, including projected market mix of guests.
- Projections of cash flow from operations before fixed charges for the first ten years of operations.
- Feasibility Test for the cost of the hotel project against the likely revenues and profits to support the business model.