Consulting

Market & Financial Feasibilities

 

Whether you are contemplating an acquisition or development of a hospitality facility, it is vital that you commission a detailed market and financial feasibility analysis for the envisaged venture, as this will enable you to make an informed decision on the potential limitations and business parameters and identify and mitigate future risks.

For the purposes of the analyses we would conduct two studies, which are interlinked; a Market Demand Analysis and a FinancialAnalysis. These modules form the basic information required by an INTEGRATED FEASIBILITY ANALYSIS, which is aimed at incorporating a construction feasibility, to determine the overall viability of a project.



Market Demand Analysis
The market demand analysis enables us to project the size and source of the market, researches the current (and future) competitors and their present performances and provides for vital data that will be used for the Financial Analysis, the creation of potential USP’s (Unique Selling Points), development or third party funding and the compilation for a customer profile needed for design briefing purposes.

Our research will further enable us to formulate recommendations relating to the most appropriate size, standard and configuration for the proposed hotel, as well as estimate the likely primary variables for the project under study; these include average occupancy rate, average room rate, patronage and average spends.




Financial Analysis
The above forms the foundation for this second analysis, which are the indicative financial projections for the opportunity under study. The financial analysis initially takes on the form of indicative financial projections for the first ten years of operation and quantifies the accommodation, food, beverage and other revenues which follow upon our assumptions about occupancies, room rates, patronage, average spends, and inflation. 

The indicative projections also forecasts operating profits of major revenue departments, overheads and the gross operating profit (GOP) for the development. 

The financial analysis includes indicative ten-year income statements, balance sheets, taxation schedules, and ten-year cash-flow projections extrapolated from the base of the five-year operating projections.

These ten-year indicative projections take into account assumptions made in conjunction with you regarding capital expenditure. The financial assessment includes conclusions relating to the feasibility of the development.